Policy Information

Date Established: 11/20/2017
Date Last Updated:
Category:
Research
Responsible Office:
Vice President for Research and Economic Development
Philanthropy and Alumni Engagement
Responsible Executive:
Vice President for Research and Economic Development
Vice President for Philanthropy and Alumni Engagement

Policy Contents

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Distinguishing Between Gifts and Sponsored Activities

Summary

This policy provides guidance to facilitate the appropriate classification of gifts and sponsored activity.

Policy Statement

The University at Buffalo (UB, university) receives funding, including gifts and awards that support a sponsored activity, from sources outside the university. Proper classification of external funding as a gift or sponsored activity is required to determine the appropriate accounting and compliance treatment.

Gifts

A gift is any item of value given to the university by a donor who expects nothing of significant 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:

  • Gifts may be accompanied by an agreement that restricts the use of the funds to a particular purpose; beyond that, no contractual requirements are imposed (beyond the requirements of responsible stewardship) and there are no deliverables to the donor, e.g., no rights to tangible or intellectual property.
  • A gift is typically irrevocable. While the gift may be intended for use within a certain time frame, there is usually no specified period of performance or start/stop dates as are typically associated with sponsored projects.
  • 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.

Sponsored Activity

Sponsored activities are established when funds are awarded to the university by external sources in support of research, instruction, training, or services under an agreement that includes any of the following:

  • A set of terms and conditions that binds the university and requires endorsement
  • An obligation by the investigator to a line of scholarly or scientific inquiry that typically follows a plan, provides for orderly testing or evaluation, or seeks to meet stated performance goals
  • An understanding of how funds will be used (typically includes a detailed budget that identifies expenses by activity, function, or project period)
  • A requirement for fiscal accountability as evidenced by the submission of financial reports to the sponsor, an audit provision, or the return of unexpended funds at the conclusion of the project (if the contract type is cost reimbursement)
  • An obligation to report project results
  • Disposition of tangible or intangible property resulting from the project (examples of tangible property include equipment, records, technical reports, theses, or dissertations; intangible property includes rights in data, copyrights, or inventions)
  • An imposition of legal or financial considerations (e.g., indemnification, warranty)

How To Distinguish - Gift and Sponsored Activity Attributes

Specific attributes can assist in the identification and classification of gifts and sponsored activities.

Gift Attributes Sponsored Activity Attributes
Has a charitable intent and only generally obligates the university Binds the university to a specific set of terms and conditions
Typically processed and accepted by the UB Foundation, though is some cases this may be done by the university (Controller) Administered and approved by the Office of Sponsored Projects Services
Generally irrevocable Revocable by either party due to failure to perform
Donors include individuals, alumni, foundations, or companies only, and never federal, state, or local government agencies Sponsors include governmental agencies as well as private companies and foundations
Supports a purpose that is restricted by a donor or the university itself Obligates the investigator to a line of scientific, scholarly, or public service inquiry that follows a plan, scope of work, or protocol
Designates a department, school, the university, and/or campus constituent as recipient Designates the investigator as project technical expert
Can be used to fund general university activities and such specific activities as scholarships or capital projects limited only by the amount of the contribution Establishes an understanding of how funds will be used or includes a detailed, itemized budget that identifies expenses by activity, function, or project period
Does not include indirect costs Can include indirect costs
Does not require the funder’s prior approval of any expenditures Can require prior written approval of certain expenditures by the sponsor
Requires only minimum fiscal accountability and reporting to the donor in the form of a general statement of how the funds were used Requires fiscal accountability as evidenced by the submission of financial reports to the sponsor, an audit provision, or the return of unexpended funds at the conclusion of the project
Includes no specific deliverables and only minimal requirements generally relating to required donor pledge payments and the university’s commitment to effectuate the donor’s intent Includes specific deliverables and obligates the investigator to report project results or convey rights to tangible or intangible properties resulting from the project
Usually requires no further obligations or legal restrictions on the part of the university Seeks considerations such as indemnification or imposes other terms that require legal accountability
Payments may be contingent upon a donor’s approval or satisfaction of the use of the proceeds of the gift, or other non-technical criteria Payments are contingent upon programmatic or fiscal reporting that take the form of milestone payments, periodic invoices, or installment payments

Decision-Making in Unclear Situations

When the appropriate categorization of external funds received is uncertain, Sponsored Projects Services (SPS), UB Foundation, and/or university officials must consult with the Committee to Determine Gifts or Sponsored Awards before making a determination of gift or sponsored activity.

