Building an Alumni-Funded Scholarship Through a Student Council
An alumni-funded scholarship can give a student council lasting influence over access to legal education. At Dema Justicia, that influence need not involve receiving charitable money in the council’s own name. The council can shape the purpose, support selection and oversee delivery under a structure recognised by Indonesian law and Universitas Gadjah Mada’s rules.
The workable question is who legally receives the donation, who owns the fund and who can award grants. A university account, a registered Indonesian charitable foundation and an Australian university-administered scholarship each provide a different answer. For readers in Australia, the comparison matters because alumni giving usually runs through established charities, tax-deductible institutions and official payment systems rather than informal transfers to student leaders.
| Funding route | Legal footing | Practical trade-off |
|---|---|---|
| University-administered fund | Rectorate approval, a restricted account and authorised university administration | Strong oversight, with fewer independent fundraising options |
| Indonesian charitable foundation | Legal personality, required approvals, separate accounts and public-benefit reporting | Greater independence, but heavier setup and compliance |
| Australian university or alumni trust | An established charity, official giving channels and an agreement with the Indonesian partner | Familiar giving procedures, but less direct council control |
Choose the correct legal structure
Indonesian charity law, including Law No. 12 of 2008 and the foundation rules under Government Regulation No. 28 of 2016, distinguishes charitable purposes from ordinary council activities. UGM’s current student-organisation regulations and faculty financial procedures determine whether the council may administer a designated scholarship. An appeal without institutional approval, a lawful recipient or proper accounting exposes donors and students to avoidable risk.
An alumni association cannot bypass those controls by calling contributions “support for students”. It may organise an appeal, but a foundation holding the money needs its own legal personality, required authorisations, bank accounts and reporting. An approved UGM fund can instead be created without a new foundation when the rectorate authorises its purpose, custody and spending rules.
Unless UGM has expressly delegated that authority, treat the council as a programme partner rather than the fund’s financial owner. Confirm the council’s legal status and power to solicit donations before publishing bank details. A written institutional decision is more useful than a general assurance that the money will be safe.
Define the scholarship’s purpose and rules
Write the scholarship rules before asking for money. State whether the award covers tuition, living costs, books or a supervised project; who qualifies; how applications are assessed; how conflicts and complaints are handled; and what happens to unused funds or interest. Published criteria should use lawful, objective distinctions such as financial need, academic merit or community contribution.
Donors may restrict a gift to education, a faculty or a project, but should not control individual beneficiaries unless the fund’s terms and applicable law permit it. In Australia, universities commonly apply the Equality Act 2006 and state discrimination law when selecting recipients. Those rules do not automatically govern an Indonesian fund, yet they offer a useful benchmark for international fundraising.
Provide a reasonable adjustment process for disability, keep sensitive information out of public donor updates and give unsuccessful applicants a defined review route. Personal circumstances should matter only where the published purpose makes them relevant. These safeguards make the scholarship defensible before regulators, donors and the student community.
Control donations and scholarship payments
Use one verified receiving account and a written sponsorship agreement between the council, the recipient institution and, where relevant, the alumni association. The agreement should identify permitted uses, payment stages, reporting duties, the treatment of unspent money and the consequences of closure. Restricted donations and scholarship awards should remain separate accounting categories, never becoming a general council budget.
Screen donors and payments under applicable anti-money-laundering and sanctions controls. Issue receipts only through the authorised institution, assign a unique reference to each transfer and reconcile receipts against the donor register and bank statements. Two authorised signatories, separation between collection and reconciliation, and periodic member reporting reduce fraud and reputational risk.
A fundraising page should state whether gifts are refundable, restricted or unrestricted, who receives them and whether a tax receipt is available. An alumni captain should not collect money through a personal account, promise awards before approval or ask students for “processing fees”. Such practices weaken charitable status and donor confidence.
Protect privacy, fairness and financial integrity
Transparency should cover money and power. Publish an annual statement showing amounts received, awards made, administrative costs and funds still available, with beneficiary details aggregated to preserve privacy. Donors can receive more individual reports, but public thanks should not disclose hardship narratives. Keep a written conflict-of-interest policy and record decisions in meeting minutes.
A related issue is student funding: the council’s compulsory activity-fee safeguards set out the legal questions surrounding mandatory participation charges. A voluntary alumni gift must never be represented as such a charge. The appeal should state that participation is voluntary and that existing student fees create no entitlement to a scholarship place.
Privacy protection also governs investigations. If eligibility turns on material held on a faculty laptop, an authorised university officer should seek access through approved procedures; the council should not inspect devices informally. Dema Justicia’s campus laptop-search limits reinforce the need for authority, necessity and proportionality. Apply the same discipline to donor databases and applications: collect necessary data, limit access, set deletion periods and obtain consent for onward transfers.
Make Australian alumni giving straightforward
For Australian alumni, the simplest route is usually an official giving platform run by their university, an alumni trust or another registered charity. Alumni around Melbourne and Sydney routinely use online giving pages, regular bank transfers and planned gifts, and many university precincts already provide gift-wiring and receipting systems. An Australian university can sometimes administer a named scholarship supporting students at an agreed overseas partner, subject to its due diligence and donor restrictions.
Tax treatment follows the receiving charity, regardless of the label “alumni scholarship”. Under the Charities Act 2013, a registered Australian charity generally needs an Australian Business Number, and eligible donations are tax-deductible only when the recipient is a Deductible Gift Recipient or the gift is otherwise covered by an appropriate endorsement. A Yogyakarta council does not become tax-deductible because Australian alumni give to it. Australian charities must also check the Charities Act 1995 when conducting overseas fundraising.
State rules add another layer. Fundraising in New South Wales may engage the Fundraising Act 1998, while Victorian appeals must meet that state’s charity and fundraising requirements. Check authorisation, disclosure and accounting duties before a public campaign or event. If the Indonesian foundation is the legal recipient, the agreement should allocate receipting, bank charges and reporting for the Australian contribution.
Launch carefully and build lasting trust
Before launch, secure written approval from the competent UGM office, confirm the legal vehicle, adopt the fund rules and complete the relevant tax and charity registrations. Run a fixed-budget pilot with a transparent timetable. A steering group can include council representatives, the fund administrator, an academic representative and an alumni member with no award-voting role. Review payment delays, inconsistent decisions and unintended barriers before expanding the appeal.
Maintain a documented annual cycle: report outcomes, reapprove budgets, renew delegations, check donor restrictions and decide whether unspent money should roll forward or transfer. Independent examination or audit should follow the thresholds applicable to the recipient. A small scholarship can still fail if cash handling or unrecorded promises become normal.
An alumni-funded scholarship gives a council meaningful influence over access to education, mentoring and community participation. Its durability comes from the recipient structure, published award rules and financial controls rather than the appeal’s popularity.
The enduring lesson is that donors must know where their money goes, students must receive fair and consistent consideration, and the council must act transparently as steward rather than financial owner. Trust depends on those boundaries remaining clear as alumni networks expand across Australian cities and beyond.
