I want to start a foundation for a scholarship. I would like to get funding in some large donations, earn interest to grow the account and then return the principle. The remaining interest would then be the principle for the scholarship fund. Basically it would be an interest free loan for maybe 6 months or a year to get the fund established. Is this legal? What are the tax implications for the original donors (corporate of personal)? Could they deduct the income one year and then have to count it the next?

Tags: after, donations, earned, enough, fund, interest, principle, return, scholarship