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Can you form an investment club for educational purposes and
use the proceeds to fund a memorial scholarship?

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The answer is 'yes', but you have to be aware of a few things. You may be forming the investment club for educational purposes, but it's operations are going to be subject to the same taxable requirements as any other investment clubs. You will need to define 'proceeds'. You could have  your agreement state that you will operate for a certain number of years, and then turn your assets over to a charity. If you plan on turning your assets over to the charity annually, you will have to come to grips with what you do about capital gains. Are they to be reinvested or given to charity as realized?

 

Rip West
Saint Paul, MN