Mike O’Hare’s wife had cancer for six months, but she never cried until she signed the letter saying she couldn’t return to the Deer Lakes school district where she had worked as an elementary school teacher, reading specialist, and principal. That’s how devoted she was to her students. When O’Hare looked for a way to honor his wife’s memory in 2004, a scholarship for Deer Lakes high school graduates heading to college felt right, particularly since Geraldine O’Hare had taught students graduating that year. His one-time funding of a scholarship has blossomed into funding several awards of $1,000 per student, first in his wife’s memory and, more recently, in his parents’ memory.
O’Hare’s scholarships fit a pattern for scholarship donors. “They have a regard for somebody who helped them, and they want to pay it forward,” says Pat Roberts, vice president for development and alumni relations at Hiram College in Hiram, Ohio. That person could be a family member or faculty member. Or perhaps the donor received help himself that he’d like to repay, or he’d like to have an impact on future generations, says Roberts. He also finds that moments, good and bad, inspire donations. Those moments could arise from a financial windfall, a near-death experience, a death in the family, or the realization that the donors have disposable income once their children graduate from school.
In the case of O’Hare, a retired sales executive from snack food company Snyder’s-Lance, several motivations combined. In addition to honoring his late wife, he wanted to give his son Adam a way to remember his mother and to learn about the importance of giving. Adam, who was eleven years old when his mother passed away, has given a plaque to scholarship winners at the awards dinners for a number of years.
O’Hare thinks there’s also an element of giving back for the college scholarship that he received. “My father gave me $300 when I graduated from high school,” he says. That was all his truck driver father could afford, but his father’s employer gave him a college scholarship of $500 a year. “That was pretty awesome,” O’Hare says. While his working-class parents weren’t rich in cash, they contributed in other ways, including “encouragement, love, home-cooked meals, and whatever else it took to allow their children to meet with success,” as he notes in the brochure for the Dody & Stel O’Hare Memorial Scholarship, which he started in 2015.
O’Hare keeps a stash of notes from the scholarship winners. “The thank you notes I have received from these grateful students bring tears to my eyes,” he says. He’s also happy that he can support both Deer Lakes, where Geraldine was his high school sweetheart, and Slippery Rock University, also in Pennsylvania, which they both attended.
O’Hare has found the mechanics of awarding scholarships easy. In the early days, he worked with a guidance counselor at Deer Lakes. However, he had to get creative when he switched to funding scholarships with stocks instead of cash. Deer Lakes couldn’t handle cash, so he went to Slippery Rock University’s foundation, which now manages scholarship logistics for him. He has shifted from awarding scholarships to Deer Lakes graduates going to any college to rewarding any Deer Lakes graduate going to Slippery Rock University.
Individuals who would like to set up a scholarship at an alma mater should call the college’s development office, says Roberts. “Articulate what you want, and then work with the professional at the institution and your own legal and tax professionals.” Charitable donations cut the donors’ adjusted gross income for tax purposes, although this typically isn’t a driving motivation for donors. “I don’t want to work with someone who’s donating just for the tax incentive,” says Roberts. “I want all of our donors to be philanthropic first.”
When setting the parameters for scholarship recipients, Roberts cautions that you can’t set up a scholarship to benefit only family members or a specific person. That’s against the law. “We want their input, but they cannot select a specific recipient.” That’s partly because the school must respect the confidentiality of some student information, such as the parents’ financial statements. However, scholarships can be need or merit based.
“Too many people think scholarships are just for bright kids, kids with a 4.0 grade point average,” says Roberts. It doesn’t have to be that way. O’Hare’s current scholarship awards $1,000 to eligible students in their first year and then $1,000 per year for students who achieve a 3.0 grade point average at Slippery Rock, starting with their second year at the school.
Don’t define your scholarship recipients too narrowly if you’re endowing a scholarship you mean to be perpetual. “The magic words are ‘first preference,’” says Roberts. When you build in flexibility, 100 years from now, when there’s no one who meets your original criteria, the school can award your scholarship to someone who fits the spirit of your intentions.
There are different kinds of funding. Some people start with a one-time scholarship. In this case, you provide the money and it’s given out right away. A more lasting approach is to endow a scholarship with enough money that it should be able to last forever. For this approach, you need to donate at least $25,000 so an annual scholarship of $1,250 can be paid without tapping the principal, says Roberts. O’Hare’s scholarships haven’t been endowed for perpetuity, but he hopes to keep giving as long as the stock market’s movements make it practical.
You may be able to boost the amount of your scholarship by taking advantage of corporate programs that match charitable donations. Programs vary greatly, so check with your company’s human resources department.
O’Hare urges everyone to fund scholarships. He says, “Don’t worry about the amount. Even if it’s $100, somebody will be honored.”
About the Author
Susan Weiner is a Chartered Financial Analyst®, journalist, and a writer and editor for leading investment and wealth management firms. Her work has been featured in Advisor Perspectives, The Boston Globe, Bottom Line Personal, CFA Magazine, Financial Planning, Louis Rukeyser’s Mutual Funds, Wealth Manager, and other national publications.