Distinguishing Gifts from Sponsored Awards Policy

This Policy for Distinguishing Gifts from Sponsored Awards (“Policy”) applies to staff that administer or negotiate Gifts or Sponsored Awards and all other faculty, staff, students, or any other individuals who seek or receive external funding through their affiliation with the University. See Section IV below for the definition of all capitalized terms in this Policy.

The University must manage all external funds in accordance with all applicable federal, state and local laws and regulations, as well as with the specific terms and conditions of any Gift or Sponsored Award. While both Gifts and Sponsored Awards (usually in the form of a grant agreement or contract) are often awarded in response to a proposal with a specific work plan or activity, the mechanisms used to manage these respective types of funds differ greatly, and are primarily determined by the requirements of the Donor or Sponsor. Consequently, it is important to properly classify such awards.

The purpose of this Policy is to provide a framework to facilitate the appropriate classification of private support received by the University as either a gift or a sponsored award. This categorization is essential for ensuring that the appropriate office or department manages the funding in a manner consistent with such classification and for ensuring that it is treated correctly for tax and accounting purposes.

The distinction between a Gift and a Sponsored Award is not always immediately apparent therefore this Policy seeks to provide guidance to the University community on the appropriate categorization of funds as set forth below.

A Gift is a donation of money or property from a Donor (individual or organization) that is not contingent on specific deliverables, results, or activities. As long as the general interest of a Donor is met, funds may be spent at the discretion of the University unless there are specific restrictions on the gift.  The University has a fiduciary obligation to use a Gift in accordance with the wishes of the Donor. Gifts may come from the private sector (such as individuals and businesses), or nongovernmental sources. All funds that originate with government agencies must be classified as Sponsored Awards.

Gifts can be categorized as either “restricted” or “unrestricted”.  An unrestricted Gift may be spent at the discretion of the University. It is not limited to specific purposes, objectives, programs, or designated to specific organizational units.  A Gift is considered unrestricted if a Donor does not specify how funds are to be used. A restricted Gift is earmarked for a specific purpose, objective, program, or organizational unit.  However, a Donor does not have control over expenditures or the work performed.

Gifts may be used to meet the cost sharing commitment on a Sponsored Project if the purpose of the Gift allows it.

Gifts are under the administration of the Division of University Advancement (“UA”).

The above criteria are to be used as guidance only and each case must be considered on an individual basis.

A Sponsored Award is the provision of money from a Sponsor to support specific activities including, but not limited to, research, service, or training projects such as development or testing of a product or designing a training program.

Sponsored Awards typically require an application or proposal in which the Principal Investigator (PI) or applicant details the work to be done and the budget for the Sponsored Project.  Sponsored Awards may come from federal, state, local or international governments and agencies, non-government organizations, non-profit organizations, private foundations, or the private sector (including individuals). 

Although Sponsored Awards do not typically seek specific outcomes, they do typically include reporting and accounting requirements in addition to requiring acknowledgement in presentations and publications.

All Sponsored Awards are under the administration of the Office of Sponsored Research and Programs (OSRP) and Financial and Administrative Services.

The above criteria and the chart below are to be used as a guidance only.  Distinguishing a gift from a sponsored award must be considered for each case on an individual basis.

If an award does not align sufficiently with the criteria for either a Gift or a Sponsored Award, consult the OSRP who will work in conjunction with the UA to determine the appropriate categorization of the funds. If a consensus cannot be reached between these parties, the funds, along with the respective determinations of the relevant parties, will be forwarded to the Vice President for Finance or his/her designee for the final determination. 

Donor: the individual or organization that gives a Gift.

Gift: includes external funds provided by an individual or organization that is not contingent on a specific activity (e.g. research) or deliverable (good or service) to be provided or completed as a condition of the funding. This includes but is not limited to unrestricted donations from estates, alumni, and foundations as well as restricted gifts given to support a specific activity or project on campus (such as scholarships, building facilities, or academic programs).

Principal Investigator: is the individual designated by the University to have the appropriate level of authority and responsibility to direct the Sponsored Project.

Sponsor: the organization or funding agency that funds a Sponsored Award.

Sponsored Award: includes all arrangements and agreements that are contingent on a specific activity (e.g. research) or deliverable (good or service) to be provided or completed as a condition of the funding. This includes but is not limited to grants, research agreements, sponsored service, testing and training agreements, contracts and fellowships.

Sponsored Project: an externally funded activity in which a formal written agreement such as, a grant, award, sub-award agreement, cooperative agreement, contract, or fellowship is executed between the University and the Sponsor.

University: Arcadia University, its colleges, schools, affiliates, divisions, and subsidiaries.

This Policy shall be effective on the date that it is approved.

May 17, 2017