Gifts versus Sponsored Projects
Procedure Date: February 2024
Revision: 1
Last Review: February 2024
Guidance on distinguishing gifts versus sponsored projects for external funding received by the University of ÁùºÏ±¦µä, Reno (the University).
Introduction
The University has established guidance for determining whether funding constitutes a gift or a sponsored project. Gifts and sponsored projects come in various forms, reflecting the diversity of donors, sponsors, and the intended purposes of the funds. The language used in the funding notification serves as a key factor in distinguishing between a sponsored project and a gift. However, there are cases where the wording alone may not be conclusive, making it challenging to determine the nature of the funds. This page is designed to assist individuals across the University in understanding the distinction between gifts and sponsored projects.
The University manages external funding in accordance with applicable laws and regulations and with the specific terms and conditions of any gift or sponsored project. The University’s approval, negotiation, accounting, budget practices, oversight, and compliance practices differ depending on whether funds received are categorized as a gift or as a sponsored project.
The determination process involves collaboration between Research & Innovation and the University of ÁùºÏ±¦µä, Reno Foundation (UNR Foundation), and any unresolved disagreements are addressed by the Vice President for Research and Innovation and the Vice President for Advancement – UNR Foundation. When uncertainty arises regarding the classification of funding as a gift or a sponsored award, individuals are encouraged to consult with Sponsored Projects – Research & Innovation.
I. Gifts
Definition of a Gift
A gift is the voluntary transfer of money or property (an item of value) made without consideration (excluding nominal value such as recognition or tax deduction) from a donor to the University for philanthropic use. A gift may come from various sources including, for example, a corporation, an individual, or a private foundation. A gift may not be directed to benefit a single individual or group of individuals. A gift may not include a defined scope, an expectation of an outcome, or period of performance. The donor has no expectation of any direct economic or other tangible benefit commensurate with the value of the gift and the donor does not have control over expenditure of the funds. However, a gift may or may not be restricted by the donor as to its use. A restricted gift is a contribution designated for a specific purpose, program, or project such as for infrastructure, scholarships or general research support. If the donor does not specify any restrictions, the gift is considered unrestricted and the University will allocate the funds at its own discretion.
While a donor may impose certain restrictions on the use or disposition of a gift and may request a report demonstrating compliance with their wishes, such terms do not transform the gift into a sponsored project. Restricted gifts create a fiduciary responsibility, obligating the University to fulfill the donor's wishes without an expectation of specific deliverables to the donor or sponsor. Some gifts may require a narrative progress report and a general (non-detailed) financial report.
Gifts may be associated with a donor's research or academic interests but are not intended to directly benefit the donor, except in promoting the donor's philanthropic interests. The donor receives no substantial value in exchange for the support provided.
All gifts must align with the University's mission, and conditions attached to gifts must not impede the University's decision-making autonomy in various areas, including admissions, appointments, research conduct, facility construction and use, curriculum development or financial aid. Additionally, gift conditions must not infringe on a faculty member's academic freedom in teaching, scholarship, research or practice.
Rights to any publications, copyrights, inventions or patents, intellectual property and equipment remain the sole property of the University.
The UNR Foundation administers all gifts for the University.
Funding from Governmental Agencies
The UNR Foundation is the 501(c)(3) non-profit recipient for all gifts from individuals, private (non-governmental) entities and governmental entities, including municipalities and tribal or sovereign nations. An example includes tribal contributions made under the ÁùºÏ±¦µä Tribal-State Gaming Compacts. For state agency funding, the default is for the University to serve as the applicant whenever possible.
The UNR Foundation does not accept funding that originates from U.S. federal funding agencies (e.g. NIH, NSF, DoD, USAID). These funds are accepted by Sponsored Projects.
The UNR Foundation accepts charitable funding from foreign entities, whether from public or private entities, provided the funds don’t originate from countries for which the UNR Foundation is not an authorized charity or from . In addition, Section 117 of the Higher Education Act of 1965, 20 U.S.C. § 1011f mandates financial transparency through required reporting of contracts with and gifts from a foreign source.
II. Sponsored Projects
Definition of a Sponsored Project
External support for University activities lacking specific features or characteristics outlined as a sponsored project will typically fall under the category of gifts.
Sponsored projects can come in various forms, including, but not limited to, grants, contracts and agreements, each imposing specific terms and conditions on the University. A sponsored project is an agreement between the University and an external entity, such as a private foundation, corporation or governmental agency formalizing the transfer of money or property from the sponsor for the intent to either carry out a specific activity, public purpose or provide outcomes that directly benefit the sponsor. Sponsored projects are enforceable by law, and specified objectives may be required to be completed within a specified time frame, with funding being subject to revocation. Most sponsored projects also include indirect costs.
The University applies federally negotiated Facilities & Administrative (F&A) costs to sponsored projects at the established rate, whether explicitly stated in the award or not. Exceptions to full cost recovery may be considered by the Vice President for Research and Innovation, following a careful evaluation of the proposed award.
Sponsored projects differ from gifts in that they involve commitments, and sponsors' interests are tied to the purpose and goals of the contract.
Specific reporting requirements, detailed scope of work and accounting of contract activity are provided to the sponsor throughout the project. While sponsors may define parameters, sponsored projects generally do not involve the assignment of intellectual property rights to the sponsor, and the University retains ownership of intellectual property arising from the project.
Sponsored projects often include detailed budgets, stipulations for graduate student or post-doctoral support, adherence to expense policies and specified timelines. Payment terms may vary, but payments are often tied to specific milestones for contracts, while gifts may involve partial payments paid in advance.
