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Policies

Administration & Finance

Policy Number: 703

Policy: Defining Responsibility for Receipt and Administration of External Funding for Sponsored Projects and Charitable Giving

Date Adopted: 07/04

Revision Date:

References:

Approved By: Robert A. Duringer, Vice President for Administration & Finance


With the variety of mechanisms by which funding for sponsored projects and corporate and foundation charitable giving are received, it can be unclear to those involved in soliciting these funds whether responsibility for the administration of the awarded funds should rest with The University of Montana or with The University of Montana Foundation. The purpose of this policy is to delineate the distinction between charitable giving (gifts) and external funding for sponsored projects (grants) and to outline where responsibility lies for the administration of funds based on the category to which the funds belong.

Definitions

A grant, contract, cooperative agreement, sub grant, subcontract, consortium agreement, purchase order, or memorandum of understanding (hereafter collectively referred to as "grant") is an agreement formalizing the transfer of money or property from a sponsor in exchange for specified services (e.g., research and development), and may require specific deliverables including financial and/or technical reporting by the recipient. The agreement is enforceable by law, and performance is usually to be accomplished within a specified time frame, with payment subject to revocation. It may include provisions related to intellectual property and publication rights. Entities awarding these funds are referred to as sponsors. Grants are received and administered by the Office of Research and Sponsored Programs (ORSP) of The University of Montana.

A gift or donation (hereafter referred to as "gift") is a voluntary and irrevocable transfer of money, services, or property (including equipment, intellectual property) from a donor without any expectation of or receipt of direct economic benefit or provision of goods and services from the recipient. Entities awarding these funds are referred to as donors. A gift implies no responsibility to provide the donor with a product, service, technical or scientific report(s), or intellectual property. Gifts are received and administered by The University of Montana Foundation.

Government entities are always sponsors. Private-sector entities (private foundations, corporate foundations, corporations, private agencies, professional associations) may be either donors or sponsors depending on the terms and conditions imposed on the funds. NOTE: The non-payment of facilities and administrative costs (also called indirect costs or overhead) is not a factor in determining whether the award is a grant or a gift.

Types of Awards Accepted and Administered by ORSP

The presence of any one of the following conditions shall designate the award as a grant, and its administration shall be the responsibility of ORSP.

  • The award is made by a governmental or quasi-governmental agency, or is from a private-sector sponsor that provides a subcontract or sub grant containing federal "flow down" provisions, i.e., federal, state or other governmental fiscal compliance policy governs the project.
  • The award is from a private-sector entity (including individuals) for the work of a specific faculty member(s), and requires the completion of programmatic objectives within a specific budget and time framework.
  • The sponsor places restrictions on publication of data resulting from the work. This could include requirements that the sponsor review manuscripts, talks, etc., prior to submission for publication or presentation, and possible delays in publication or presentation until project intellectual property can be protected.
  • The sponsor requests proprietary rights in data or inventions resulting from activities conducted under the agreement. This would include any reference to licensing options or arrangements for patents and/or copyrights developed during the work.
  • Studies are to be conducted on substances/processes/products, etc. owned by the sponsor.
  • The sponsor places restrictions on the use of funds and retains the right to revoke the award or to withhold payment for non-compliance. Examples of restrictions include the requirement for prior sponsor approval of deviation from originally approved budget items and disallowance of certain costs.
  • The sponsor requires regular financial reports on the use of the funds and/or status reports or detailed invoices.
  • The sponsor requires that any unused funds be returned.
  • The sponsor refuses payment, imposes penalties, and/or revokes the award for failure to meet the terms of the award.
  • The sponsor participated in determining the work to be performed or services to be provided on the project.
  • The sponsor hopes to gain economic benefit as a result of the work to be performed.
  • The award comes from a corporation's research and development budget and is perceived by the company as a "cost of doing business" rather than a charitable gift (the agreement terms and conditions should reflect this intent).
  • The sponsor includes a provision for audits by or on behalf of the funding source.

Solicitations for grants must be approved by ORSP prior to proposal submission. All grant agreements are negotiated by and awarded grants are administered by ORSP.

Types of Awards Accepted and Administered by The UM Foundation

The following are characteristics that usually designate funds as gifts to be managed by The University of Montana Foundation.

  • The award is made by a private individual, private foundation, corporate foundation, corporation, private agency, or professional association and does not include required programmatic or technical reporting, but may include financial reporting.
  • The award is from a non-government source and the donor specifically intends the award to be a charitable gift as reflected by the absence of any delivery of goods or services or direct economic benefit to the sponsor. Indirect benefits such as tax advantages or goodwill derived from the contribution are not sufficient to affect the gift intent.
  • The donor intends the gift to be irrevocable, relinquishing any right to reclaim the gift in its entirety or any unused portion or to invoke any penalties.

Solicitations for gifts must be approved by The UM Foundation prior to submission. Donated funds are managed by The University of Montana Foundation.

NOTE: While not a determinant of appropriate designation as a grant or gift, ANY activity involving the use of human subjects, laboratory animals, radioactive materials, recombinant DNA/RNA, biohazards, or other research risks must obtain the proper prior approvals from the appropriate university office.

Resolution of Special Cases

For projects that do not fit into any of the above categories, the Vice President for Research (or designee), the President of The UM Foundation (or designee), and the proposed project director will, in consultation with both organizations' fiscal managers (or designees) and the Director of Internal Audit (or designee), determine the most appropriate means of receiving and administering the funds. Unresolved cases will be referred to the President for final decision.

Coordination of Effort

When university faculty and staff members contact ORSP for assistance with proposals to non-governmental entities, ORSP staff will determine if the proposed project should be submitted by The University of Montana or The University of Montana Foundation. If the proposed project clearly falls within the purview of The UM Foundation, the faculty or staff member will be directed to the Foundation for assistance in proposal preparation and submission. Similarly, when university faculty and staff members contact The UM Foundation for assistance with proposals to non-governmental entities, Foundation staff will determine if the proposed project should be submitted by The University of Montana or The University of Montana Foundation. If the proposed project clearly falls within the purview of The University of Montana, the faculty or staff member will be directed to ORSP for assistance in proposal preparation and submission.

Order of Precedence

The definitions of terms in this policy take precedence over any terms used by the funding source. 

No Procedures Available

Administration & Finance

The University of Montana-Missoula

University Hall 126

406.243.4676 / fax: 406.243.5537

Carol.Buerman@umontana.edu