Creating a Scholarship Program

Creating a Scholarship Program

Creating a scholarship program for post-secondary students can raise awareness of your pool among potential future employees and requires consideration of three primary steps, including:
 
1. Define your “why.” 
Determine why your pool wants to offer a scholarship, which kinds of students you want to target, and whether your scholarship will be based on a student's financial need or other criteria. Ask these questions to support your work:

• How does scholarship align with your pool’s mission and vision? 

• Who does your pool wish to target with scholarships (students in any year of study, students in a particular field of study)?

• What criteria will your pool use to determine eligibility for a scholarship (grade point average, demographics, geographic boundaries, extracurricular and volunteer activities, work, written essays, letters of recommendation, etc.)?

• How will your pool budget for the scholarship and all administrative work to support the program from development to marketing to customer service to evaluation to awards? 

• Is the scholarship intended as a one-time offering or ongoing? For how long?

• Can students receive the scholarship more than once (is the scholarship limited to one award per student or can the student apply annually and receive awards annually, is there an annual or lifetime award cap)?

• Will your pool’s scholarship support tuition only, or also other living expenses? 

• What are the tax implications for your pool’s program?
    

2. Identify your pool’s scholarship and administration structure.
Your pool may wish to work with a post-secondary institution to establish a scholarship program, develop and administer a program on its own, or work with a third party provider. Each option has benefits and considerations so thoroughly exploring each is an important step.

Endowed Scholarship: Most schools offer endowed scholarship programs that are administered and managed by the school. Donors provide a minimum gift that is invested and from which a portion of interest earnings fund an annual scholarship. Donors typically are involved in naming the scholarship, determining criteria and meeting the student recipient. Donations for starting an endowed scholarship range widely, so the best thing to do is reach out to schools your pool is interested in to start a conversation. Endowed scholarships can be comparatively expensive to start, but they have long-term staying power and do not burden organizations with ongoing program administration and management. Schools may also offer opportunities for limited, multi-year scholarship programs that are not endowed.

Pool Program: Pools may opt to create, administer and manage their own scholarship programs. In this case, identifying an annual budget for the scholarship and staff time to support the program is critical. You’ll also need to think about eligibility criteria, how to promote the scholarship, review applications and make awards on an ongoing basis.

Third-Party Service Providers: There are a number of independent organizations that offer scholarship management services. These groups typically help design and promote a scholarship program, process applications and select recipients, disperse funds and provide reporting to their clients. Costs for these programs vary depending upon the level of service contracted.

Whether your pool creates an endowed scholarship, manages its own program or contracts with a provider, it is critical to also understand any applicable IRS rulings.

It’s also important to understand interactions between your scholarship and the school’s own support of student tuition, as well as state and federal aid. “Award displacement” is common and happens when a student receives a scholarship that leads to reduction in other types of support.

Resources
Examples of organizations that provide scholarship management programs include Scholarship America and International Scholarship & Tuition Services.

The National Scholarship Providers Association is a membership-based organization that provides resources to support the scholarship community and has a free directory of services and products offered by its members, including scholarship management and software providers.

3. Create a program with impact. 
To attract the largest number of applicants and enhance your pool’s visibility, think about what dollar amount will have a meaningful impact for recipients. Determining this amount starts with understanding the total cost of annual tuition for a typical student at schools with which your pool wants to work.

Pool Case Study
AGRiP member School Employers Trust Schools Employers Group (SET SEG) developed a scholarship program several years ago in response to the challenges of recruiting new talent, a desire to raise awareness of meaningful careers in public entity pooling, a way to encourage students to seek degrees aligned with risk management and insurance, and to broaden diversity in the pool’s talent pipeline.

The program makes scholarships available to students at 4-year and 2-year institutions, with those pursuing degrees receiving higher awards than those pursuing certificates. Students can annually renew their scholarship through proof of enrollment. Awards for those enrolled in 4-year programs are capped at $2,500 per year with a lifetime cap of $10,000. Those at 2-year institutions are eligible for awards of $1,000 per year with a cap of $2,000.

Criteria include that applicants: 

• Be a high school senior or college student pursuing an undergraduate degree in insurance or risk management.

• Be a full-time student (college students must be enrolled in at least 12 credit hours).

• Must have a minimum GPA of 3.0 for high school students and 2.5 for college students.

• Preference given to Michigan public high school student or graduate.

• Students who have immediate family (parents, siblings, spouse, step-family, and in-laws) that are active SET SEG employees or board members are not eligible.
    

Scholarship funds are required to be used exclusively for education costs, such as for tuition and/or books and materials.

SET SEG staff describe the scholarship program as one piece of a larger goal the pool has to build a robust, diverse talent pipeline over the long-term. 

“We are in the process of tying our scholarships and internships together," said Molly Mellema, Associate Executive Director. "The goal for this work is to use scholarships to build awareness of meaningful work in public entity pooling early in the high-school-to-college-to-career journey and to then ensure students with career interest in pooling are better primed for internships with SET SEG. This model will create a stronger talent pipeline for our pool while creating greater awareness of our industry."