The AKPsi Foundation collects tax-deductible contributions and puts them in chapter specific scholarship endowments. Interest income from these endowments is annually returned to each chapter in the form of a scholarship.
Funding is awarded for use in the following academic year toward tuition, course-related fees, and required textbooks and supplies.
AKPsi membership dues are not an eligible academic expense.
What chapters can start scholarship endowments?
Any chapter can create a scholarship endowment. Three things need to happen for a chapter to start a scholarship fund:
- The chapter must approve it
- A scholarship fund agreement is signed by the chapter president and the Alpha Kappa Psi Foundation
- A “kick-off” contribution of $250 or more is received by the foundation from the chapter or an individual
What can chapters spend funds on?
Because tax-deductible contributions were used to create these endowments, the IRS only allows the foundation to use funds for educational purposes. Chapters have the option of awarding their scholarship to one or more individuals in their chapter, or use the funds to offset registration fees for the Principled Business Leadership Institute or College of Leadership.
Who makes contributions to scholarship endowments?
Anyone can make a contribution to the Alpha Kappa Psi Foundation and restrict the gift to benefit an established chapter scholarship endowment. In most cases, the chapters themselves fund the endowments with some help from alumni. Alumni receive an important benefit when making a gift to a chapter scholarship fund: they are eligible to receive a valuable IRS tax deduction (whereas gifts made directly to a chapter are not eligible for a tax deduction).
When can a chapter award money, and how much will it be?
Once a chapter’s scholarship endowment reaches or exceeds a balance of $10,000, it is considered officially endowed. At that point, interest income (budgeted at 5%) will be returned to the chapter the following academic year and every year thereafter. The amount of a scholarship will be 5% of the endowment’s balance at the beginning of the academic year. It is assumed the the market will grow at 5% or greater—if the market peforms better than 5%, the extra amount of interest income created will stay in the fund and add to the principal. If the market performs less than 5%, awarding the scholarship could cause a depletion of the principal. However, over the long run, the 5% amount will not only protect the principal, but also allow for growth as the markets fluctuate from year to year.
Does my chapter have a fund?
Contact email@example.com to learn more.