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Is this a Gift or a Grant?

Characteristics

Gifts

Grants/Contracts/Agreements

Applicability of Terms and Conditions Given without expectation of exchange of benefit; no quid pro quo Sponsor defines terms such as confidentiality, publication, copyright, patent rights, liability, insurance, regulations, allowable costs, etc.
Restrictions Minor/none Funding is targeted for a specific objective
Scope of Work (SOW) Broad or general intent Specific SOW defined by the sponsor and PI
Deliverables No May include services, products, progress reports, milestones, technical or financial reports
Right to Audit Expenses No Yes
Period of Performance No Defined in award/agreement
Return of Funds No, Irrevocable Defined in award/agreement
Subject to Indirect Costs No Yes

Background

External support may be awarded under a wide variety of labels or mechanisms, including grants, contracts, subcontracts, purchase orders, funded collaboration agreements, master agreements, clinical trial agreements, consulting agreements, testing agreements, service agreements, task agreements, basic ordering agreements, corporate affiliate partnership programs, and other similar mechanisms.

Correct classification of external support determines the proper classification of external support by all University campuses, colleges, schools, departments, and administrative units, and assures the University’s ability to: (i) comply with requirements specified by the sponsor or donor; (ii) satisfy State of Georgia reporting requirements; (iii) properly recover its costs, both direct and indirect; (iv) comply with Government Accounting Standards (GASB) and Financial Accounting Standards Board (FASB), Internal Revenue Service (IRS) and other financial reporting standards, and (v) assure compliance with applicable laws, regulations and University policies.

The Governmental Accounting Standards Board (GASB) establishes generally accepted accounting principles (GAAP) for state and local governments. The Financial Accounting Standards Board (FASB) sets financial accounting standards for nongovernmental entities. The standards for both vary due to the organizational differences between government and nongovernmental entities. As a governmental unit, with a nonprofit Foundation established, the University must determine external funding as a sponsored project or a gift in order to properly spend, track, report, and account for external funding. Likewise, determination of the funding is necessary due to accounting and reporting standards for sponsored project funding, including the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Chapter I, Chapter II, Part 200, Uniform Guidance).

All regulatory requirements with respect to the conduct of research and other compliance matters must be followed regardless of whether the support is processed as a sponsored project or a gift, including but not limited to, Institutional Review Board for the Protection of Human Subjects, Institutional Animal Care and Use, Biosafety, and Financial Conflict of Interest.

What is the difference between a grant and a contract?


DEFINITION OF WHAT IS (AND WHAT IS NOT) A SPONSORED PROGRAM

GENERAL DEFINITION: “Sponsored programs” refers to scholarly, professional, and creative activities that personnel conduct with support from external funding instruments such as grants, contracts, cooperative agreements, or other agreements.

SPECIFIC DEFINITIONS: A. In addition to the general definition above, any one of the following conditions is sufficient to define a sponsored program:

Conditions Concerning the Nature of the Agreement/Activity

  1. A formal proposal exists requiring the endorsement of an authorized official.
  2. Progress, technical, final reports, and/or other exchanges are required. The proposed activity binds the university to a specific delivery of work including service to a sponsor.
  3. The activity has a specified performance period or completion date.
  4. The agreement for the activity contains compliance terms and conditions.
  5. The agreement for the activity contains provisions for confidentiality.
  6. The testing/evaluating of proprietary products is involved.

Conditions Concerning Financial/Institutional Involvement

  1. Initial pricing, expenditures, financial reporting, and/or performance may be subject to external audit.
  2. Billing, separate accounting procedures, and/or report of expenditures are required.
  3. Reimbursement/payment is contingent on completion of specified exchanges.
  4. Unexpended funds must be returned to the sponsor at the end of the activity.
  5. Cost sharing/cash matching is involved in the performance of the activity.
  6. The activity includes budgeted indirect costs.
  7. The activity involves disposition of property, whether tangible or intangible, that may result from the activity (e.g., equipment, inventions, copyrights, or rights in data).

A sponsored program is NOT:

  1. A voluntary donation — i.e., the donation transmittal information does not include any of the conditions defining a sponsored program.
  2. A voluntary donation of funds given irrevocably.
  3. A voluntary donation of personal property (e.g., cash, securities, books, equipment) provided by a donor without expectation of tangible or economic (except tax) benefit.
  4. The transfer of property with no implied responsibility on the part of the university or the foundation to provide the donor a product, service, technical or scientific report, intellectual property rights, or any other exchanges.
  5. Donations of real estate.
  6. Funds received directly by a faculty member (e.g., summer fellowships or travel grants).
  7. A project conducted as an external professional activity for pay.
  8. Honoraria — funds given directly to a faculty member by agreement not requiring administrative endorsement.
  9. Testing and service agreements processed through re-charge centers having an established fee for service.
  10. Teaching and professional services provided by university personnel to the public at large on a fee-for-service basis which do not meet any conditions for a sponsored program.
  11. Non-technical services to external organizations (e.g., lodging and food service to groups on campus; meeting facilities; sporting events).
  12. Fellowships and/or scholarships without a service component or other restrictions.

