Establish a Scholarship - Options for Funding

By now, you have probably given some thought to the annual award amount you want to provide. Our students will benefit from any level; however, we recommend a minimum annual award equal to five percent of our average costs for tuition, room, board, and fees. Based on the average annual cost of tuition we recommend an annual award goal of at least $2,500. You can choose from four funding options:

An endowed scholarship makes awards solely from investment earnings with no invasion of principal. Consequently, an endowed scholarship fund is perpetual. Cedarville University invests endowed funds in a conservative manner under the direction of the Investment Committee of the Board of Trustees. A portion of the portfolio earns the current income used to fund the annual awards, and a portion earns capital gain for long term principal growth to preserve the fund and enhance future awards. An endowed scholarship fund should start with a minimum gift of $50,000.

For this type of endowment, the annual award increases in proportion to the annual average costs of education. The donor selects the percentage of annual tuition, room, board, and fees they wish to supply through their scholarship fund. We recommend a minimum of five percent. As costs increase, so does the annual award amount. Therefore, donors have great satisfaction knowing their scholarship fund provides a significant resource, relative to the rising costs of education, throughout the term of the scholarship.

Since annual awards are not limited by annual investment earnings, the fund principal may be used frequently to meet the annual award goal. Therefore, the fund will likely exhaust itself within a term of years. The actual scholarship term is dependent upon tuition costs and investment performance. We can offer projections based upon historical figures. We recommend initial funding of between $15,000 and $50,000.

With an annually funded scholarship, donors provide the funding for the scholarship award each year instead of making a large initial investment. Donors also have more flexibility in determining their annual award amounts. However, the scholarships discontinue once donors cease funding. We recommend annual gifts of at least $2,500.

Donors may gradually fund an endowed scholarship over several years and supplement the endowment earnings with annual gifts to complete the award until the endowment is funded to their satisfaction. We inform donors of the earnings level and the amount of the supplemental gift required for award each year. If the supplemental gift is not made, we will not award the fund earnings, but will return them to the principal and reinvest them in the scholarship account until we can give the minimum award. Donors may also initially fund the scholarship through annual gifts with plans to endow the scholarship at a later date as funds become available, such as with an inheritance or through estate plans.

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