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 Õ 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 Õ 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. Û
