Creating an Endowed Scholarship Through a Canadian Will
For Canadians who valued their own education or who want to support students of future generations, an endowed scholarship is among the most concrete ways to create lasting impact. A scholarship in your name (or in the name of someone you want to honour) funds annual awards to students indefinitely, often for decades.
How endowed scholarships work
A donor leaves $50,000 to a university's foundation, designating it as the '[Name] Memorial Scholarship.' The foundation:
- Holds the $50,000 as endowment principal
- Invests in a long-term portfolio
- Distributes 4% annually ($2,000) as a named scholarship to a qualifying student
- Reinvests excess investment return to grow the principal against inflation
- Continues this indefinitely
Over 25 years, the scholarship may fund 25+ student awards totalling $50,000+ in distributions, while the principal continues to grow.
Choosing the institution
Considerations:
- Your own alma mater (familiar, personal connection)
- The institution your family is associated with
- The institution serving the geographic community you want to support
- The institution with programs aligned with your values (specific faculties, mission)
University foundations, college foundations, and most other post-secondary institutions in Canada accept endowed scholarships.
Specifying criteria
The will language (or the endowment agreement) typically specifies:
- Field of study (specific faculty, department, or program)
- Financial need basis
- Academic merit basis
- Demographic considerations (first-generation, specific community)
- Geographic origin (students from specific provinces or regions)
- Or a combination
Common practice — name a primary field/criterion with flexibility for the institution to adjust if criteria are too narrow.
Naming
Naming conventions are flexible:
- "The [Donor Name] Scholarship in [Field]"
- "The [Person's Name] Memorial Scholarship"
- "The [Family Name] Award for [Specific Purpose]"
- "The [Name] Bursary"
The institution's planned-giving office helps with appropriate naming and any institutional requirements.
Will language
Standard endowed scholarship bequest:
"I give to [Institution] Foundation the sum of $[Amount] to be held as an endowed fund to be known as 'The [Name] Scholarship.' The annual income shall be used to fund scholarships to [criteria — e.g., 'undergraduate students enrolled in the Faculty of Engineering, with preference given to students demonstrating financial need']. If the criteria become impractical to administer, the [Institution]'s scholarship committee may adapt the criteria to closely related purposes."
Tax treatment
Endowed scholarship bequests generally qualify for the charitable donation tax credit, typically claimed on the deceased's terminal return — calculated on the full principal amount. Under the graduated-rate-estate rules, a gift by will can often be allocated among the estate's returns as well, so confirm the timing with an advisor. See our tax credit math article.
What we focus on at It's Simple Will
The will questionnaire supports educational endowment bequests with appropriate planning prompts.
Related guides
Citations & sources
- [1]Canadian Association of Gift Planners — CAGP
- [2]Universities Canada — Universities Canada
Frequently asked questions
How much do I need to establish an endowed scholarship?
Varies by institution. Most Canadian universities accept named endowed scholarships starting at $25,000-$50,000 (generating ~$1,000-$2,000 annual scholarships). Larger endowments ($100,000+) can fund more substantial annual scholarships ($4,000+). Major named scholarships at top institutions may require $500,000+. Community colleges typically have lower minimums than universities.
Can I name the scholarship after a family member?
Yes. Most named endowed scholarships honour a family member, mentor, or someone the donor wants to memorialize. Naming conventions are flexible — 'The [Name] Memorial Scholarship,' 'The [Name] Scholarship in [Subject],' 'The [Family Name] Award.' The institution's planned-giving office helps with naming.
Can I specify scholarship criteria?
Yes — donors typically specify criteria reflecting their values. Common criteria include — field of study (engineering, music, social work, etc.), financial need, academic merit, demographic considerations (first-generation university students, students from specific geographic regions, students with specific backgrounds). Criteria should be broad enough to ensure annual eligible recipients; the institution helps draft workable criteria.
How are scholarships actually awarded?
The institution's scholarship office applies the donor-specified criteria each year to identify eligible students, then awards the scholarship per the criteria. Most institutions provide annual stewardship reports to donor families showing who received scholarships and what they're studying.
Can the scholarship grow over time?
Most endowed funds invest the principal and distribute only a portion of investment return (typically 4%), with excess return reinvested to grow the principal against inflation. Over decades, well-managed endowments often grow substantially while continuing to fund annual scholarships.
What happens if my chosen field of study becomes obsolete?
Endowment agreements typically include flexibility clauses — if the original criteria become impractical, the institution can apply the funds to closely-related purposes. For example, a scholarship endowed for typewriter repair training could be redirected to a related field. Discuss flexibility with the institution when setting up the endowment.