Century Challenge: Twice the Financial Aid to 100 Years of Students
Unique part of BU’s comprehensive campaign
When she was 15, Severine Cukierman got a job as a receptionist at a Miami dance center. Bright and ambitious, she soon became an instructor, while mastering four languages in her spare time. The School of Management knew promise when it saw it: Cukierman (SMG’13) came to BU on a scholarship funded by Amy Wallman (SMG’71) and her husband, Richard.
Almost half of BU’s 4,409 full-time freshmen in a recent class were deemed by the University to need aid, and the average need-based loan was $6,226. BU’s new Century Challenge aims to helps such students, not just in the here and now, but for five generations.
Part of the University’s comprehensive fundraising campaign, the challenge, with a goal of $100 million, comprises two-thirds of the $150 million the campaign seeks to raise for student support. The proposition is straightforward: donors must give at least $100,000 to endow an undergraduate scholarship. They can name that endowment, and can designate the criteria for students to be eligible for the scholarship. “For example,” says Scott Nichols, vice president for development and alumni relations, “you could say that you want it to go to center-city urban kids or you want it to go to students who are interested in communications.”
As with any endowment, a Century Challenge endowment will earn interest each year, and that interest will be paid out as scholarship money to undergraduates, at a rate deemed prudent and sustainable by the University’s leaders—often in the 4 percent range. Here’s the twist: BU will match that endowment payout every year for the first 100 years after the fund’s activation, thereby doubling the good done in the donor’s name. The University’s match will come from its general financial aid budget.
For example: if a donor gives $100,000, and the fund pays out $4,000 the first year, the student will receive $8,000 in scholarship support. (For actuarial reasons, if the challenge raises more than $100 million, the University can match only interest earned on that first $100 million. So “get your gift in early,” says Nichols with a smile.)
Nichols says the challenge is one of three features of the campaign that are unique to BU (the others are a students’ pledge of one million hours of community service and the speed with which BU is reaching out to alumni to make up for a past lack of cultivation on the part of the University). So far, says Nichols, there have been 21 pledges to the challenge, totaling more than $7 million.
Steven Hall, vice president for alumni relations, says based on historic market returns, a $100,000 donation today will grow to more than $5 million a century from now. Hall says the longevity of the financial arrangement is the main appeal to a donor. “If somebody’s willing to give to an endowment, they’re already thinking beyond their lifetime,” he says. “It’s your legacy.”6 Comments