Faculty receive extramural support for their research, training and public service projects through two principal mechanisms: sponsored projects and gifts. Extramural sponsors and donors provide these funds to the University, relying on the expertise of University personnel to properly classify them. Proper classification ensures good stewardship and maximizes the benefits that can accrue to both sponsor/donor and the University. The following guidelines should be followed in categorizing gifts and sponsored project funds.
Sponsored Project Criteria
A sponsored project is a transaction in which there is a specified statement of work with a related, reciprocal transfer of something of value. A sponsored project may support University activities including but not limited to research, training, instruction, public service and construction. Any funding provided by U.S. government agencies, at the federal, state, or local level is treated as sponsored project funding. Funding from voluntary health organizations or associations, such as the American Heart Association or the American Cancer Society, is usually treated as a sponsored project.
In remaining cases, for example where funding is being provided by corporations, foundations or others not specified above, the distinction between gifts and sponsored projects will be made based on the proposal, statement of work, and terms of the agreement, taking into consideration the intent of the donor/sponsor. If the "intent" does not correspond with criteria for classification as a gift or grant, the terms of the agreement should be adjusted in order to avoid unintended classification and to accurately reflect donor/sponsor intent.
Sponsored project proposals should be submitted to external sponsors via the Office for Sponsored Research (OSR), which serves as the authorized signatory authority for the University. Proposals and subsequent awards will be considered sponsored projects if any of the following criteria are met, regardless of whether the proposal was submitted through OSR:
- A formal or informal proposal has been submitted to a sponsor binding the University to a specific line of scholarly or scientific inquiry (e.g. a project).
- A formal or informal proposal has been submitted to a sponsor that carries institutional endorsement for one of the following purposes:
- to assure the sponsor that the University will adhere to requirements or guidelines promulgated by the sponsor,
- to offer or guarantee adherence to University obligations associated with the proposed activity, e.g., a budget, specific period of performance, cost-sharing or matching requirements, specific commitments of personnel effort, agreement to terms under which funding will be accepted, etc.
- The award document specifies an end date for the use of the funds or the terms under which an award may be terminated in advance of all funds being expended.
- The award document specifies deliverables such as technical, financial, invention, or procurement reports, milestones, or timetables.
- The award specifies other terms and conditions or property requirements. Included in this category are requirements imposed by the sponsor for the disposition of tangible and intangible property that results from the project, including equipment, records, technical reports, theses and dissertations, data, copyrights, and/or inventions.
- The award document specifies fiduciary responsibilities such as:
- adherence to a line item budget,
- delineation of costs into direct costs and facilities and administrative (F&A) costs,
- audit of the project by the sponsor or a third party,
- payment contingent upon satisfactory programmatic progress, and
- return of unexpended funds at the conclusion of the project or guidelines regarding the transfer of funds from one period of time to another.
Sponsored projects are subject to facilities and administrative costs (F&A) at the University's published rate applicable to the type of project being conducted. If the sponsor has a written policy, uniformly applied, prohibiting or restricting the payment of F&A to a lower rate, the University may permit the funds to be accepted in accordance with the sponsor's policy. This exception does not apply to for-profit sponsors, who are expected to provide full F&A when funding sponsored projects. The Office of the Vice President for Research is the final authority responsible for determining the acceptance of the F&A rate in all cases.
An exception to the classification as sponsored project criteria above will be made in circumstances where there are foundation grants to the University for specific program support that is not organized research, as defined in numbers 1 (proposal binding the University to a specific line of inquiry) and 6 (fiduciary responsibilities such as a line item budget) above, but supports institutional purposes such as scholarships, will be expended within the same fiscal year period as the grant is intended, and, in which the dollar amount is less than $100,000. In these cases, the grant will be reported and managed for accounting purposes as a gift. Stewardship of the grant will be assigned to the Office of Foundation Relations.
A gift is defined as any item of value given to the University by a donor who expects nothing significant of value in return, other than recognition and disposition of the gift in accordance with the donor's wishes. In general, the following characteristics describe a gift:
- No contractual requirements are imposed and there are no "deliverables" to the donor. However, the gift may be accompanied by an agreement that outlines its intended use. For example, gifts may be provided to support a department, an individual faculty member's laboratory, or a construction project.
- Gifts are irrevocable and must be used for the intended purpose. While the gift may be intended for use within a certain timeframe, there is no specified "period of performance" or "start/stop" date.
- There is no formal fiscal accountability to the donor beyond periodic progress reports and summary reports of expenditures. These reports may be thought of as requirements of good stewardship, and, as such, may be required by the terms of a gift. They are not characterized as contractual obligations or "deliverables."
Gift solicitations should be coordinated with the appropriate development officer in each school or unit, and Alumni Relations and Development should be contacted for procedures applicable to gift solicitations. This is governed by established University policy.
The Office of the Controller, the Office for Sponsored Research, and units within Alumni Relations and Development (e.g., Office of Foundation Relations, Office of Corporation Engagement) make a joint determination if there is a question about whether external funding should be treated as a sponsored project or a gift.
For assistance, call OSR at (847) 491-3003 in Evanston or (312) 503-7955 in Chicago.