Gary Reid provided advice, support and advocacy to low-income workers and beneficiaries.
He opened the Whanganui Peoples Centre with support from MPs Sue Bradford and Tariana Turia in 1999, working without pay for the first 18 months.
Reid died peacefully in Whanganui Hospital on May 17 last year.
Following his death, Volunteer Whanganui manager Sandra Rickey knew she had to honour Reid and the scholarship was born in collaboration with Chester Burrows.
As facilitator, Rickey approaches organisations or individuals for donations and forms a panel of three with two community members who select the recipient.
The recipient is selected depending on the challenges they face, the commitments they demonstrate and their description of what they will do with the grant.
Butler was born in Whanganui and lives up the river road, belonging to Parikino Marae and Ranana Marae.
She attended Mangamahu School before moving to Feilding High School and at 24 years old is now embarking on the four-year, full-time bachelor course.
"I felt so humbled and privileged that I was even selected for the interview stage. It was amazing to be called that afternoon and told I was the recipient," Butler said.
"I want to thank The Peoples Centre for putting this scholarship out. It was an honour to receive the award and the money will be used to help me with fees."
The scholarship will be awarded to new recipients every year for five years at which stage it will be reviewed.
The 10 sponsors who each donated $100 were Gail Bennett and Gloria Campbell – MSD, Chester Borrows, Volunteer Whanganui, Community House Whanganui, Victim Support, Balance Whanganui, Jigsaw Whanganui, PARS, Whanganui Peoples Centre and CLAW.