1304 Distinguishing Between Gifts and Sponsored Awards (Grants and Contracts)

Policy Sections

1304.1 Distinguishing Between a Gift and a Sponsored Award

This policy defines non-federal Sponsored Awards (Grants and Contracts), as distinguished from Gifts, and provides guidance related to making these distinctions. This policy applies to all Yale units and individuals involved in soliciting, receiving, and processing agreements that may be classified as a Sponsored Award (Grant or Contract) or a Gift. This policy applies to Gifts and Sponsored Awards from private foundations or corporations and does not apply to federal Grants and Contracts.  Federal grants will always include a Catalog of Federal Domestic Assistance (“CFDA”) number that identifies the funding with a certain program.  Federal Contracts will include Federal Acquisition Regulations (“FAR”) terms or, if received from the Department of Defense, may include specialized terms listed in the DFAR (Department of Defense FAR terms).

Yale University receives various forms of support from outside entities to help advance its missions.  This support may be categorized as a Gift or a Sponsored Award (Grant or Contract).  The determination of this classification can generally be made by Yale units and individuals based on attributes that are specific to the Terms and Conditions that accompany each funding mechanism.  At times, however, the appropriate determination may require a review from central offices, led by the Gift and Sponsored Award Action Committee (“GSAAC”), and, if necessary, escalated to University Major Deals.

The purpose of this policy is to assist Yale individuals and units in distinguishing between Gifts and Sponsored Awards (Grants or Contracts).  The classification of funding as a Gift or Sponsored Award (Grant or Contract) may affect, among other things, the way Yale accounts for the funds, calculates and applies facilities and administrative (“F&A”) costs, reports on the use of the funds to the sponsor or donor, and ensures proper compliance, including but not limited to: reporting on agreed upon deliverables and/or milestones; donor stewardship; and treatment of any potential confidential information or intellectual property.

The University must manage all funds received in accordance with applicable federal, state, and local laws, and with the specific Terms and Conditions of any Gift, Grant, or Contract.  The University’s approval, negotiation, and agreement processes and mechanisms, accounting, budget practices, oversight, and compliance practices differ depending on whether funds received are categorized as a Gift or as a Sponsored Award.  It is, therefore, essential that categorization of external funding received be undertaken with utmost care and with a sound understanding of the various considerations (outlined below) that drive the determination of funding type. This policy is intended to facilitate the appropriate classification of Gifts vs. Sponsored Awards and to ensure that external funding directed to the University receives the proper compliance review, administrative oversight, and monitoring.

Gift

A voluntary transfer of property (item of value) made without consideration (excluding nominal value such as recognition or tax deduction).  A Gift does not directly benefit a donor (e.g., the donor receives no or nominal value [recognition or tax deduction]) except insofar as the Gift promotes the donor’s personal philanthropic interests in exchange for the support provided. A Gift may or may not be restricted as to its use.  Most Gifts to Yale are unconditional. Gifts may come from various sources, including corporations, individuals, or private foundations.

Terms and Conditions

Agency-specific requirements. Award recipients must comply with the Terms and Conditions as outlined in the award document. Gift documents typically do not specify periods of performance and do not stipulate that the recipient must agree to specific terms as a condition of accepting the funds.

Sponsored Award (Grant or Contract)

Funding from an external entity such as a private foundation, corporation, or governmental agency for an activity with a defined scope and purpose undertaken by the University with the expectation of an outcome that directly benefits the public and/or the provider.  Sponsored Awards (Grants or Contracts) bind the University to a set of specific Terms and Conditions and involve a related reciprocal transfer of something of value to the sponsor.

• Grant (subcategory of Sponsored Award): An award of financial assistance, the principal purpose of which is to transfer something of value (money, property, services, etc.) from a sponsor to a recipient (“Grantee”) to carry out a public purpose of support or stimulation, usually philanthropic in nature. A grant sponsor may retain the right of return of the funds or a release from obligation to provide further funding. A grant may be issued by a non-federal sponsor (such as foundations, corporations, and societies). Grants tend to be more flexible than contracts. Some Grants may involve substantial involvement by the sponsoring party and may be referenced as ‘Cooperative Awards or Agreements.’
• Contract (subcategory of Sponsored Award): An agreement to provide research or research services under specified negotiated conditions, including the scope of work, deliverables, timelines, budget, and compliance requirements in exchange for something of value (money, property, services, etc.). Contracts typically include more complex terms and describe specific scopes of work.

