Matching scholarships increases endowments

The “U” offers fewer scholarships than peers, but they are larger on average.

by Mike Rose

When University alumnus Larry Bentson and his wife Nancy first began a $10 million endowment in 2004, 17 students received scholarships and were congratulated at Coffman Union.

Today, Bentson’s endowment offers $5,000 a year to 181 students – and he credits The President’s Scholarship Match program for the rapid growth.

“It allows twice as many kids to take advantage,” he said. “We think it’s a great idea.”

Since 2003, when the University began its Promise of Tomorrow scholarship drive, endowed private donations of at least $25,000 have been eligible for The President’s Scholarship Match.

Endowments – donations invested to create longer-lasting funds – are matched based on how they pay out each year. Typically, 5 percent of an endowment’s worth is paid out on a yearly basis. A $25,000 endowment would pay out roughly $1,250, which the University then matches and makes available to students.

“The match really is an incentive to donors,” said Martha Douglas, University Foundation spokeswoman.

Since 2003, the University has approved more than $48 million in new endowment funding that will be eligible for the President’s Scholarship Match, according to the foundation’s September 2007 report.

This amount came from 463 applications, all of which were approved. Of these, 410 were approved on a merit-based level, while the rest were classified as need-based.

Endowments which were established prior to the scholarship drive are not eligible for the matching program, Douglas said. The total endowment at the University – including donations now eligible for the match – has doubled since the drive began.

As of 2006, the University’s endowment was the 25th-largest nationally and behind only Michigan and Northwestern in the Big 10, according to the National Association of College and University Business Officers.

Douglas said funding for the match program comes from University-budgeted money already set aside for student support. She said the President’s Scholarship Match has been able to tie University money with specific donations.

The University has also increased the percentage of undergraduate students who receive some type of scholarship and the average size of each scholarship in recent years, University senior analyst Peter Zetterberg said.

The University now offers scholarships to 30 percent of undergraduates, up 3 percent from 2004. The average size of the scholarship has also increased to $4,161, up from $3,577 in 2004.

“The scholarship drive has been very successful,” Zetterberg said.

Despite the success, the University still gives scholarships to a smaller percentage of students than other large universities in a peer group.

The University has been grouped with five other Big Ten schools – Michigan, Wisconsin, Illinois, Ohio State and Penn State – as well as the University of Texas, the University of Washington and the University of Florida, for strategic positioning purposes, Zetterberg said.

Of these schools, only Florida and Washington offer scholarships to a smaller percentage of students than the University.

However, Zetterberg said only Michigan offered larger average scholarships than the University.

Last week, the Shakopee Mdewakanton Sioux Community gave $2.5 million toward an endowment, which will be matched by the University.

Tribal administrator Bill Rudnicki said the exact details of the endowment – such as who will receive scholarships and how funds will be disbursed – will be worked out in the next month or two.

“I think (the match) was a nice gesture,” he said. “It has been fun working with the University.”