Why do corporations give out scholarships?Chen Wan Lim
Scholarships are widely available from many sources and in many forms. Some offer full scholarships, while some offer partial scholarships. Some on the other hand, offer tuition fee scholarships and some in the form of living assistance. However the form may be, sometimes we can’t help but wonder why corporations give out scholarships? What do they intend to get out of it? Here are some possible reasons:
Corporate social responsibility (CSR)
Many companies have some form of CSR, be it direct donations to charity foundations, contributions-in-kind such as food and clothing and of course, scholarships. Scholarships are a form of monetary social contribution meant to benefit the younger generation. Some companies give out scholarships without any bonds attached while some companies require recipients of the scholarship to serve the company for a specified duration post-graduation.
Corporate income tax deduction for education sponsorship
Although giving out scholarships might not yield immediate and direct monetary benefits for the company, companies are still able to get some corporate income tax deduction for sponsoring students to higher educational institutions. This benefit is provided for under the Income Tax (Deduction for the Sponsorship of Scholarship to Student of Higher Educational Institution) Rules 2012.
Handing out scholarships on a competitive basis is also a form of marketing initiative aimed at increasing the company’s brand awareness and brand value. Offering scholarships is a good way to advertise and to promote the company’s brand name. The news of scholarships also travel like wildfire through word of mouth and through social media – the company can get significant publicity mileage by offering scholarships.
Form of investment for the company
Scholarships can act as a long term form of investment for a company too. For example, if the company is involved in a high niche and specialised industry which isn’t very popular to begin with and lacking credible candidates to fill in vacancies within the company, then offering scholarships to study in that field can be a form of recruitment for the company’s future staffing purposes.
Whatever the reason may be, students aspiring to continue their studies into tertiary education but do not have the financial means to do so can benefit from scholarships given out by corporations. For more information on any other form of education financial assistance, be sure to get in touch with counsellors from STUDYMASTERS.MY for more in-depth advice.