What is an External Sale?

An external sale is a transaction involving a transfer of funds from a third party to the University, meeting the criteria set below:

A. The funds are in exchange for:

    1. services performed by the University and any tangible goods produced as a result of such services;
    2. use of laboratory equipment; or
    3. a license to use information on University maintained databases.

B. The transaction is not considered a gift or sponsored project, nor an excluded transaction such as room and board; instruction or tuition; academic services; retail food, beverage and catering services; admission to University sporting and other events; license for rights of a University patent, trademark or copyright; use, sale or transfer of University property, equipment, fixtures or supplies; delivery of health care services to individuals; delivery of veterinary services; other similar services; and

C. The transaction is consistent with the scope and criteria set forth by the Georgia Board of Regents Policy Manual.

Professional Sales and Service Agreements

Professional Sales and Service Agreements are for routine, regularly performed standardized work without significant interpretative analysis or creation of new knowledge. Federal funds may be accepted under Sales and Service Agreements if payment is for standardized work provided by an established service center with published rates for services.

Examples of these types of agreements include:

  • Sales and Service Agreement
  • Purchase Order
  • Auxiliary Enterprise Revenue
  • Service Centers
  • Recharge Centers

A product or service is considered professional sales and service if:

  • The product or service is associated with a core University mission
  • It is offered to multiple external clients on a recurring basis
  • The product or service is a by-product of the operation of a sponsored or instructional program
  • Payment basis is per unit or per service
  • Satisfactory facilities for product or service do not exist elsewhere (single source)
  • It is non-competing/must not charge less than total cost.

Distinguishing Sales & Service from Sponsored Activity

The following distinctions are illustrative only but may be helpful in providing general guidance of when an activity is a sponsored program:

Comparison

Sales and Service

Sponsored Program

Note:  If federal funds or federal pass through funds are involved, always route to ORSSP for review.
AOR Signature Never requires institutional signature; if required, route to ORSSP to review Usually requires Authorized Organizational Representative (AOR) signature on behalf of institution.
Award Mechanism Never accomplished via cost-reimbursable award mechanism Accomplished via specified award mechanism (e.g., fixed price or cost-reimbursable agreements)
CFDA, Cost Match, F&A, or FAR Clauses Never cites a CFDA number, cost match, an MOU/MOA, F&A, or FAR clauses May involve cost match, F&A recovery, cite FAR clauses, or an MOU/MOA
Commercially Available Sale of products or services (e.g., printing/photocopy, laboratory analysis) that could be commercially purchased; price determined by established fixed-fee schedules; data belongs to purchaser Specific deliverables are expected per sponsor terms and conditions; collaborator relationship exists (e.g., joint publication expectations)
Income Activities generate net income, usually from an aggregate per service/unit sale Activities typically do not generate net income
Indemnification /Hold Harmless Indemnification/hold harmless language is never included; if included, route to ORSSP to review Indemnification/hold harmless language may be included in terms
Intellectual Property (IP) Activity never includes intellectual property (IP) concerns Activity may include IP concerns
Purchaser Provides Samples Samples (or content/material) generally provided by Purchaser Researcher may collect samples (or provide content/material)
Purchaser Requests Services Activity typically originates when Purchaser requests services Activity usually originates when a proposal is submitted to sponsor
Reporting Requirements Reporting requirements (e.g., financial, time & effort, etc.) or federal assurances never required Reporting required (e.g., financial, time & effort, etc.)
Research Compliance Never involves securing of research compliance approvals (IRB, IACUC, IBC, etc.) Regulatory research compliance approvals may be required
Scholarly expertise/ Oversight Activities generally do not require any intellectual interpretation or scholarly expertise, nor principal investigator oversight and involvement; if included, route to ORSSP to review Activities require specific intellectual interpretation or scholarly expertise, and principal investigator oversight and involvement
Venue/Law/ Insurance Choice of venue/choice of law or insurance requirements are never included; if included, route to ORSSP to review Choice of venue/choice of law or insurance requirements may be included in terms and conditions

Last updated: 5/21/2020