For many associations, student scholarships are a way to create the next generation of members, serving as an entry point for people just entering the field that will define their career.

And for associations that work in a niche field, offering a scholarship to potential up-and-comers can expose them to an area they might not otherwise have considered. For example, the American Association of Candy Technologists offers a scholarship for those who show an interest in the confectionary field.

Jackie Bright, executive director of the National Scholarship Providers Association (NSPA), said that scholarships are often valuable for both the recipient and the organization offering them.

“As the cost of attendance continues to rise, scholarships are a crucial component of bridging financial gaps and/or removing access barriers for students,” she said. “Consequently, by offering scholarships and strategically recruiting, they can play an impactful role in strengthening awareness for both organizations and professional sectors.”

What Goes Into a Scholarship?

If you’ve decided to launch a scholarship, you’ll want to ensure that it can meet the needs of both your organization and the recipients.

In an article posted on ASAE’s website last fall, Erika Orsulak, a special projects consultant for NSPA, noted that it was important to consider the intent of the overall scholarship program.

“That will determine which students to support and how best to support them,” Orsulak wrote. “It will also help define program specifics, such as the resources required, activities to pursue, and potential benefits to recipients.”

Orsulak goes on to explain the different parts that go into the administration of a scholarship, including recruitment, building an application process that gathers the right kind of data, creating a selection process that reflects the intent of the program, and offering awards that impact the program’s goals.

“There are a lot of variables that students take into consideration, ranging from award amount, selection criteria, ease of application, and award timing,” Bright added. “Renewable awards are particularly attractive to students.”

Offering “Soft” Benefits

While a financial award is appreciated by the target audience, there are other ways to meet the dual goal of supporting emerging talent and deepening the path to membership. It takes time to develop additional resources that meet the needs of potential members—but doing so can be an effective way to continue the conversation after awarding scholarships to students.

“We do find that scholarships which provide additional ways for students to receive support, either through networking or industry connections, can be powerful elements of the higher-education equation that leads to student success,” Bright said.

Another way to strengthen the benefits of the scholarship is to create alumni groups for scholarship recipients, which Bright said can help to strengthen industry engagement.

Other ideas from Bright include:

• Mentoring programs between active members and award recipients
• Complimentary association memberships for award recipients
• Invitations to or recognitions during organizational events
• Student job fairs

All of these initiatives help establish scholarship recipients as the future of the field and anchor them within the world of your association. Another path to cultivating the next generation of members: adding a membership tier that prioritizes the needs of people who are emerging in the field. While not all scholarship recipients will be young, many will be, and finding ways to build membership with them in mind is another way to cultivate the next generation regardless of whether they’ve landed a scholarship. After all, people who have received a scholarship have a concrete reason to maintain a relationship with your association—but you can’t offer a scholarship to everyone.

Pitfalls to Consider

While scholarships are valuable resources to students, as well as a way to avoid some of the pain of student loans, they can create unexpected headaches in the form of taxes on scholarships.

As explained by the website Scholarship America, scholarships that go toward living, travel, and research expenses can be taxed under U.S. law. While there are some exceptions, such as in the health field, it can lead to hardships on students who were not expecting their scholarships to be taxed.

“Those consequences are most stark for the student: when more of their scholarship funds go to taxes, they have less available to pay for their education,” writer Matt Konrad explained. “Making matters worse, most federal financial aid calculations are based on the pre-tax value of the scholarship, meaning they risk a shortfall in aid when they can least afford it.”

Another consideration is accountability in the process, to ensure that rules in the scholarship program are being followed.

“Associations that offer scholarships should also adhere to the highest ethical standards,” Orsulak wrote. “In particular, ensure ethical conduct in the areas of student information collection and protection, conflict of interest, bias, equity, and selection. Also document policies, procedures, and examples of exceptions to such rules.”

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