A memorial or scholarship fund is a separate investment entity that holds its assets to disburse to those who are awarded scholarships. Many people will make a memorial or scholarship fund in memory of someone close to them who has passed. This scholarship fund might give small amounts out to many recipients, large amounts out to a small number of recipients, or anywhere in between. Often, a memorial or scholarship fund is setup with a specific school. The school itself may have a third-party that manages these funds.
Because the fund is a separate investment entity, it requires its own EIN. The fund itself will be responsible for its own income and taxes. Scholarships and memorial funds are generally not taxable to the recipient, so they don’t need to concern themselves with their own taxes after distribution. The person who sets up the memorial or scholarship fund will no longer be in charge of it, and will consequently also not be taxed regarding its income.