SCHOLARSHIPS

Overview

With ever-increasing tuition costs and the growing demand for a knowledgeable and skilled workforce, seeking scholarships remains a high-priority fundraising endeavor at colleges and universities nationwide. Some institutions struggle to get donors excited about scholarships, while others have a hard time keeping up with the scholarship reports donors have come to expect in learning how their money is being used every year.  Here at IP we have reviewed major scholarship gifts from individual donors over the past few years and are analyzing new gifts nearly every week. This guide explores who's making scholarship gifts, who’s getting the money and what strings, if any, are attached to how the money is spent.

Who's Giving

One might expect alumni to make most scholarship gifts, but this isn’t necessarily the case. Less than half of the scholarship gifts we reviewed came from donors who called the recipient institution their alma mater. But even non-alumni donors have some type of connection to the school such as a being a member of the board or on the faculty.

In honor of his wife on their 30th wedding anniversary in 2017, Mike Glenn of Eads, Tennessee gave $250,000 to create the Donna H. Glenn Council Scholarship Endowment for aspiring freshmen journalists at the University of Mississippi. The couple’s latest gift is one of many they have made to Ole Miss, bring their total contributions to more than $1 milllion for athletics, the alumni association, marching band, and the School of Business Administration where Mr. Glenn earned his degree before embarking on a long career atFedEx Corp, where he served as executive vice president of market development before retiring in 2016.

The foundation of Las Positas College in Livermore, California recently announced it has received the largest-ever bequest in the college’s history, $6.85 million, from the estate of David and Barbara Mertes. Mr. Mertes was a founding board member at the college foundation and his wife served on the college’s board. Their bequest will be used to establish three scholarship funds: the first is aimed at helping performing arts students transfer from the college to a four-year institution, and the second will aid transferring students from any major including two basketball players, a male and a female, each year. The last scholarship will support students working toward an associate arts degree.

One of the largest scholarship related gifts awarded in recent years went to the University of the Pacific in Stockton, California. The late real estate developer Robert Powell and his wife Jeanette made two posthumous gifts to the school totaling $125 million, the bulk of which is being used to provide scholarships. Neither Robert nor Jeanette were alumni and both lacked a college degree, but Mr. Powell served on the university’s board while his wife was a regent.

University of Wisconsin-Madison recently announced a $50 million scholarship gift from alumni couple Albert and Nancy Nicholas to support scholarships and fellowships at the school. The gift, issued as a challenge, will be used to match, on a one-to-one basis, other gifts that support undergraduate and athletic scholarships and graduate fellowships.

At the end of 2014, Richard and Virginia Hunsaker gave $35 million to their alma mater, the University of Redlands, to fund scholarships.

Who's Getting

Surprisingly (or not so surprisingly) you aren’t going to find too many top-tier schools with astronomical tuition and fees (we’re looking at you Princeton and Harvard) on the top of scholarship donors' lists. There are a few highly ranked schools that catch scholarship donors’ attention like Columbia, the University of Chicago, and Duke, but most don’t even crack the top 50. Pulling rank definitely isn’t the way to go in this area of giving.

Major Universities

Larger universities and state schools are big scholarship recipients. Well known schools like Columbia, University of Wisconsin, Wake Forest, Penn State, the University of Michigan and Duke regularly receive substantial scholarship gifts. Other state schools like Chapman University, Wichita State, and the University of New Orleans also get their fair share of scholarship dollars. When it comes to scholarships, the name of the institution doesn’t really matter. What counts is the relationship the individual or family has with the college or university.

One of the most successful in building strong donor relationships is Vanderbilt University, which recently secured five scholarship donations of $1 million or more. Vandy fundraisers are doing something right.

Colleges

Small colleges, no matter what their rank is, seem to have a hard time stepping out of the shadows of better known state schools. Still, they’re no slouches when it comes to getting scholarship donors to open their wallets. The average scholarship gift for colleges, among those we reviewed, is around $4.5 million. Not bad. Of course, there are some huge gifts, like a $60 million scholarship gift at the Juilliard School and Leon and Toby Cooperman’s $25 million scholarship award at Hunter College, which should give small colleges looking for big checks a ray of hope.

What Are the Gifts For?

The overwhelming majority of scholarship donors direct their funds to be used in a specific area of study. A few examples include Carl Muckley’s $3.9 million gift to the University of New Orleans for philosophy and history scholarships; Gardner Marston’s $6.6 million to the University of Texas, Austin for aiding history majors; and Abby O’Neill’s $11 million to Columbia education majors who plan to teach in New York public schools.

.Coming in a distant second are general scholarship funds to be awarded at the school’s discretion. Recent examples include Milton and Denice Johnson's $10 million gift to Belmont University in Nashville to create an endowed scholarship fund bearing their name; Georgia Roberson’s $6.25 million gift to North Greenville University; John W. Long’s $5 million gift to California State, Fresno; and Jeff and Kellie Hepper’s $5 million donation to Penn State.

