I met with a regional foundation director for a local community college today to discuss other scholarship opportunities in our assessment area. We signed a gift agreement for a scholarship for low-income students earlier this year and she wanted to meet to discuss the possibility of setting up an endowment fund with the same income parameters as the previous scholarship.
I gathered from the Q&As that only the income used to distribute the scholarship from the endowment would be considered for CRA credit. For example, if the endowment was $10K at 5%, we would only get credit for $500 in a CRA qualified scholarship even though the endowment has 10K. Do I understand that correctly as far as any of you know?
If I do, I think it would make more sense, strictly for CRA credit, to do an annual scholarship rather than going through an endowment. I have never dealt with endowment funds before, so I am not very familiar with them, but I believe I’m on the right track here.
Could anyone speak from experience or expertise on this?