Fayetteville Policies and Procedures 227.0
Determining Philanthropic Gifts versus Sponsored Grants
The University of Arkansas frequently and regularly receives funding from a variety of sources including but not limited to: governmental sources; corporations; family and corporate foundations; individuals; trusts and estates; and professional associations. The following guidelines are designed to help ensure proper acceptance and processing of non-governmental funds received by the university, subject to all other applicable University policies.
Proper determination of whether incoming funds are philanthropic gifts or sponsored grants is necessary to ensure the university’s compliance with applicable federal, state and local laws, and with the specific terms and conditions of any gift or grant. The applicable approval and acceptance procedures, as well as the accounting, financial recording and reporting, oversight, and compliance or stewardship practices vary depending on the classification whether funds are a gift or a grant. To ensure proper administration of funds received, various considerations must be reviewed to determine the type of funding and the appropriate repository.
These guidelines are subject to UA Systemwide Policies and Procedures 380.1, Gifts vs. Grants or Other Sponsored Awards Link.
Philanthropic gifts are voluntary, non-reciprocal transfers of money or property from a donor to an institution. The donor may be an individual, a foundation, a trust or estate, a corporation, or another non-profit organization. The donor does not expect to receive anything of value in return and ceases control of the gift, though the donor may restrict the use of the gift to meet their philanthropic goals. A restricted gift is a contribution designated for a specific purpose or program. If a donor does not specify any restrictions, the institution may allocate the funds at its own discretion for its mission and its tax-exempt purposes.
Whether in aggregate or in detail, reporting is solely intended to assure proper gift stewardship. As allowed by IRS regulations (publication 526), insubstantial benefits or token items are not considered a return benefit to the donor.
Sponsored grants are given to the university in order to meet specific objectives in a program plan, which may include providing deliverables such as data, technical reports, intellectual property, or training. Sponsored awards may involve an application or proposal; a statement of work or research plan; consequences for nonperformance; the return of unexpended funds at the end of the project period; and fiscal accountability and reporting beyond those required as part of good stewardship. The sponsor transfers money, property, services or anything of value to the university in order to accomplish the grant objectives. The exercise of control over the direction, oversight, or administration of the funds after the making of an award is another attribute of a sponsored award.
In general, philanthropic gifts are typically initiated by a member of the Division of Advancement team. Sponsored grants are typically initiated by individual principal investigators. Please note the use of the term “grant” is a term that is often used interchangeably among corporations and foundations offering assistance to the university, regardless of whether the funding is a philanthropic gift or a sponsored grant. The word “grant” should not be the sole determining factor in assessing the proper processing of private support through the Division of Advancement or the Office of Research Administration (ORA). The gift versus grant distinction is based on the nature of the proposal, statement of work, and/or other terms of the agreement. The following questions help to determine whether the funding is a sponsored grant or philanthropic gift.
Sponsored Grant: Grant proposals are submitted through and require the approval of the Office of Research Administration (ORA). Additionally, activities funded via research contracts and cooperative agreements will generally be considered sponsored projects.
Philanthropic Gift: Gift proposals are developed and submitted in collaboration with, and require the approval of, the Division of Advancement. (See Policies and Procedures 203.0.)
Determination of the classification of external support as a philanthropic gift or sponsored grant is made by Division of Advancement leadership in consultation with Office of Research Administration leadership.
Classification of external support is an internal university administrative decision, based on information conveyed to the university by the support source and the university operating unit, after applying above listed factors simultaneously. If, after reviewing these factors, administrators are unable to classify an award, administrators should forward all relevant documentation to the Award Determination Appeal Review Committee consisting of the provost, the vice chancellor for Research and Innovation, the vice chancellor for Finance and Administration, and the vice chancellor for Advancement. The appeal review committee will make a determination on classification, in consultation with legal counsel, if necessary. If the committee is unable to reach a conclusion, the Chancellor has final authority to make the decision. Documentation supporting the classification should be maintained in the permanent file in the Division of Advancement for philanthropic gifts or ORA for sponsored grants.
I. External Support and Facilities and Administrative (F&A) Costs
The inclusion, exemption or limitation of F&A costs shall not be a basis for determining whether an award is classified as a sponsored project or gift. Documentation stating the purpose and terms associated with a specific award, the award letter or notification and the proposal are required before any gift or sponsored project may be accepted and expended.
II. Processing and Reporting
Once the question of gift or grant is determined, the funds should be directed along with all relevant documentation to either Advancement Services or ORA. To ensure compliance with established financial procedures, awards assigned as gifts, proposals, gift agreements and checks are to be directed for receipt and acceptance to the University of Arkansas Foundation, Inc. (the UA Foundation), unless the donor has expressed a clear and specific preference that the gift be held by the university instead of the UA Foundation, or the gift is otherwise unable to be processed by the UA Foundation due to a clerical error or omission. For awards that are determined to be grants, request for funding and checks are to be directed to ORA/University of Arkansas.
All gifts and grants are to be processed in a timely manner and directed to the correct office consistent with the university’s cash handling policy, Fayetteville Policies and Procedures 306.0, as well as ensuring donors and/or grantors are properly acknowledged for their commitment to the university.
In consideration of national standards of fundraising, grants from private entities are included in annual Division of Advancement counting reporting regardless of where the funds are administered.
III. Transfer of Gifts from University of Arkansas Foundation Account to University of Arkansas Restricted Account
A proposal initially prepared and classified as a gift that subsequently is found to contain disqualifying terms and conditions relating to the use of the support may require reclassification of the support as a sponsored project and the external funding will be transferred to ORA for review and processing. The inclusion or limitation of F&A costs in the proposals will also be reviewed.
IV. Reporting from ORA to Division of Advancement
Office of Research Administration will share with the Division of Advancement information about sponsored grants from private, non-governmental entities being administered by ORA to the extent necessary to allow for appropriate and coordinated stewardship or recognition of the funding party, and if applicable, for purposes of counting the funding in compliance with national standards in fundraising.
V. Reporting from the Division of Advancement to ORA
The Division of Advancement will share information about gifts from industries, corporations, and foundations with ORA to allow for appropriate entry into the research administration system, for purposes of management and reporting of sponsored program funding.
|
Source |
Type |
Office to Deposit Funds |
Counting |
|
Individual |
Gift |
Advancement |
Advancement |
|
Federal government |
Grant |
ORA |
ORA |
|
State government |
Grant |
ORA |
ORA |
|
Local government |
Grant |
ORA |
ORA |
|
Foundation, industry, other |
Non-specific grant/gift |
|
|
|
Foundation, industry, other |
Sponsored award or specific grant |
ORA |
Both |
|
Industry, other |
Contract |
ORA |
ORA |
VI. Counting by Both the Division of Advancement and ORA
Specific gifts and grants are those external funding agreements in which a specific university faculty or staff member, or team of university faculty and staff, have been funded to perform a specific task. Specific gifts and grants may be considered for counting by both the Division of Advancement and ORA. Counting documentation will be maintained by both offices.
Non-specific gifts and grants are those external funding agreements in which specific university employees are not identified. These agreements typically identify the university, a college, a department or a program that should receive the funds to further the unit. The non-specific funder (“donor”) may restrict the funds for a specific purpose or leave it as non-restricted. Non-specific gifts/grants are handled and counted by the Division of Advancement.
Revised April 27, 2026
December 9, 2015