Module 1: Our Environment

Gift, Grant or Contract - Classifying Sponsored Research Projects

Princeton University receives sponsored research funding from more than 300 different sponsors, including federal agencies, foundations and for-profit companies.

Donations, gifts, grants or other awards that meet any of the following criteria qualify as sponsored projects, and must be set up and managed through ORPA:

The proposed project involves government funding or contributes to work that a sponsor is providing to a government sponsor.
The award document provides for the disposition of either tangible property (such as equipment, records, technical reports, theses or dissertations) or intangible property (such as rights to data, copyrights or inventions) which may result from the support.
As a condition of the award, the University must make a commitment regarding the level of personnel effort.

A sponsored project award may either be a grant or contract depending upon the deliverables and the terms on which the sponsor does business. Awards from National Science Foundation and National Institute of Health, for example, are typically grants (also referred to as assistance awards) or cooperative agreements.

Contracts, like those provided by the federal government or industry sponsors, are subject to negotiated terms and conditions and are generally specific to the type of research or the expected outcome. These grants and contracts are governed under the sponsor's terms and conditions, Office of Management and Budget circulars and the institution's policies.

All about gifts

A gift is defined as any item of value given to the University by a donor who expects nothing in return other than recognition and disposition of the gift in accordance with the donor's wishes.

Any funding provided by a governmental authority, either at the federal, state, or local levels, should not be treated as a gift.

In general, the characteristics of a gift include:

absence of any contractual requirements and deliverables. However, the gift may be for a stated purpose, restricting the use of the funds to that purpose;
irrevocability of the gift, with no specified period of performance; and
no requirement for formal fiscal accountability beyond periodic progress reports and reports of expenditures. These reports may be thought of as a requirement of good stewardship, rather than as a contractual obligation.

DAs and PIs should ensure that any gift received is not supported by federal funds. If a gift is supported by federal funds, it should be recorded in a 6xxx account and spending must adhere to all federal regulations.

Classification of sponsored project award vs. gifts

It is important to accurately classify the funding as a gift or a sponsored project award because classification affects the way Princeton accounts for the funds it receives and the way it calculates indirect cost rates. Furthermore, Princeton has a fiduciary responsibility to sponsors and donors to accurately classify awards as either sponsored projects or gifts.

While the intent of the donor or sponsor must be taken into consideration, donors sometimes confuse this issue by using the word "grant" when the donation actually qualifies as a gift, or vice versa. Consult with ORPA in situations where the department is unsure of the proper classification.

Management of sponsored project awards and gifts

Grant requests for sponsored research projects from private sources and all grant requests to public/governmental funders are established and managed through ORPA. ORPA sets up and administers all sponsored project accounts through Coeus.

Gifts from outside funding sources (foundations and corporations) are handled by Corporate and Foundation Relations and all requests for gifts and grants from individuals must be coordinated through the Office of Development.

Project grant numbers to be used are (the first three digits represent the department number):

xxx-2xxx - all grants and gifts managed by Development, including those handled by Corporate and Foundation Relations
xxx-4xxx - non-government funds managed by ORPA
xxx-6xxx - government-sponsored research funds, including pass-through funding managed by ORPA