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Gifts vs. Grants

Find out how to determine if an award should be considered a gift or a grant.

The University must exercise judgment in order to classify the gift vs. grant/contract in accordance with the intent of UC policy.

Policies

The decision as to whether a particular award should be considered a gift cannot be made based upon the presence or absence of a single characteristic or criterion. Rather, one must look at the award as a whole in order to make a judgment as to its proper classification. At UC San Diego, close collaboration is regularly practiced between OCGA and Advancement Services to determine the classification of a gift vs. grant/contract.

Regardless of whether an award is designated as a gift or a grant/contract, it will be subject to the research review process as well as to the administrative rules and procedures which apply to all University funds. A Grant/Contract is subject to indirect costs, whereas a Gift is subject to the assessment of a campus gift fee.

Definitions

Gift: A contribution that is donative in intent, given voluntarily and without expectation of consideration.

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.

Note: If any of the characteristics of a grant/contract are present then the sponsor/donor award must be processed as a grant or contract.

  Gifts Grants/ Contracts
Defining Characteristics Gifts are irrevocable and the funder does not have any right to reclaim funds for any reason Typically, not always, have a period of performance and termination rights. May include the right to audit how the funds were spent. May also require return of unexpended funds at the end of a performance period.
Applicability of Terms and Conditions Gifts are given without the expectation of any return benefit, and contain virtually no contract/grant terms and conditions. The sponsor stipulates terms relevant to one or more of the following: confidentiality, publication, copyright, patent rights, liability, insurance, regulations, allowable costs, subcontracting or any other type of contractual term. This also includes the testing or evaluating of proprietary products.
Scope of work limitations Gifts can have a broad general intent but do not contain a specific scope of work. The funding is intended to support specific University personnel salaries in order to accomplish the specific scope of work; including the testing or evaluation of proprietary products.
Deliverables and Right to Audit Spending Do not have a specific scope of work with milestones and deliverables nor a Right to Audit Spending. Terms or expectations of the Grantor include: the ability to audit records; may include reporting of work progress and specific milestones; and detailed technical report of research results.
Period of Performance None Specified period of performance is prescribed, or termination is at the discretion of the Sponsor.
Return of Funds Not allowed. Unexpended funds may be required to be returned at the end of the stated period of performance.