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Fort Lewis College Official Seal

Policy identification number: SPON-004

File: Other Operational Policies / Sponsored Research & Federal Relations

Gift or Grant Determination

Policy Summary

This policy shall clarify the difference between funds raised as gifts, donations, or pledges or those raised as grants or contracts to: 1) ensure proper financial recording and reporting of gifts vs grants and 2) determine whether funds received from off-campus sources should be administered by the Office of Institutional Advancement or by the Office of Sponsored Research and Federal Relations. The classification of external funding as either a gift or grant serves as an important step in ensuring that the appropriate accounting and compliance action is used.

Policy Owner

Provost and Vice President for Academic Affairs 

Approval Date

November 2, 2016

Effective Date

November 2, 2016

Search Terms

pvpaa, vpia, g, gift, grant

Scheduled for Review

Fall 2020

I.  Policy Statement

The classification of funds originating from a source external to Fort Lewis College is made based on the terms and conditions under which the funds are given by the funding source (sponsor).  

The chart below shows the general characteristics of and differences between the two funding categories of gifts and grants.  Please note that in some cases it may not be readily apparent if the award is a gift or a grant.  In these cases the Office of Sponsored Research and Federal Relations, in conjunction with the Office of Institutional Advancement, will review the documentation and decide which classification is most appropriate. 

 

Guide to Determining if the Award is a Gift/Donation/Pledge or a Grant/Contract

 

Gift/Donation/Pledge

Grant/Contract

Benefit received by funder from activities funded

Serves philanthropic or personal interest of funder, but does not serve the primary business purpose of the funder;

No benefit received other than recognition and disposition of the gift in accordance with the donor’s wishes

Serves the primary business or mission interest of the funder, whose basic activities are integrally related to the research plan;

Benefit received

Specificity of intent of funder

Funder seeks advances in a general area of research or education; or seeks advances in a specific area, but without prescribing specific strategies or work plans

Funder seeks implementation of a specific research or education plan, with well-defined objectives, strategies, work plans and/or deliverables

Deliverables and Right to Audit Spending

Do not have a specific scope of work with milestones and deliverables, other than intellectual satisfaction that the activities have been undertaken;

No deliverables provided, but may be accompanied by restrictions on use of funds

Funder expects and receives implementation of, and a report of, the College’s funded activities; ability to audit records; funder’s own mission and/or research agenda is advanced through the College’s funded activities;

Deliverables provided

Scope of work

More generally defined; typically no time frame or period of performance

More specifically defined with a clear period of performance.

Persons performing funded activities

Often left to the discretion of the College, school, department or one named individual

Key personnel (or the equivalent project leadership team) are named in proposal, and changes to key personnel must be pre-approved by funder

Budget specificity and restrictions

Budgeting is general in nature and terms, as funds are used for the stated purpose

Budgets are specific, and variances from proposed budgets (within designated parameters) require funder pre-approval

Progress reports

May be required but are most often general in nature and content

Required, and must outline progress toward the specific research or project plan

Terms of funding

Less detailed

Often detailed, with standard, detailed terms and conditions for all funding from that sponsor

Accountability for use of funds

More moral than legal

More legal than moral

Ability of funder to recoup funds

Generally very difficult to recoup, except in cases of deliberate, proven use of restricted funds inconsistent with terms of a restricted gift

Established ability of funder to terminate the agreement and/or demand repayment of funds, if specific research or project plans have not been implemented

Method of documentation

Letter of intent of funder in making award

Binding (often signed) agreement between the College and funder, binding the College to implement specific research or project plans

II. Reason for Policy 

The College must manage all funds received in accordance with applicable federal, state, and local laws, and with the specific terms and conditions of any gift, grant, or contract.  The college’s approval, negotiation, and agreement processes and mechanisms, accounting, budget practices, oversight, and compliance practices differ depending on whether funds received are categorized as a gift or a grant.  There are very clear factors that differentiate a gift from a grant.  It is essential that the categorization of external funding received be done with care, consistency, and with a sound understanding of the various considerations (outlined in the table above) that drive the determination of funding type.  This policy is intended to facilitate the appropriate classification of gifts vs grants and to ensure that external funding for the College receives the proper compliance review, administrative oversight, and monitoring. 

III. Responsibilities 

For following the policy: All individuals, departments or programs soliciting external funding for College purposes

For enforcement of the policy: The Vice President for Institutional Advancement, the Director of the Office of Sponsored Research and Federal Relations, and the Controller

For oversight of the policy: The Provost and Vice President for Academic Affairs and the Vice President for Institutional Advancement  

For notification of policy: Policy Librarian

For procedures implementing the policy: The Vice President for Institutional Advancement and the Director of Sponsored Research and Federal Relations

IV.  Definitions 

Gift: A contribution that is donative in intent, given voluntarily and with nothing significant of value given in return, other than recognition and disposition of the gift in accordance with the donor's wishes.

Grant/Contract: An externally funded activity where there is an agreement representing transfer of money or property in exchange for specific services, often including deliverables and specific reporting requirements.

V..Procedures

Sponsored Research and Federal Relations: 

VI. Cross-Referenced Policies

Coordination of Private Fundraising

VII. Consequences for Non-Compliance  

Potential allegations of misappropriations of funds and associated fines for federal and state dollars, federal and state fines for lack of compliance, jail time for the individual offender, if a federal grant, loss of funding.