In this type of fund the income is automatically paid annually to the institution (e.g. high school or college) designated by the client, and it is that organization's responsibility to determine who will receive the scholarship(s) each year. The Foundation's role in managing a designated fund is manifold:

• to invest the assets of the fund for permanence,
• to provide semi-annual statements to the client on the financial status of the fund,
• to maintain all legal paperwork, such as income tax reporting, associated with the scholarship, and
• to ensure that the grant is used for the purposes intended.

A minimum gift of $10,000 is required to set up this a designated scholarship fund.