Fundraising for Scholarship Funds and After-School Programs

This guide is part of fundraising for school projects. Most school fundraising buys things everyone shares. Scholarships and fee assistance are different: the money ends up helping particular students. That is their appeal to donors, and it is also why they need rules that other projects don't. This page covers two related projects: scholarship funds, usually for graduating seniors, and help with the cost of after-school and before-school programs.

Who should hold the fund

A scholarship fund should never sit in a volunteer's personal account or in a class account with no rules. Choose a home that can receive deductible gifts, keep records for years, and apply the same rules every year.

Gifts are deductible only if the holder is a qualified organization, such as a school district or a parent group recognized under 501(c)(3). Ask your treasurer to confirm the holder's status in writing before any appeal promises a receipt.

Choosing recipients fairly

The IRS has detailed rules for scholarships paid by private foundations, and they are the best published model for any scholarship program. Its page on individual grants under section 4945(g) says a private foundation's grants to individuals must be made under a procedure approved in advance, and that the procedure must include an objective and nondiscriminatory selection process. The group of possible recipients must be large enough to form a charitable class, the selection criteria should relate to the purpose of the grant, and the selection committee should not be in a position to benefit privately from choosing one candidate over another.

A PTO, booster club or school foundation recognized as a public charity is usually not a private foundation, and the advance-approval rule on that IRS page applies to grants made by private foundations. But the same principles protect any program from favoritism and from questions about private benefit, so build them in from the start.

• Write criteria that fit the purpose. "A graduating senior who plans to study a skilled trade" or "a senior who has shown leadership in community service" are clear. Criteria that only one student could meet are not a scholarship; they are a gift to that student.
• Publish the criteria and the deadline to every eligible student, through the counselor's office, not by word of mouth.
• Keep conflicts out of the committee. A committee member whose child, relative or close friend applies steps aside. Include a counselor or teacher alongside parents or community members.
• Pay the institution where you can. Many programs send the award to the college, trade school or program in the student's name, which shows the money went to education.
• Keep the records: criteria, applications, scores, the decision and proof of payment.

Gifts for a named student

Families and neighbors often want to help one particular student pay for college or a program. That is generous, but it isn't a deductible gift to the school or the parent group. IRS Publication 526 says donors can't deduct contributions to specific individuals, and can't deduct contributions earmarked for relief of a particular individual or family, even when the money passes through a qualified organization. It also says tuition payments aren't deductible as charitable contributions.

The rule protects the organization too. A fund that passes donors' money to students the donors picked is acting as a go-between, not running a scholarship program. The same reasoning is why clubs and teams pool their money instead of keeping individual student accounts. If someone wants to help a specific student, they can give to that family directly, without a receipt from the school. If they want a receipt, they give to the pooled fund and the committee chooses.

Memorial scholarships

When a student, teacher or community member dies, a memorial scholarship is one of the most common ways a school community responds. Handle it with care and with rules agreed early, while everyone's intentions are clear.

1. Talk with the family first

   Ask what they would like the scholarship to honor: a love of music, a trade, service, a sport. That becomes the purpose and shapes the criteria.

2. Choose the holder

   For a one-time or few-year award, the PTA, booster club or district can hold it. For a permanent fund, a school foundation or community foundation is usually the better home.

3. Agree on the selection rules in writing

   The family can help shape the criteria and can be invited to present the award. Choosing the recipient should rest with an independent committee, using the process above.

4. Decide annual or endowed

   An annual award spends what is raised each year. An endowed fund invests the gifts and spends part of the earnings, so it lasts, but it needs a much larger sum.

5. Plan the fundraising

   A memorial event once a year keeps the name alive and refills the fund. See the ideas below.

Example A family wants a memorial scholarship of $1,000 a year. As an annual award, the community needs to raise $1,000 each year. As an endowed fund at a community foundation with an assumed 4% annual spending rate, it needs $25,000 invested ($25,000 × 0.04 = $1,000). Ask the foundation for its actual spending policy, minimum fund size and fees before setting the goal.

Scholarship fundraiser ideas

Scholarship funds raise best from people outside the current parent body: alumni, retired staff, local businesses and the friends of the person a memorial honors. These formats suit a scholarship in particular:

• An alumni appeal around reunions or homecoming, naming what last year's scholarship made possible (with the recipient's permission). Alumni give to the school they remember, and a scholarship is the clearest way to do that.
• Business-named awards. A business funds a named award each year, such as "the [Business] Award for a future tradesperson." Keep the recognition to a thank-you at the awards night and in the program, and let your committee choose the recipient; the sponsorship letter templates help with the ask.
• A memorial run or walk on the same weekend each year, open to the public, so the name stays in front of the community. The community fun run guide covers events open to everyone.
• An evening where past recipients speak or perform. A dinner or concert at which a recipient explains what the award made possible raises more than any letter.
• Service and civic clubs. Many run their own scholarships and sometimes fund or co-sponsor school ones. Ask whether they would rather fund your pooled award than run a separate application.

Golf outings, giving days and employer matching work here as they do for any project; the general mix is in combining fundraisers, grants and sponsors.

After-school programs and fee assistance

Before- and after-school care, enrichment clubs, tutoring and summer programs are often run by the district, a city recreation department or a community nonprofit, and many charge fees. A parent group usually can't and shouldn't run the program, but it can help in three ways.

1. A confidential fee-assistance fund

This is the most useful thing fundraising can do for an after-school program. The parent group raises money into a pooled fund; the program or a school counselor decides who receives help, using simple written criteria; and the program reduces those families' fees. The parent group never needs to know which families were helped. Keep it a pooled fund, not credits for particular children, for the same reasons as scholarships.

2. Equipment and enrichment

Program equipment, books, supplies or a visiting instructor for a club are one-time purchases with a clear price, so they suit a grant, a sponsor or a single fundraiser. Give the item to the program in writing, so it stays with the program if staff change.

3. Pointing the school toward larger funding

Some after-school programs are funded through the federal 21st Century Community Learning Centers program (Title IV, Part B of the Elementary and Secondary Education Act). Kentucky's Department of Education, for example, describes it as federal money awarded to state education agencies, which run statewide competitions for grants to school districts, community-based organizations and other public or private entities. The program supports academic enrichment during non-school hours, particularly for students at high-poverty and low-performing schools. Each state runs its own competition on its own cycle, and the applicant is a district, a community nonprofit or another eligible organization, often in partnership. A parent group can't usually apply on its own, but it can ask the principal whether the district or a local nonprofit has applied or holds a current grant, offer letters of support and volunteers for an application, and help families enroll if the program is funded. Your state education agency's website lists its competition and current grantees. At Title I schools, the guide to fundraising at Title I and low-income schools explains how federal money and fundraising fit together.

Sources

1. Publication 526 (2025): Charitable Contributions, Internal Revenue Service (accessed 2026-10-30)
2. IRC Section 4945(g) Individual Grants, Internal Revenue Service (accessed 2026-10-30)
3. Kentucky's 21st Century Community Learning Centers, Kentucky Department of Education (accessed 2026-10-30)