Dividend growth investing is a perfect investment to fund a scholarship in perpetuity. For just over $14,000 invested with a 3.5% yield, I could fund a $500 annual scholarship. Since I'll be invested in dividend growth stocks, I can then use the excess cash from the dividends as they grow to purchase more stock for the foundation to then increase it to two scholarships or one larger one. Investing with stable blue chip dividends growers such as KO, JNJ, PG, WMT, MCD and the like the income stream will be virtually guaranteed and will live on long after my wife and I are both gone.
A few different thoughts have gone through my mind for the scholarship's goals/requirements. Obviously academic achievement throughout high school is at the top of the list although I don't necessarily think it needs to be anyone that is in the top 5% or even 10% of their class because there's scholarships available for them. Non-education related requirements will be on the list as well. I've also gone back and forth on whether I'd be leaning more towards the science/engineering related fields of study or possibly education since my wife is a teacher. If the funds are available I'll set up 2, but I think the science/engineering is closer to the top of the list because there is a seriously lack in this field and the advances that have been made in just my lifetime are truly amazing. I'm also thinking that it will be geared towards middle or lower income families since they will be bombarded the most with student loans.
I haven't researched too much into setting up a foundation yet because I have a feeling it'll be best to have the full capital available if not already invested and then transfer the funds. If anyone has any insights into getting this set up any help would be appreciated.
Got any other ideas for requirements or focus of the scholarship? Do you have any pointers for setting up a scholarship in this fashion?