D. Is it a Gift or a Grant?
   January 1989

Development Policy and Administration Manual 
Chapter III. Gift Administration Policy 
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                     IS IT A GIFT OR A PRIVATE GRANT?


In the past, the State Auditor General concluded that in many
cases monies awarded to the University that should have been
classified as private grants were classified as gifts.

To clarify this situation and to insure greater consistency among
campuses, the guidelines provided below were promulgated by
President Saxon in July 1980.  Since in many situations all of
the following characteristics will not be present, judgment must
be exercised in order to classify the support.  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 charac-
teristic or criterion.  Rather, one must look at the award in
toto in order to make a judgment as to its proper classification.


Gifts.  In general, classify funds as gifts when the following
characteristics exist:

     -    the intention is to make a charitable contribution;
     
     -    the donor does not impose contractual requirements;

     -    funds are awarded irrevocably.


Private grants.  In general, classify funds as grants when the
following characteristics exist:

     -    there is provision for audits by or on behalf of the
          grantor;

     -    the grantor is entitled to receive some consideration
          such as a detailed technical report of research results
          or a report of expenditures;

     -    testing or evaluating of proprietary products is
          involved;

     -    the research is directed to satisfying specific grantor
          requirements (e.g., terms and conditions stating a
          precise scope of work to be done rather than a general
          area of research);

     -    a specified period of performance is prescribed or
          termination is at the discretion of the grantor;

     -    funds that are unexpended at end of period shall be
          returned to the grantor;

     -    patent or licensing rights are requested by the
          grantor.


Regardless of the designation of an award for research as a gift
or as a private grant, it will be subject to the research review
process as well as to the administrative rules and procedures
that apply to all University Funds.  The processing of gifts will
not include the application of indirect costs, although some
campuses do assess a minimal fee on gifts.  Processing of private
grants will include the application of indirect costs in accor-
dance with University policy.*

Gifts are accepted under the Delegation of Authority--To Solicit
and Accept Gifts, March 24, 1986.  Private grants are accepted
under the Delegation of Authority--To Solicit and Accept or
Execute Certain Extramural Grants and Contracts, March 29, 1988. 
Organization of the processing, acceptance, and administration of
gift and grant funds is a campus matter -- these guidelines are
not intended to indicate whether processing of private support
occurs in the Contract and Grants Office or the Development
Office.  All gifts and private grants, however, are to be
reported to Development Policy and Administration, Office of the
President.  Private grants should also be reported to Research
Administration (formerly know as Contracts and Grants), Senior
Vice President -- Administration; i.e., private grants should be
reported to both offices.


Reference:  Presidential Policy on Review of Gifts/Grants 
   for Research, July 8, 1980.

* Research Administration, Senior Vice President--Administration 
should be contacted for advice on indirect cost charges.