Introduction 2 – External Funding – Sponsored Program or Gift?


The appropriate processing of funds from external sources is essential to guarantee that the intentions of the funding source are properly observed.

Description of Offices Involved

The Office of Sponsored Programs and the Office of Contracts and Grants have primary administrative responsibility over activities that will result in or that concern the development and subsequent administration of contracts, grants, or other agreements for external funding of University sponsored research activities. When funds are received in support of a sponsored research activity, there should be either a proposal which has been processed through the Office of Sponsored Programs (OSP), a research grant/contract that OSP has reviewed and signed off on, or some arrangement relating to the receipt of research funds which has been agreed to by OSP.

The Development Office has the primary administrative responsibility over activities that will result in or that concern fund-raising and gifts.

Questions regarding the classification of external funding should be directed to the Controller’s Office.



An agreement to acquire, purchase, lease, or barter property or services that primarily benefit the sponsor. For an award to be considered a contract, it normally must contain all of the following elements:

  • Detailed financial and legal requirements must be included in a specific statement of work to be performed.
  • A specific set of deliverables and/or reports to the sponsor is required.
  • Separate accounting procedures are required.
  • Legally binding contract clauses must be included.


An agreement to transfer to the grantee money, property, services, or anything of value to accomplish a public purpose, such as support or assistance in an area of interest to the sponsor. For an award to be considered a grant, it normally will contain the following elements:

  • The statement of work must be phrased in general terms to allow the project director a significant amount of freedom to change emphases within the general area of work as the project progresses.
  • Deliverables are minimal, usually consisting of reports only.
  • Separate accounting procedures are required.


A donation of money, property, or anything of value to the recipient for the recipient’s ownership and use. Gifts normally contain only the following elements:

  • If there are any restrictions on use, they are limited to the University, a unit, a program, or an activity.
  • The amount of a gift may or may not bear any relation to the total cost of the program or activity.
  • There are no deliverables and/or reporting requirements.
  • Funds may be commingled with funds from other sources within the same accounts.