Gifts vs. Sponsored Awards

Last Updated: May 29, 2024 2:23:47 PM PDT

Learn about the differences between the classifications of sponsored funded projects as Gifts versus Sponsored Awards, including key determining factors.

Overview

The decision as to whether a particular award should be classified as a gift or sponsored award cannot be made based upon the presence or absence of a single characteristic or criterion. Rather, one must look at conditions of 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 the Office of Contract and Grant Administration (OCGA) and Advancement Services to carefully evaluate all the conditions and determine the classification of a gift vs. sponsored award.

Regardless of whether an award is designated as a gift or a sponsored award, the following administrative rules and procedures apply to all University funds.

Definitions

· Gifts: Voluntary contributions made to the University that are motivated by a Funder’s charitable intent, for which the Funder receives no substantial return benefit and over which the Funder does not retain control.

· Sponsored Awards: All arrangements in which the University is providing a return benefit, or agrees to provide a defined deliverable to the Funder or to complete a set of activities in exchange for Support (e.g., grant, contract, materials transfer agreement, etc.). While Sponsored Awards are typically made to support research, it is possible that Support for a purpose other than research may be classified as a Sponsored Award.

General Indicators for Sponsored Awards

In general, Sponsored Awards may have the following characteristics:

· The funded activity is directed to satisfying specific Funder requirements (e.g., terms and conditions originating from the Funder stating a precise scope of work to be conducted rather than a general area of research).

· The Funder requires specific reporting, such as a detailed technical report of research results and/or a line-item report of expenditures.

· Funding is from a U.S. state or local government agency or foreign government.

· A specified period of performance is prescribed by the Funder.

· The Funder requires unexpended Support be returned to the Funder at the end of the specified period.

Determinative Indicators for Sponsored Awards

Support must always be classified as a Sponsored Award when the following characteristics exist:

· Support is from the United States federal government;

· Testing or evaluating of proprietary materials (including software) provided by, or on behalf of the Funder, is involved; or

· University intellectual property rights are given to the Funder, and/or the Funder directs the dissemination and/or management of University results, including intellectual property.

General Indicators for Gifts

In general, Gifts may have the following characteristics:

· Support is motivated by charitable intent.

· The Funder provides Support to the University without expectation of direct economic or other substantial return benefit.

· Support is for an endowment or a capital project.

· Support is awarded irrevocably. While the area of work to be supported may be specified by the Funder, the University retains control of usage of the funds.

Indirect Costs

The funder or sponsor’s intent on paying or not paying indirect costs is not a determinative factor in the classification of a gift versus sponsored award.

Classification of Gifts and Sponsored Research Awards

General Indicators

	Gifts	Sponsored Award
Funder	Support could be provided by an individual or an entity that is not the Federal Government.	Funder could be a foreign or U.S. Federal, state, or local government, private or other entity that is not an individual.
Research Focus/Scope of Work	Broad research focus. Support is intended for endowment. Support is intended for capital projects.	Detailed scope of work required.
Persons Performing Funded Activities	Left to discretion of University, school, department or one or more named individuals.	Key personnel named in the proposal and changes must be pre-approved by the Funder.
Budget	General project/budget or no specific budget. No prior approval required for variance from proposed budget.	Detailed line item budget (e.g., detailing project costs by budget categories, listing personnel percentage of effort, etc.). Requires Support to be spent in accordance with the proposed/approved budget, or requires prior approval for re-budgeting in excess of an established threshold.
Period of Performance	Not specified, at the discretion of UC.	Project start and end dates specified by the Funder.
Financial Terms and Reporting	Stewardship and general fiscal accountability and reporting to the Funder. No terms and conditions for the disposition of tangible property.	Detailed financial reporting (e.g. line item detail, percentages of effort, etc.). Terms and conditions for the disposition of tangible property (e.g., equipment, records, technical reports, theses, dissertations, or other deliverables). Future payments/Support contingent on programmatic and fiscal reporting and/or progress. Unexpended Support to be returned at the end of a designated period of performance, and/or Funder has the ability to terminate the agreement and/or demand repayment if the University doesn’t meet its obligation.
Narrative Reporting	General description of progress, few or no specific requirements/guidelines.	Technical report requires details on scientific results or accomplishments and progress towards a specific project plan.

Policies

The University must exercise judgment and appropriate analysis in order to classify a gift vs. sponsored research projects. Following are related references.

· UCOP Classification of Gifts and Sponsored Awards Policy

· UC San Diego PPM 150-35

· UCOP Development Policies and Reference Guide

· UC San Diego Gift Acceptance and Processing Online Handbook (PDF)

· UC San Diego Gift Processing Policies

For more information, contact researchadmin@ucsd.edu.