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Gift vs. Grant: CPP Definitions

It is always helpful to develop a better understanding of the funding classification as a gift, a grant or a contract, particularly when received from a non-profit entity such as a foundation, corporate foundation, private organization, or corporation. The guidelines here are intended to assist the campus community with appropriate criteria to determine the classification of the external support. The correct classification is important to enable the university to comply with the terms and condition, if any, specified by the donor or sponsor and also meet the state reporting requirements, properly recovering the CPP's costs such as direct and indirect, monitor the project and report the results as required by funding organization.

A table outlining the various aspects for consideration in determining the classification is included here for further clarity.

If the nature of the award is not immediately clear, it is advised, all components of information related to the gift/sponsored project should be reviewed by appropriate participants internally, this may include administrative leadership, development representatives, such as the Director of Corporate Relations (CR), and the Director of the Office of Research and Sponsored Programs (ORSP). This collaborative review will help determine the final classification.

Definitions

A gift is the voluntary solicited or unsolicited, non-reciprocal transfer of money or property from
a donor to an institution. The donor may be an individual, a corporation or a non-profit
organization. The donor does not expect anything of value in return other than recognition and
does not have control over expenditure. A gift may meet the interests of the donor and can be
restricted or unrestricted.

A restricted gift is a contribution designated for a specific purpose, program or project. If the
donor does not specify any restrictions, the gift is unrestricted and the institution allocates the
funds at its own discretion. Only the Advancement Division may accept gifts on behalf of the
University.

grant (also known as sponsored program funding, award) is the transfer of money or property
from a sponsor to an institution that may require performance of specific duties such as research,
financial (budget) reports, narrative progress reports, and return of unused funds.

Any funding provided by U.S. Government agencies, at the federal, state, or local level, in
support of the California State Polytechnic University at Pomona activities is treated as a grant. Government
funds are not treated as gifts; the payments are generally based on cost-reimbursement.

The terms on the use of funds are restricted by the budget, the goals and other deliverables approved by the sponsor.

The third category is a Contract.  A contract is a legal document for a fixed amount of transfer of funds for specific deliverables by an agreed upon deadline. The terms and conditions are formal contractual obligations. The sponsor will typically place restrictions on expenditures and the funding is based on cost-reimbursement.  Periodic progress reports, ownership rights to intellectual property, formal reports etc. are some of the typical deliverables.

The table below outlines some of the factors for consideration to distinguish between gifts and grants. The presence of any single factor does not represent the condition of gift or grant. To determine if the transfer of funds is a gift or a grant, all of these factors should be considered simultaneously. In cases where there is a question as to whether an activity for which external funding is sought constitutes a grant or a gift please consult with the Director of ORSP or the Director of Corporate Relations in Office of Advancement.

Gift vs Grant - Factors to Consider