In cases of lingering uncertainty or dispute about the appropriate categorization of external funds received, the Provost and the Vice President for Finance and Administration (VPFA) will consult and reach a final determination.

The payment or nonpayment of indirect costs is not a factor in determining whether the funding is a gift or sponsored activity.

Background

Gifts and sponsored awards to the university are made in a variety of forms, reflecting the diversity of donors and sponsors as well as the range of their intents, institutional purposes, and the nature of the projects themselves. The university manages all funds received in accordance with applicable federal, state, and local laws, and with the specific terms and conditions of a gift or sponsored activity (i.e., grant, cooperative agreement, or contract). University approval, oversight, and compliance practices differ depending on whether funds received are determined to be a gift or a sponsored activity.

Applicability

This policy applies to all external funds received by the university classified as a gift or a sponsored activity.

Definitions

Committee to Determine Gifts or Sponsored Awards

Reviews and determines the appropriate categorization of external funds received (i.e., gift or a sponsored activity). The committee includes members from the Offices of the Vice President for Philanthropy and Alumni Engagement; Vice President for Research and Economic Development; and Vice President for Finance and Administration.

Gift

The voluntary, non-reciprocal transfer of money or property from a funder/donor to the university. The funder/donor may be an individual, corporation, or non-profit organization. Other than an expectation that the university will use the gift for its intended purpose, the funder/donor does not expect anything of value in return besides recognition, and does not have control over expenditures. A gift may meet the interests of the donor and can be restricted or unrestricted. Gifts may be made to UB anonymously. 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 UB may allocate the funds at its own discretion.    

Sponsored Activity

Any externally funded research, training, evaluative testing, or public service project directed by UB faculty or staff as part of their university work that requires the university to perform a specified program or deliver a specified product during a specified period of performance. The proposed work requires a specific line of scholarly inquiry such as a work statement, testing of a hypothesis, a model project, or a defined set of deliverables. Deliverables may include programmatic, technical, and detailed financial reports during or at the conclusion of the project. Sponsored activity funding cannot be made to UB anonymously; the sponsor/funder must always be identified.  

Sponsored Award

The funding mechanism, usually a grant, cooperative agreement, or contract, used to support a sponsored activity. A sponsored award generally contains expressed terms and conditions governing how the funds are to be administered.

Responsibility

Principal Investigator

  • Seek clarification from university officials to determine if external funding is a gift or a sponsored activity, preferably at the time of application for funding, but no later than before the funding agreement is formally accepted by UB.
  • Manage the activity as a gift or a sponsored project, in accordance with appropriate UB Foundation or SPS policies and procedures.

Committee to Determine Gifts or Sponsored Awards

  • Review and determine the appropriate categorization of external funds received, i.e., gift or sponsored activity.
  • Refer the decision of appropriate categorization of external funds received to the Provost and VPFA if unable to make a determination.
  • Communicate the decision to the principal investigator/project director and the cognizant dean or vice president.

Provost and Vice President for Finance and Administration

  • Consult and make a final determination regarding the appropriate categorization of external funds received in cases of lingering uncertainty or dispute.

Sponsored Projects Services (Research Foundation for the State University of New York)

  • Manage sponsored activities for the university.
  • Ensure appropriate compliance and reporting of sponsored activity.

University at Buffalo Foundation

  • Accept and process gifts received by the university.
  • Ensure that donor intent of philanthropic funds is met.

Corporate and Foundation Relations

  • Submit proposals and required reporting on behalf of principal investigators in accordance with policy.
  • Conduct supplemental stewardship, as appropriate

Contact Information

Vice President for Research and Economic Development
516 Capen Hall
Buffalo, NY  14260
Phone:  716-645-3321

Vice President for Philanthropy and Alumni Engagement
503 Capen Hall
Buffalo, NY  14260
Phone:  716-645-2925

Office of Sponsored Projects Services
The UB Commons
520 Lee Entrance, Suite 211
North Campus
Amherst,  NY 14228
Phone:  716-645-2634
Fax:  716-645-2760
Email:  SponsoredProjectsServices@buffalo.edu
http://www.buffalo.edu/research/about-us/units/sps.html

University at Buffalo Foundation
Center for Tomorrow, Box 900
Buffalo, NY  14260
Phone:  716-645-3013

Related Information

University Links

Presidential Approval

Signed by President Satish K. Tripathi

Satish K. Tripathi, President

11/20/2017

Date