Need-based and first-generation scholarship funds seem to get the least amount of attention from individual donors. Those that do give in this area tend to give in big way. Case in point: Silicon Valley investor Bob King and his wife Dottie in 2015 gave another $21 million to their King Scholar Leadership Program, which provides Dartmouth scholarships to students from developing nations. The gift brings the couple’s scholarship commitment to $35 million, Dartmouth said. Also, Christine and Lon Cross gave Chapman University $10 million, while Leon and Toby Cooperman gave Hunter College $25 million. Both gifts are going in full toward need-based scholarships and helping first-generation college students.

How the Gifts Happen

Multimillion-dollar scholarship gifts don’t come in response to dialing for dollars campaigns, fundraising brochures, or email solicitations. College and university deans and presidents court scholarship donors, with individual deans doing the heavy lift. The length of the courtship varies. Some scholarship gifts only take a few months, while others are many years in the making and, in some cases, supplemented by repeat gifts from donors after an endowed scholarship is created.

Scholarships can be overshadowed by the individual donors’ personal interests or other pet projects they would rather support. For instance, in 2011 Stanford completed a massive campaign to raise more than $6 billion while working in the aftermath of the Great Recession. But some goals of the campaign such as Stanford’s $300 million target for financial aid and scholarships fell short, by $50 million in scholarships. Instead donors wanted to support things they cared more about, according to Martin Shell, Stanford’s vice president of development. He points to examples like Steyer and Kathryn Taylor's $50 million check for a center for sustainable energy and Jay Precourt’s $50 million contribution for an institute for alternative energy sources.

With $1 billion in the fundraising bank, it doesn’t seem as though there would be any losers in this scenario. However, as vice president of development Martin Shell explains it, a decent chunk of that money has been earmarked for specific projects decided upon by the donor — like Steyer and Kathryn Taylor's $50 million check for a center for sustainable energy and Jay Precourt’s $50 million check for an institute for alternative energy sources.

Since fundraising for scholarships is a bit more vague than say, fundraising to build a new football stadium or institute, it is more difficult to appeal to donors’ keenest  interests. This is one reason why all an institution’s major heads — deans, provosts and presidents — are involved when courting large donors for scholarship funding. 

What Strings Are Attached?

Scholarship gifts don’t have many, if any, strings attached other than how the donor designates the use of the funds to be used for a particular field of study or type of recipient. Whether big checks create or add to a scholarship fund, they are almost always named for the donor. Whether that comes as a suggestion by the donor, the estate bequeathing the money, or whether it’s just something institution routinely do isn’t clear, but slapping a name on a scholarship after someone writes a $1 million-dollar-plus check to create it is just one way colleges and universities cement relations with the donors supporting students in this way.  

Insights & Tips

Anyone looking to solicit alumni for scholarships should dig back into the archives. The average person giving scholarship and related donations graduated in 1964, more than 50 years ago. Younger alumni, especially those sitting on a mountain of student loan debt, aren’t going to be the best prospects for scholarship gifts. What could be considered the younger donors in this giving space are generally out of school for 35 to 40 years.

After three to five decades in the real world, how are these folks amassing enough wealth to give away million-dollar chunks of their fortunes? It’s a mixed bag, but finance industry donors like to give and give big — recently accounting for more than $175 million in scholarship gifts. The newer money tends to come from hedge fund founders and managers, so it may be a good idea to check on finance and economics majors while digging through alumni archives. 

While scholarships are desperately needed at many colleges and universities, they are sometimes given short shrift by affluent donors who want to make their mark on an institution in other ways such as paying for a new institute or center. Fundraisers need to find ways to make scholarship gifts attractive to donors at all levels, including those who want to make larger, transformative gifts, said Ron Schiller, a seasoned fundraiser turned executive recruiter, in an interview with Inside Philanthropy.

When Schiller worked on a campaign at the University of Chicago, the board and campus leaders discussed a big idea for student aid. In addition to seeking individual scholarships that help one student at a time, the university decided to tackle the problem of student loan debt in a transformative way. The goal was to enable the university to recruit and support the very best students by removing a large obstacle standing in the way of many low-income families who, even with financial aid, cannot afford the loans required to send their children to college. One anonymous donor found the idea so inspiring that he contributed the first $100 million to pay for the program's initial 20 years with the understanding that others would give toward what has become a $350 million goal to underwrite the program in perpetuity. A lot of any fundraiser’s job, Schiller added, “is getting people to think bigger."

Scholarships are one area in individual giving where faculty members, from professors to presidents, play a significant role. For example, Mary Sue Coleman, the now retired president of the University of Michigan regularly donated her annual raises to her institution. In addition to those annual gifts, Coleman recently cut a $1 million check to the university.

Like Coleman's gifts, nearly all scholarship donations result from a close connection to the institution. But sometimes, geography is all that matters. Take Robert Sahling, for example. He awarded the University of Nebraska $1.2 million. He never went to the university, but grew up in Kenesaw, Nebraska—about 100 miles away from the University, which prompted his gift.

The key to fundraising for scholarships is finding the connection (whether it's simply geography, state pride, or the love of a college team), developing that connection, and pulling out all the stops to build a good relationship and secure the gift.