Run an Employee Scholarship You Can Document and Defend

A 30-minute session for corporate giving, HR and company foundation teams on the selection process and records behind a scholarship for employees' children.

A scholarship for employees' children is one of the most appreciated benefits a company can offer. When it's run through a company foundation, it's also a grant program with specific IRS rules.

Under Section 4945(g) of the tax code, a private foundation's scholarships need to be awarded on an objective, nondiscriminatory basis, under a procedure the IRS approved in advance. For employer-related programs, the IRS applies the guidelines in Revenue Procedure 76-47, including a selection committee independent of the company and the foundation, awards that aren't used to recruit or keep employees, and limits on how many eligible applicants can receive awards each year. Foundations are also expected to keep records of how each recipient was evaluated and chosen.

Many programs still run on an online form, a spreadsheet and a committee of colleagues who know the families.

This session is built around two of the five dimensions of Review Integrity, a framework for judging whether an application and review process is fair, consistent and defensible.

The first is Decision Traceability: if your tax advisor asked how each recipient was chosen, could you show the criteria, the scores and who did the scoring?

The second is Reviewer Calibration: is your committee independent, are conflicts kept out of the review, and could you show that no one scored a colleague's child?

Grants that don't meet the requirements can be treated as taxable expenditures, which carry excise taxes for the foundation, and recipients can face tax questions they didn't expect. Inside the company, a scholarship that seems to favor certain departments or families stops feeling like a benefit and starts feeling like favoritism.

Most scholarship windows open between January and March, so committees and procedures are set up in the months before. Changes to who reviews, what they see and what gets recorded are easiest to make before applications arrive.

In this 30-minute session, you'll learn how to:

• Turn your eligibility rules into screening questions, including verification that each applicant is connected to an eligible employee
• Write objective criteria into a weighted scorecard every reviewer uses
• Give an outside or independent committee its own access, separate from company staff
• Hide names, departments and other identifying fields from reviewers for blind review
• Control exactly which applications each reviewer sees
• Keep every application, score and comment in one record for each cycle
• Download results and applicant counts when your advisor needs them
• Collect acceptance, proof of enrollment and thank-you notes after the award, with every task tracked

This session covers process and records, not tax advice. Rules differ depending on whether a scholarship runs through a company foundation, a public charity or the company itself, so your tax advisor or counsel can tell you exactly what applies to your program.

Who should attend

Corporate giving and CSR managers, HR and benefits leaders, company foundation staff and scholarship committee chairs at companies that offer scholarships to employees' children, employees or community students. Finance and tax contacts who sign off on the program are welcome too.

Can't make it live? Register anyway and we'll send you the recording.

Common questions

Does Reviewr pay scholarship recipients? No. Reviewr tracks acceptance, proof of enrollment and thank-you notes. It doesn't disburse funds or track fund balances. You can export a recipient report for your finance team.

Can people outside our company serve as reviewers? Yes. Reviewers get their own access and see only the applications assigned to them, so an outside committee can score without company staff in the loop.