GIM 34 – Classification of External Support as Either a Sponsored Program or as a Gift

Contents

Purpose and Background
University Policy

Roles & Responsibilities

Related Resources

Purpose

External support is anything of economic value provided by a third party (either the 鈥渟ponsor鈥� in the case of sponsored programs or the 鈥渄onor鈥� in the case of gifts) as a gift or a sponsored program to the 糖心原创 (UW), the UW Foundation, or the UW鈥檚 affiliate entities.

External support may be awarded under a variety of labels, including gifts (restricted and unrestricted), grants, contracts, cooperative agreements, subawards, funded and unfunded collaboration agreements, master agreements, clinical trial agreements, corporate affiliate partnership programs, and other similar mechanisms.

This GIM describes the policies and standards used by the UW for classifying external support as either a sponsored program or a gift by all University campuses, colleges, schools, departments, and administrative units (benefiting units). Correct classification of external support assures the University鈥檚 ability to: (i) comply with requirements specified by the sponsor or donor; (ii) satisfy State of Washington reporting requirements; (iii) properly recover its costs, both direct and indirect; (iv) comply with the Government Accounting Standards Board (), Financial Accounting Standards Board (FASB), Internal Revenue Service (IRS), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (), and other financial reporting standards, and (v) comply with applicable laws, regulations and University policies.

Not Covered

This GIM does not describe the policies and processes related to other types of funding to the University, such as revenue, , or departmental revenue from the sale of goods and services. For more information, see and other resources.

Background

As a governmental unit with a nonprofit foundation, the University must determine whether external funding is a sponsored program or a gift in order to properly spend, track, report, and account for it.

University Policy

External support is given to the University, the UW Foundation, and the UW鈥檚 affiliate entities. As a public institution, and in accordance with state law, external support may not be offered to any University employee, officer, student, or agent for the individual鈥檚 personal use or for use by any other person or entity. Documentation stating the purpose and terms associated with the funding, award letter, or notification, and the proposal, if applicable, are required before any gift or sponsored program may be accepted and expended.

Occasionally, a single funder may seek to provide concurrent funding in the form of a gift and a sponsored program. Each type of external support must be reviewed independently and, if acceptable, processed separately.

Classification of external support is based on information conveyed to the University by the funder and the benefiting unit after applying relevant legal and accounting principles. Resources are available to the benefiting unit to help make a preliminary determination whether funding is a or a sponsored program, or other revenue source.

Classification of External Support as a Sponsored Program

A sponsored program is a transaction between the University and the sponsor in which the sponsor supports a specific scope of work carried out by the University for organized research, instruction, or other sponsored activity in exchange for something of value such as data, results, intellectual property rights, and/or technical reporting.

Sponsors may provide funding, equipment, or other tangible items, such as goods or services, as a form of support. The sponsored program is memorialized in formal documentation between the University and the sponsor, typically as a grant, contract, cooperative agreement, incoming subaward, or award letter.

Sponsored programs typically include a scope of work and one or more of the following:

  • Budget information and payment terms tied to receipt of reports or other milestones
  • A requirement for technical reporting
  • Risk management, such as liability, indemnification, insurance or other contractual terms that establish acceptance of risk by the parties
  • Project Intellectual property (IP) ownership and related rights, consistent with GIM 40

The Office of Sponsored Programs reviews and processes sponsored program proposals and awards. When external support is determined to be a sponsored program, it must be routed to OSP via an eGC1.

Classification of External Support as a Gift

A gift is the contribution of external support to the University without any requirement for receipt of economic or other tangible benefit beyond what any member of the public would receive.

Gifts to the University are accepted by University Advancement according to . Determination is based on the charitable intent of the funder to ensure all gifts accepted by the University will help further and fulfill its mission, priorities, and values and comply with IRS regulations and state and federal law.

UW Advancement reviews and processes gifts for the 糖心原创, the UW Foundation, and the UW鈥檚 affiliates and agencies. External support that is determined to be a gift must be processed through .

Gifts may be either unrestricted or restricted. An unrestricted gift may be used for any purpose or project. A restricted gift is for a particular purpose or project as stipulated by the donor.

In general, a gift has the following attributes:

  • Given for general activities such as endowments, capital projects, student financial support, or programmatic support
  • Irrevocable, provided the gift is used in accordance with any mutually agreed upon, valid restrictions
  • No donor-imposed time limits, though a general expectation of timing may be stated
  • The beneficiary of the supported endeavor is the general public, although the donor might receive de minimis benefits such as recognition and stewardship

Gifts cannot include:

  • Requirements for receipt of goods, services, or other deliverables.
  • Pledge payments contingent on outcomes or reaching milestones.
  • Detailed financial accountability (donors may request information about the impact of their support and a summary of expenditures).
  • Deliverables or benefits beyond that of reasonable recognition and stewardship (i.e., no quid pro quo).
  • Transfer of UW intellectual property, ownership, or related rights (In appropriate circumstances, the UW may agree to open-source software or intellectual property developed with gift funds.)
  • Any contractual provision that imposes financial or legal obligations, or transfers external risks and liabilities to the University.
  • Restrictions on publication of research results.
  • Requirement that if personnel working on the project leave or change, the funding is returned to the donor.
  • Requirement that support be refunded if the project fails to meet performance requirements or project objectives.

Considerations for External Support

  • Past treatment of external support from a funder should not be a determining factor in the classification of new funding. Each new transaction should be viewed independently.
  • Inclusion or exemption of facilities and administrative (F&A) costs and/or gift assessments shall not be a basis for determining whether an award is classified as a sponsored program or gift.
  • If external support can only be given to a 501(c)(3) organization but the award terms classify funding as a sponsored program, the Office of Corporate & Foundation Relations will work with the Office of Sponsored Programs before accepting an award to the UW Foundation.
  • If the 鈥渓ast to touch鈥� funder (pass-through entities or previous touch points are not considered) is a US or foreign government agency, the funding is generally not treated as a gift.
  • A gift may be used as a match or for cost sharing in support of a sponsored program unless otherwise restricted by the donor or sponsor. In such instances, the gift funds may become held as restricted funds.
  • All regulatory requirements with respect to the conduct of research must be followed even when funded by a gift, including but not limited to Institutional Review Board for the Protection of Human Subjects, Institutional Animal Care and Use, Radiation Safety, Biosafety, and Disclosure of Significant Financial Interests. Review the Gift-Funded Research: Compliance Checklist
  • University Advancement may approve鈥痩anguage and/or provide defined mutual understandings to mitigate the acceptance of risk as a condition of receiving external support.
  • In certain cases, Gift Services may process external support as a Proviso Gift 鈥� a current-use charitable contribution to the 糖心原创 that advances and supports the University鈥檚 mission and may include administrative stewardship but does not provide economic or tangible benefit to the funder.

Roles and Responsibilities

Campus/Investigators

Make an initial determination on whether the funding is a sponsored program or charitable gift based on funder intent.

Review guidance to help make a determination:

Based on the review, route funding documentation to the appropriate office for review.

Office of Sponsored / Gift Services

Gift Services or the Office of Sponsored Programs will evaluate the funding agreement and/or supporting documentation to help determine whether the funding should be classified as a gift or a sponsored program. Either office may recommend that the benefiting unit consider additional review, which may require additional documentation or conversations. If it is still unclear what type of agreement is appropriate, Gift Services and the Office of Sponsored Programs will collaborate to make the final decision about the appropriate classification of support.

Related Resources

Change Notes

Details on changes to this GIM are available from the Office of Sponsored Programs, osp@uw.edu