Gifts vs. Grants (Sponsored Projects): How We Classify External Funding

Cal Poly Pomona receives external support through both gifts and grants/contracts (sponsored projects). Correct classification ensures funds are accepted and managed appropriately and that the University complies with sponsor/donor requirements.

Classification is based on the terms and expectations in the award document—not the sponsor’s label.

What Is a Gift?

 A gift is a voluntary contribution provided to support the University, with no enforceable performance obligations.

A gift may be restricted to a general purpose (e.g., scholarships, equipment, or support for a program or area of research), but it typically does not include a defined scope of work with required outcomes.

Gifts are accepted and administered through University Advancement.

Common gift characteristics

• No defined scope of work or project plan required by the sponsor

• No milestones or deliverables tied to performance

• No requirement to return unspent funds

• No publication/IP/confidentiality/data rights terms

• Any updates requested are typically stewardship-style (brief narrative updates, recognition)

What Is a Grant or Contract (Sponsored Project)?

A grant or contract is external funding provided to support a defined project or activity with specific expectations.  Proposals for grants or contracts are prepared in collaboration with the Office of Research & Sponsored Programs (ORSP), and they are administered through CPP Foundation Grants and Contracts.

Common grant/contract characteristics

• A defined scope of work or project plan

• Required deliverables, milestones, and/or outcomes

• Technical and/or financial reporting requirements

• A defined project period with performance deadlines

• Return of unspent funds may be required

• Terms related to intellectual property, publications, confidentiality, or data rights may apply

• Indirect costs (F&A) are assessed when applicable 

Gray Area Guidance: Organizations That Provide Both Gifts and Grants

Some foundations and corporations provide both gifts and grants and may use the terms inconsistently. Classification depends on the terms of the award, not the sponsor’s label.

A restricted gift may specify how funds must be used (e.g., scholarships, equipment, or support for a general research area). Restrictions on use of funds alone do not make an award a grant.

Funding is typically a grant/sponsored project when it includes:

• A defined scope of work or required outcomes

• Performance-based deliverables or technical reporting

• A specific project period with deadlines

• Return of unspent funds

• Sponsor approval of scope or budget changes

• Intellectual property, publication, confidentiality, or data rights terms

Rule of thumb:

If the sponsor can require repayment or claim nonperformance for failure to complete defined activities, the funding is likely a grant.

If uncertain, ORSP and University Advancement will review the award jointly before acceptance.