Definition of a Grant
A grant is a sponsored project funding award. It is the transfer of money or property from a sponsor to the University that may require performance of specific duties such as research, budget reports, progress reports and return of unused funds. Any funding provided by the U.S. federal government is treated as a grant.
Grants, often initiated by faculty, have broadly defined objectives and outcomes aligned with the sponsor's areas of interest.
Definition of a Contract
Contracts are considered a sponsored project and typically articulate a sponsor-defined scope of work, expecting a measurable work product or service within a specified schedule as a condition of payment.
Definition of a Cooperative Agreement
Cooperative agreements are considered a sponsored project and share the features of a grant, but also involve active sponsor participation in the undertaken activities.
III. Gift vs. Sponsored Project – Decision Making Process
Review funding documentation to determine if the funding should be considered a sponsored project or a gift.
Step 1: Assess Donor or Sponsor Type
- Determine if the donor or sponsor is the federal government.
- Determine if the donor or sponsor is a foreign government or primarily funded by a foreign government.
If the answer is “yes” to either or both items, the funding is a sponsored project. Contact spadmin@unr.edu for more information.
If “no” to all items, proceed to Step 2.
Step 2: Assess the Terms of the Agreement
- Determine if the donor or sponsor requires deliverables (e.g. equipment, records, detailed research results, study data).
- Determine if the donor or sponsor requests ownership of intellectual property (e.g. licenses, copyrights, royalties).
- Determine if the donor or sponsor requests the control of publications.
- Determine if the agreement has any questionable or unusual terms (e.g. indemnification, hold harmless, confidentiality, arbitration).
If the answer is “yes” to any or all of these items, the funding is a sponsored project. Contact spadmin@unr.edu for more information.
If “no” to all items, proceed to Step 3.
Step 3: Assess Award Reporting Requirements
In general, if a donor or sponsor requires detailed reporting, it should be managed as a sponsored project. Here are some examples of detailed reporting requirements:
- The donor or sponsor requires a detailed scope of work or line of inquiry.
- The donor or sponsor requires a detailed line-item budget (e.g., correspondence with proposal budget, percentage of effort committed by personnel, burn rate projections).
- The donor or sponsor indicates that future payments are contingent on reporting.
- The donor or sponsor requires a technical report with details on the scientific results or accomplishments.
In contrast, if a sponsor or donor only requires general reporting, it could be managed as a gift. Here are some examples of general reporting requirements:
- The donor or sponsor allows for a broad research focus.
- The donor or sponsor requests a general report on the disposition of funds (e.g., total spent on salaries, equipment, materials) or leaves the reporting preferences to the University of ÁùºÏ±¦µä, Reno to decide.
- The donor or sponsor does not require prior approval for a variance to the budget.
- The donor or sponsor does not indicate that future payments are contingent on reporting or spend.
- The donor or sponsor requests a general description of progress with no specific requirements or guidelines.
- The donor or sponsor does not stipulate an end date for performance.
If you have questions or would like additional guidance, please contact Sponsored Projects at spadmin@unr.edu.
IV. Important Considerations for Gifts and Sponsored Projects
| Category | Sponsored Project Grant | Sponsored Project Contract | Gift |
|---|---|---|---|
| Intellectual Property | The University owns the intellectual property but may include a license option to sponsor. | The University generally owns the intellectual property but sponsor may negotiate rights. | The University owns the intellectual property. |
| Publication Terms | The University generally retains full publication rights. Sponsor may request acknowledgment of support and advance copies of publications. | The University generally retains full publication rights. Sponsor may request acknowledgment of support and advance copies of publications. | The University retains full publication rights. |
| Scope of Work | Defined by researcher in the proposal. Usually required to be completed within a period of time and monitored by the grantor through progress reports. | Detailed scope of work defined by the researcher and/or sponsor. | Researcher conducts activities in alignment with grant. Gift may be unrestricted, or donor may restrict gift for a specific program area or purpose (e.g. library, research, scholarships). |
| Maximum Deliverable | Detailed technical report. | Detailed technical report and other deliverables (e.g., software, manuals). | Acknowledgment of receipt, report (if required) and tax receipt (if applicable). |
| Typical Payment Mechanism | Cost-based invoicing or fixed payment schedule. Advance payments, too. | Cost-based invoicing or fixed payment schedule. Advance payments, too. | Advance payment. |
| Documentation | Grant agreement stipulating payment, reporting, and other terms and conditions. | Formal contract stipulating payment, reporting, intellectual property rights, confidentiality, and liability terms. | Letter from donor identifying funding as gift or charitable contribution. |
| Facilities & Administration (F&A) Cost | Full F&A unless sponsor exceptions apply. | Full F&A unless sponsor exceptions apply. | The UNR Foundation may assess a nominal fee (e.g., 5%) to offset costs associated with the administration of a gift. |
V. Conflicts of Interest
All contributions must comply with the University’s Conflict of Interest Policy, UAM 2,050.
VI. Questions
Please contact giving@unr.edu or spadmin@unr.edu with questions regarding how funds should be accepted and administered.
VII. UNR Foundation Forms
Foundation Research Agreement – An agreement signed by recipient(s) of donation, unit head, gift funds steward and UNR Foundation personnel that specifies how the gift funds are to be used. For the University of ÁùºÏ±¦µä, Reno School of Medicine, agreements less than $1,000,000 must be reviewed and approved by UNR Med Legal Counsel prior to the Dean’s approval.
Gift Agreement Form – An agreement signed by the donor and the UNR Foundation.
Acknowledgements: This information was developed based upon guidance posted by Arizona State University, Harvard University, Metropolitan State University of Denver, New York University, Stanford University and Yale University.