Finding a good candidate for fellowships, like charity, should probably begin at home. The student who is working in your lab, assisting with your research, or writing an honors thesis under your supervision is usually a much better bet than the one in the course you are teaching who earned a stellar grade but with whom you have no relation to speak of outside of class. The rule here is simple: Given a choice between the student you know well and one you know hardly at all, always recommend the former.
But what specific qualities should you look for in those students with whom you are already familiar? The answer here is quite simple too: Selection committees aren’t impressed with mere busyness; what they want most to see is passion and commitment. The best fellowship candidates are those who, regardless of their year in school, already possess a fairly well-defined sense of what they want to accomplish with their lives, either intellectually or professionally, and most likely have already begun to take the firsts steps necessary to reach those goals. In other words, the ideal fellowship candidate is not simply a joiner; she is instead a hard-working and creative leader, an agent of change who identifies a problem and then sets off finding its solution herself.
Finally—and this is why it appears last—a student’s grades should be your least concern when it comes to recommending that one of them apply for fellowships. It is true that many of these awards require a grade point average ranging from A- to A, but by themselves grades function mainly as a qualifier, and even if a student can boast an unblemished academic record, she won’t get very far in these competitions unless she can demonstrate the kind of intellectual or professional passion and commitment described above. On the other hand, if she has fashioned a goal for herself and is already working towards it, don’t hesitate to recommend her even if you’re worried that her academic record might not be impressive enough. The grade thresholds for fellowships are much more flexible than you may realize, and for the student who seems to you to possess the right stuff and no less than a 3.0 GPA, there will always be something at the Office of Distinguished Fellowships for which to apply and for which she’ll have a reasonable chance of winning.