Scholarship Trusts: An Investment in the Future

Scholarship trusts are a form of charitable trust with the specific philanthropic intent of funding education for a select group of students. While a scholarship trust can be easy to establish, either through a Will or Trust, the program will not be successful without diligent oversight. These trusts present unique challenges regarding investment, taxation, and distribution. Oregon Pacific Bank specializes in charitable trust administration.

A scholarship trust must be invested appropriately to meet the needs of both the current recipients and generations who will receive funding in the future. This balance is achieved through careful investing, creating income for near-term needs and growth for the long term. Oregon Pacific Bank has created portfolios that provide the necessary growth and income with a tactical investment advisory team actively monitoring the ever-changing market environment.

A scholarship trust needs to abide by guidelines set by the Internal Revenue Service. For tax purposes, a scholarship trust is categorized as a Private Foundation and the trustee must file the appropriate federal and state tax returns each year. Oregon Pacific Bank uses specialized trust accounting software to produce quality tax reporting information and we work with numerous local professional tax preparers to ensure accurate and timely filing of the returns.

The trustee is responsible for calculating and distributing the scholarship amount per the terms of the trust document. The criteria for the selection of scholarship recipients are unique in every trust document. Oregon Pacific Bank has works directly with high school scholarship committees, partners with the Oregon Office of Student Access and Completion (OSAC), and has scholarship selection committees within the Bank to comply with donors’ directions. Once the students are selected, Oregon Pacific Bank makes the scholarship distributions directly to the college or university and recovers and redistributes funds when student plans change.

The conditions for students to continue receiving scholarship funds, such as attendance or grade point average, are also found in the trust. Oregon Pacific Bank establishes a relationship with the students and works with them personally to gather information to meet the requirements, allowing the student to receive their full award.

Oregon Pacific Bank has a knowledgeable staff with years of experience administering scholarship trusts. We offer skilled investment management, specialized accounting software, professional tax relationships, and extensive administrative capability to provide outstanding trustee services for all scholarship trust needs.