It's not a government scholarship, so there's no real legal issue here, or at least, not one I'm aware of. While I'm pretty damn certain that this group does have racist motivations and beliefs, it's not my job to stop them. As long as they don't hurt or try to hurt non-white people, leave them alone. They can be racist all they want, that's their right. In the end, they hurt only themselves. Racism is a toxic belief system that is based on hatred, exclusivity and blind pride-for-no-reason (just because a lot of white people have done great stuff doesn't give white people the permission to be proud of themselves - the accomplishments of Newton, Clarke, Crick and Fermat are the accomplishments of Newton, Clarke, Crick and Fermat, not yours - you've got no right to be proud of what OTHERS did, even if you belong to the same ethnic group. Same thing applies to all other ethnic groups - just because your ancestors did well doesn't mean you're anything special. Taking pride in the accomplishments of others and then using their achievements (which you had nothing to do with) to bolster your own sense of pride is pathetic. It's also really easy to do).
So there's nothing that should be done to stop this scholarship. If they want to give money to white students, and if they're not from the government, hell, let them. And it's only 500 dollars anyway - that kind of money is peanut money.
So yeah - if they want to be racist, let em, so long as it doesn't result in any harm to other groups. If they want to give some white students a couple of hundred bucks, sure, why not. It's not like it can hurt anyone.