2026 Best Practices Submission 

Presentation Title: 

Designing an Effective System for Scholarship Management and Utilization

Presenters:

Lefter Daku, Virginia Tech
Rachel E. Smucker, Virginia Tech

Presentation Description:

This session will present Virginia Tech’s best practices for improving private scholarship management and utilization in a highly decentralized environment. The session details the solution architecture and execution roadmap: quarterly fund-utilization reporting; a revised policy with clear procedures; standardized, deadline-driven spending plans anchored to a 95% utilization target; a dual-rate utilization template (actual and year-end modified); improved Foundation reporting for in-year monitoring; tighter year-end controls; and sustained training. The implementation of the new management-and-utilization system in FY2012 proved highly effective. Results were rapid and durable: by June 2017, unspent endowed balances fell from about $4M (FY2012) to under $500K, with parallel reductions across other administrative areas. Attendees will take away replicable practices for decentralized environments - governance and metrics that align awards with institutional priorities, strengthen donor relations, reduce compliance risk, and, most importantly, move scholarship dollars to students when they need them.

Statement of the Problem:

During the first decade of the 2000s, Virginia Tech experienced a noticeable and prolonged decline in the utilization of private scholarship funds. Although scholarship utilization had been on the Board of Visitors’ agenda since 2006, the situation deteriorated further by 2012. Between 2010 and 2012, approximately $9 million per year in private scholarship funds went unawarded to students. Large unspent scholarship balances resulted in fewer students receiving aid when they needed it, affecting retention and widening equity gaps for first-gen/Pell students. They also reduced financial efficiency, eroded donor relationships and fundraising prospects, and increased audit/compliance risks.

Identify the Solution:

In 2012, the Board of Visitors tasked the Office of Enrollment and Degree Management with leading efforts to address underutilization. We developed a plan to engage all stakeholders, diagnose root causes, and implement solutions. We surveyed key personnel across Virginia Tech’s academic and administrative areas to assess the scholarship administration system. The survey revealed significant issues, including incomplete scholarship information at college level; insufficient staff training and data analytics capacity; inconsistent Foundation scholarship reporting; unclear roles and procedures under Policy 3400; absent or fragmented scholarship spending plans; flawed utilization metrics (templates that obscure true rates); and operational misalignments between awarding systems (USFA) and billing functions (VT Foundation/Bursar). In response to the survey findings and to mitigate underutilization we designed and implemented a campus-wide scholarship management and utilization system that included: (1) quarterly fund-utilization reports from all senior management units beginning in FY2012; (2) revision of Policy 3400, developed with stakeholder input, accompanied by clear written procedures; (3) a formal spending-plan process for endowed and operating scholarships using standardized templates—draft plans due April 1 based on estimated payouts, with September 1 updates reflecting actual balances—anchored to a 95% utilization target and explicit treatment of funds with restrictive criteria; (4) a new utilization template that reports both the actual rate and a year-end modified rate (excluding problematic funds, reserves, and returns to principal); (5) updated VT Foundation reports to improve in-year monitoring; and (6) tighter operational controls, including increased billing frequency near fiscal year-end and strict awarding deadlines for units.

Implementation Timeline:

• FY2013 - Campus-wide survey of faculty and staff across all colleges and administrative areas involved in managing private scholarships.
• Introduction of a standardized template of scholarship spending plans.
• Design of a new scholarship utilization template.
• Enforcing the 95% utilization target.
• Drafting of new procedures related to spending plans and utilization reports.
• Training of faculty and staff in each unit.
• FY2014 - Comprehensive revision of Policy 3400: Administering Privately Funded Scholarships and Awards Managed by Virginia Tech.
• Assessment of hard-to-award and build reserve funds by unit.
• Campus-wide scholarship summit.
• FY2015-16 - New Foundation scholarship reports and refinement of existing reports.
• Annual training workshops.

Benefits & Retrospect:

The implementation of the new management-and-utilization system proved highly effective: by June 2017, unspent balances in endowed scholarship funds (colleges and USFA) had fallen from about $4 million in FY2012 to less than $500,000. Other administrative areas across campus also achieved sustained reductions in scholarship balances. The steadily shrinking of these balances indicates that scholarship funds are being awarded to students rather than remaining idle, enhancing affordability, broadening access, improving student success, and bolstering the university’s stewardship, enrollment performance, and fundraising credibility. Scholarship awards are now aligned with university priorities and initiatives, helping to reduce students’ unmet financial need and lower the effective “sticker price” for those facing financial barriers. The Scholarship Workgroup has been instrumental in implementing university-wide change from the bottom up under compressed timelines and within a decentralized environment. Significant improvements include the adoption of a university-wide financial aid strategy and the implementation of a third-party scholarship management platform. An unexpected outcome of implementing utilization reporting has been the development of a community of scholarship administrators across campus. This large group has been able to share advice, troubleshoot, and collectively establish procedures and best practices not only in utilizing privately funded scholarships but also in scholarship program development, selection, student support, and stewardship.