Postsecondary Scholarships

This manual describes the step-by-step procedures by which ImpactMatters analyzes postsecondary scholarships nonprofits. We recommend reading the program analysis methodology first.

Program characteristics

Eligibility requirements

Merit: Merit-based scholarships require students to demonstrate a certain level of academic excellence at the time of application (usually high school). A scholarship is not considered merit-based if it only has G.P.A. maintenance requirements during college and does not have merit requirements at the time of application. Athletic scholarships, beauty pageant scholarships and the like are not considered merit-based (unless they are also awarded on the basis of academic achievement).

Need: Need-based scholarships are those that require students to demonstrate financial need. Do not assume scholarships are need-based because they serve a special niche group that may or may not be needy (e.g., children of fallen soldiers). The program must explicitly state it targets students with financial need.

Both merit and need: This category is used for scholarships that have both a merit-based eligibility requirement and a need-based eligibility requirement, as defined above.

Neither merit nor need: This category is used for all scholarships that do not report any merit or need requirements. Scholarships serving a niche group but with no merit or need requirements should be designated as “neither merit nor need.”

Program costs

Starting figure for program costs

We first search the nonprofit’s Form 990 (Part IX program service expenses column b) for scholarship program costs. These costs include the total dollar value of scholarships provided (usually reported on line 2) as well as expenses incurred in implementing the scholarship program (usually listed in column b and summarized on row 25 column b). If the nonprofit only runs a scholarship program, we take the total program service expenses reported on row 25 column b.

If the only source of information about scholarship program cost and scholarship value is Program Service Accomplishments lines 4a-e and

  1. only the “Expenses” line from 4a-e has been filled, we use that line for both scholarship program cost and scholarship value, i.e., we assume the program costs only as much as the value of scholarships themselves and that there were no other costs to administer the scholarships.


  1. the “Grants” line from 4a-e has been filled, we use that line as scholarship value via a manual override and the “Expenses” line as the scholarship program cost. If the nonprofit only has one program cost line (4a), we can combine ambiguous information from “statement of functional expenses” line 1 and lines 24a-e. These line items do not need to clearly indicate that they are the scholarships amount; we infer that these are scholarship amounts given that there is no other place the scholarship amounts could go. We exclude any unambiguous non-scholarship amounts listed in 24a-e from this amount.

Our analysis does not differ depending on whether the scholarship covers tuition or other expenses one would incur while attending college (groceries, room and board, etc.). This is all considered the cost of college.

Worth noting, nonprofits report program expenses separately from management and general expenses and fundraising expenses on the Form 990. We only consider program costs to be those reported by the nonprofit in the “program service expenses” column on the Statement of Functional Expenses section of the 990. These program expenses may include fundraising or employee compensation, but only if incurred in implementation of the nonprofit’s programs. Some nonprofits only run a scholarship program but report no program expenses aside from the total dollar value of scholarships provided on the Form 990. Instead, they report expenses (such as employee compensation, advertising and promotion, fundraising and related expenses) separately from programmatic expenses. It could be argued that these expenses must be related to the implementation of a scholarship program if that program is the nonprofit’s only activity. However, we lack sufficient information to identify which expenses are related to the implementation of a scholarship program. Limited to publicly available information, we must take nonprofits’ data “as is,” i.e., we must consider only those costs reported by each nonprofit as program service expenses.

If scholarship program costs cannot be found in the Form 990, we search for audited financials on the nonprofit’s website, annual report and the Federal Audit Clearinghouse/ProPublica’s Nonprofit Explorer.

Extra services within a scholarship program

We note whether a scholarship program provides extra services aside from the financial award (see list of eligible extra services below). We first review the nonprofit’s Form 990 for evidence of any of the following extra services. If the 990 is not sufficiently descriptive, we may also search the nonprofit’s website, annual reports and GuideStar profile for evidence that it provides extra services.

If the nonprofit has itemized its costs, we simply subtract the costs of the above extra services from the starting figure for program costs.

If the nonprofit has not itemized its costs, we apply a 5 percent discount to the starting figure for program costs for each extra service provided. E.g., if a scholarship program provides both mentorship and career counseling, we discount program costs by a total of 10 percent.

List of eligible extra services:

  • Mentorship

  • Career counseling

  • Test prep

  • College selection (e.g., college tours, college counseling)

  • Conferences for scholars

  • Care packages for scholars

Note the special cases when a nonprofit has a program that encapsulates scholarships along with other financial disbursements (loans, research grants, disaster relief, etc). If we know the amount of those other financial disbursements, then we subtract those amounts from program costs and continue with our analysis. If we do not know their value, we disqualify the program from analysis.

Other programs

Some nonprofits run other grantmaking programs in addition to granting scholarships to individuals. Usually, these nonprofits are affiliated with a specific educational institution and provide grants to support the institution. Wherever possible, we exclude from our calculation the costs associated with these other programs, as reported by the nonprofit. We will not review a nonprofit unless at least 15 percent of its programmatic activities are scholarship related.

The costs of grantmaking programs and scholarship programs are usually identified on the Form 990 Part IX program service expenses column b, and Schedule I parts II and III. To isolate scholarship program costs, estimate the proportion of grantmaking provided as individual scholarships and multiply this percentage by the total functional expenses reported in Part IX row 25 column b.

An example: According to its 2017 Form 990, a nonprofit disbursed $300,000 in scholarships (Part IX row 2 column b) and $200,000 in grants (Part IX row 1 column b) to an affiliated university. Total functional expenses were $600,000 (Part IX row 25 column b). To calculate the total scholarship program costs:

  1. Estimate proportion of grantmaking provided as individual scholarships: $300,000 / ($300,000 + $200,000) = 0.6

  2. Apply this percentage to the total functional expenses: 0.6 * $600,000 = $360,000

Partner costs

Government costs

We assume government costs to be zero. See program analysis methodology.

Partner costs

Nonprofits that disburse scholarships directly to recipient students do not rely on any partner organizations, so we assume partner costs for these nonprofits to be zero.

Other scholarship nonprofits provide financial awards to the educational institutions where recipients are studying. There are two types of scholarship nonprofits here:

  1. Nonprofits that identify scholarship recipients: Some nonprofits identify scholarship recipients and then disburse the awards directly to the educational institution where the recipient is studying. This information is reported on the Form 990 Schedule I part III. If the number of scholarship recipients and total amount granted are identified on the Form 990, we assume that the nonprofit has identified the scholarship recipients in advance and is disbursing the awards directly to the educational institution(s) where the recipients are studying. Other indications that the nonprofit identifies scholarship recipients may be found on the nonprofit’s website, including application forms or instructions for applying for the scholarships. We assume zero partner costs for the educational institution, since nonprofits in this category have already reviewed applicants and identified scholarship awardees.

  2. Nonprofits that rely on partner educational institutions to identify scholarship recipients: Other nonprofits provide a lump sum grant to an educational institution, which then selects and administers scholarships to individual students. Schedule I Part II may list a lump sum award to a college which then administers the award; example: Jefferson College of Health Sciences Foundation. Unless the nonprofit under analysis has explicitly reported costs incurred by partner organizations in the disbursement of the award, we assume partner costs to be zero.

Beneficiary costs

We assume beneficiary costs to be zero.