Saving for college may seem like a daunting task for parents, but they should be comforted by the fact that there are many sources of financial aid outside their own pocketbooks, savings accounts, and 529 plans. There are many sources of grant money and scholarships (see sidebar on page 54 for a review of a book providing plenty of data on those sources), for instance, and the number of such scholarships is growing. In addition to institutions, many individuals are using scholarship vehicles as their preferred charity.
If your client wants to establish a scholarship, there are several options. Often alumni will work with a college’s development office to establish a scholarship in the alum’s name. Foundations also often provide scholarships. In the fourth quarter of this year, Foundation Source (www.foundationsource.com), the Norwalk, Connecticut-based company that makes it easy to build private foundations and then run them, will introduce a new module to establish and maintain educational awards and scholarships. FoundationSource CEO Douglas Mellinger says the turnkey system will take care of gaining prior approval from the IRS, necessary with scholarships, making the actual awards, and taking care of the stringent monitoring and reporting requirements necessary with scholarships.