The 'Made in the USA' singer is working with Cast Recovery to start 'The Lovato Treatment Scholarship' to help those with mental illnesses and seeking treatment following her estranged father Patrick Lovato's death in June.
She told E! News: "My dad suffered from mental illnesses ... He was suffering so bad that he couldn't function in society normally and he couldn't get the help that he needed. So, when he passed away, I thought myself, 'I wish there was something I could have done.' "
The 20-year-old star - who has previously been treated for severe depression and self harming - did not have a close relationship with her father, who died from cancer after a long and painful battle, in the past few years but she wants to "make it up to him".
Demi added: "Now, because he's passed away, I felt like it was too late and then I realized, 'Actually, it's not too late.' He wasn't a bad person, I didn't have the best relationship with him and for so many years I was mad at him, but when he passed away I realized none of it was even his fault. He had mental illnesses."
The 'X Factor' USA judge added: "Me and Cast Recovery are teaming up to provide the services that one person will need to get through treatment. Because treatment is actually very, very expensive.
And whether it's rehab or in-patient, out-patient - whatever it is - I want to be there providing that service because I didn't get the chance to do it with my dad and I want to make it up to him now that he's looking over me."
Demi was raised by her mother Dianna and her stepfather Eddie De La Garza, and she has previously opened up about her strained relationship with Patrick.
In 2011, she penned a song about him, 'For the Love of a Daughter', and in 2009 the singer-and-actress revealed she hadn't spoken to her biological father in "two years".
She said: "The last time I talked to him was two years ago. You try to have faith in somebody, even when you're the last person that believes in him. But when somebody lets you down after you've been the only one there for them, and so many times, you don't know what else to do. I had to cut off all connection. It was hurting me too much."
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