Gifts and Sponsored Awards (Grants or Contracts) are made to the University in a variety of forms, reflecting the diversity of donors/sponsors as well as their purposes.  The determination of an agreement as a Gift or a Sponsored Award depends on the interpretation of the language in the sponsor/donor document.  It is important to note that the determination of whether Yale accepts funding as a Grant, Gift, or Contract is NOT dependent upon the designation by the sponsor.  Sponsors may deem an award a Gift but include Terms and Conditions that dictate that Yale process the award as a Grant or Contract.

Determinations of whether an award is considered a Gift or a Sponsored Award (Grant or Contract) should be made by Yale units and individuals based on attributes specific to the Terms and Conditions that accompany each funding mechanism, the detailed criteria in this policy and as described in Procedure 1304 PR.02 Distinguishing Between Gifts and Sponsored Awards.

Sometimes, the wording of the award document makes it difficult to determine whether the award represents a Sponsored Award (Grant or Contract) or a Gift. If additional assistance or consultation in the determination if an award is a Gift or Sponsored Award is needed, the Gift and Sponsored Award Action Committee (“GSAAC”) should be contacted. This Committee can provide guidance and/or make the final determination. In special or complex cases, the decision may be escalated to University Major Deals.

Gifts are processed by the Office of Development. Sponsored Awards (Grants or Contracts) are processed by the Office of Sponsored Projects.

If the Gift and Sponsored Award Action Committee cannot reach a consensus on determination of award category, the case will be escalated to the Major Deals Group, if time permits, or to the appropriate leadership (Provost or Dean) pending stringent time constraints.  Furthermore, all awards of over $1M will be reviewed by the Major Deals Group.

Certain funding sources may present unique considerations that are not generally covered by the decision matrix in Procedure 1304 PR.02 Distinguishing Between Gifts and Sponsored Awards.  Examples of such instances include sponsorships and conditional Gifts (i.e., a contribution with a stipulation that includes both a barrier that must be overcome before Yale is entitled to the assets and the right of return of the contribution).  Refer such instances to the Gift and Sponsored Award Action Committee for a determination of award category.  For conditional Gifts, the Gift and Sponsored Award Action Committee also consults the Conditional Gifts Committee.

Departmental Business Office (or designee)

• Support faculty and departments in the preparation of award applications including budgets, application of overhead, etc.
• Support faculty by reviewing this Policy and engaging the Gift and Sponsored Award Action Committee to ensure that the application and/or resulting award are processed through the appropriate office.

Gift and Sponsored Award Action Committee (“GSAAC”)

• Supports faculty and departments when input on award determination and/or specific Terms and Conditions is needed.
• Reviews awards and award applications, when assistance is requested, and advises on whether awards or potential awards should be processed as Gifts, Grants, or Contracts.

Office of Development and Alumni Affairs

• Solicits, records, and manages/stewards all Gifts on behalf of the University.
• Reviews awards in partnership with Office of Sponsored Projects and Office of General Counsel to determine if the award meets the criteria of a Gift.

Office of General Counsel

• Advises on legal matters related to the University’s research activities including sponsored Grants and Contracts, collaborations with corporations and research institutions, and the donation of equipment or software.
• Advises on legal matters related to the University’s intellectual property rights and assets, including copyrights, patents, and trademarks.
• Advises on the legal aspects of accepting Gifts.
• Advises on the use of Gifts to ensure they are administered in accordance with donor terms and restrictions.

Office of Sponsored Projects

• Provides assistance to faculty and staff in obtaining and managing Sponsored Awards (Grant or Contract) that support scholarly activities.
• Reviews awards in partnership with the Office of Development and Office of General Counsel to determine if the award meets the criteria of a Grant or Contract.

Yale Ventures IP and Licensing

•  Advise on issues and matters where Yale intellectual property rights may be licensed to third parties.
• Support faculty and departments where award terms have implications on potential intellectual property and opportunities for future commercialization.

Major Deals Group

• Supports faculty and departments to assess and provide guidance on complex non-federal awards and/or non-federal awards over $1M.
• Reviews non-federal awards when the Gift and Sponsored Award Action Committee refers an award for a decision.