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Although Northwestern
received financial support from its founders, particularly John
Evans and Orrington Lunt, the University in its early days needed
additional funds to begin operations. As a result, the trustees
turned to a method that was not unusual in those days – the
sale of "perpetual scholarships."
Sold from 1853
to 1867 for $100 in four installments of $25, the scholarships
entitled the purchaser and his male heirs to free tuition at Northwestern.
The scholarships provided a double benefit to the fledgling University
in that they brought in immediate cash as well as the promise
of future students. The University also offered limited term "transferable"
scholarships for a lesser amount that guaranteed a certain number
of years of free tuition.
The perpetual scholarships,
however, were a key component of the University’s early planning.
After earlier deciding to open a preparatory school to prepare
future University students, the trustees in June 1853 decided
to raise $200,000, half of which was expected to come from the
sale of perpetual scholarships.
At that same meeting,
the trustees elected Clark T. Hinman as Northwestern’s first
president. It was an inspired choice. Hinman, an influential Methodist
minister and church leader from Michigan, was instrumental in
the ensuing decision not to locate Northwestern on the property
at the northeast corner of Jackson Boulevard and LaSalle Street
in Chicago that had been purchased previously, but instead locate
outside of Chicago. He also strongly advocated building the University
first, rather than a preparatory school.
Most important, Hinman
was a first-rate evangelist for the new institution. He traveled
the Midwest, talking to church leaders, meeting with potential
faculty – and selling perpetual scholarships. He is credited
with the sale of $63,000 worth of scholarships before his untimely
death in October 1854. (He died before a single student enrolled,
as the University’s first classes were not held until November
1855.) Given that $100 was a considerable sum of money in those
pre-Civil War days, the financing mechanism proved remarkably
successful.
Originally the perpetual
scholarships were limited to the purchaser and his male heirs.
After the University became coeducational, that provision was
broadened to include female heirs of the original purchaser as
well.
However, the provisions
remain in effect that only one family member per generation may
use the scholarships and that the scholarship must be bequeathed
specifically to a descendant.
The University still
honors the scholarships, and in fact, a current Northwestern student
is the beneficiary of one, as have been approximately 400 other
students during the University’s 150 years.
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