Determining Whether a Project is a Gift/Philanthropic Grant or a Sponsored Project
Funding, particularly when received from a non-profit entity (such as a foundation, private organization, or corporation), is sometimes difficult to classify as a gift or sponsored project.
This page clarifies the differences to assist in determining whether your project is a gift or a sponsored project.
Sometimes a funding entity may refer to a "gift" as a "grant" or vice versa. The following guidelines explain how SPA and the NIU Foundation interpret and process funding regardless of the sponsor's terminology.
A gift is the voluntary, non-reciprocal transfer of money or property from a donor to an institution. The donor may be an individual, a corporation or a non-profit organization. The donor does not expect anything of value in return other than recognition and does not have control over expenditure of the funds. A gift may meet the interests of the donor and can be restricted or unrestricted.
A sponsored project is an externally-funded activity or activities in which a formal written agreement is entered into by NIU and the extramural funding agency. Funding usually results from a competitive peer review process but not always. These awards often require performance of specific duties such as research and typically require budget reports, progress reports, and the return of unused funds. Below are the primary types of sponsored projects.
Any funding that meets the criteria above provided by government sources at the federal, state or local level in support of Northern Illinois University is treated as a sponsored project. Government sources could include Congressionally Directed Program Funds, and the Illinois State Board of Education, the U.S. National Science Foundation or the U.S. National Endowment for the Humanities, to name a few.
Government funds are not treated as gifts. Funding from voluntary health organizations or associations, such as the American Cancer Society or American Heart Association, is usually treated as a sponsored project and not a philanthropic grant due to the terms and conditions of their awards.
All sponsored project proposals must receive approval by Sponsored Programs Administration prior to submission to the sponsor. All sponsored projects must be routed through InfoEd and reviewed by SPA before submitting to an external funding agency, including those where an institutional signature isn't required. Additional information regarding proposal review and submission through SPA can be found on the Submitting Proposals resource page.
All sponsored project awards are reviewed and signed by Sponsored Programs Administration as the Authorized Organizational Representative for these programs.
The Northern Illinois University Foundation's (NIUF) Office of Corporate and Foundation Relations (CFR) handles all gifts and philanthropic grants as defined above. All corporate and philanthropic grant proposals must receive approval by the Foundation prior to submission to the prospective donor. In addition, the CFR Team can assist with strategy and proposal development for certain sponsored projects which are submitted and accepted through Sponsored Programs Administration. This includes, but is not limited to, grants from foundations, both professionalized and family, corporations or professional organizations and associations.
The priority of the CFR team is to support funding initiatives that fall within the university's strategic plan. If you would like support from CFR, or if you would like to submit a proposal for charitable funding, please contact Erin Smith, senior director of corporate and foundation relations, at erin.smith@niu.edu. Please note that even if the CFR Team assisted in strategy and proposal development, all sponsored proposals must still follow standard SPA timelines and be approved through Sponsored Programs Administration via InfoEd prior to submission. If an institutional endorsement is required on a grant application, SPA signs the application.
| Factor | Gift/Philanthropic Grant | Sponsored Projects |
|---|---|---|
| Source of Funds | Individuals, Foundations, Non-Profit Organizations, Corporations, Corporate Foundations, Donor Advised Funds | Government Agencies, Research Foundations, Non-Profit Organizations, Corporations, Corporate Foundations, Other Universities |
| Purpose | The donor may provide support for a particular activity, program area or purpose. These can include outreach programs, professorships, scholarships, non-federal capital projects, research and instructional programs. | Sponsor requires specific research or program plan and/or deliverables that benefit the sponsor (e.g., final technical report, evaluation, grant progress reports, financial reports, data and data sets). |
| Reporting | The donor may require or request a broad summary or stewardship report of the results from the participant. | The sponsor requires reporting for specific award activities that often includes progress, budget, inventory, and patent or invention reports. |
| Deliverables | Deliverables for gifts/philanthropic grants should be charitable in nature and not benefit the funder. Examples include: grant stewardship report which can include research reports, marketing/visibility, and philanthropic engagement opportunities. | Deliverables for sponsored projects are not charitable in nature and benefit the funder/sponsor. Examples include: grant progress reports, financial progress reports, data and data sets. |
| Budgeting | Budgeting is general in nature and terms, and funder pre‐approvals are not required as long as funds are used for the stated purpose. | Budgets are specific, and variances from proposed budgets (within designated parameters such as percentage between line items) may require sponsor prior approval. |
| Unused Funds | Generally very difficult for donor to recoup, except in cases of deliberate, proven use of restricted funds inconsistent with terms of a restricted gift. Penalties for non-performance are per the terms in the gift agreement. | The sponsor requires return of unexpended funds or written approval to spend beyond the project period or retain final balances. |
| Value Exchange and Intellectual Property | The donor receives no or nominal value in exchange for the funding provided other than recognition. The donor makes no claims on the patents, copyrights and other intellectual property rights that may result from activities associated with the gift. | The sponsor may impose restrictions on intellectual property rights, such as prior review of publications or use of results. The sponsor may have certain rights to intellectual property and works created under the award. |
| Funding Documentation | Gift or philanthropic grant agreement, donor acknowledgement letter, and/or tax receipts to the donor. | Notice of Award and/or grant or contract agreement. |
| Performance Period Terms | Per terms in philanthropic grant application and/or the gift/philanthropic grant agreement. | Typically requires a specific time period for conducting projects. |
| University Process | Managed through NIU Foundation or NIU Research Foundation. | Managed through Sponsored Programs Administration. |
This guidance strives to create bright lines to distinguish between grants and gifts/philanthropic grants; however, gray areas may remain. A contribution, for example, that requires extensive financial reporting beyond that normally required to fulfill an obligation of good stewardship, may fit the definition of a gift/philanthropic grant, but it might be administered more appropriately by SPA. Alternatively, a contribution with a stipulation that unused funds must be returned to the funder or sponsor rights to intellectual property, but that also requires applicants to be a 501c3 organization, may fit the definition of a sponsored project, but would need to go through the NIU Foundation (NIUF) or Northern Illinois Research Foundation (NIRF) to meet 501c3 eligibility requirements.
SPA and the NIUF work closely together to assess these "gray areas" to address these occurrences. It is vital that either SPA or the NIUF be alerted as early as possible regarding any plans to pursue grants, gifts, or philanthropic grants. In such instances, SPA and the NIUF will collaborate to quickly classify the funding opportunity and direct the faculty/staff to the correct office.
For guidance and/or classification, please complete the gift or grant checklist (DOCX) and submit to both the NIUF Office of Corporate and Foundation Relations at erin.smith@niu.edu and Sponsored Programs Administration at dlittle@niu.edu as early as possible for review. Please allow up to three business days for a decision.
Funding agencies sometimes refer to "grants" as "gifts," and that is what is happening in this case if they are requesting access to data. This is not a gift. Please submit your project to SPA via the Proposal Intake Form and SPA will assist you with accepting this agreement.
If the foundation is requesting a more general statement regarding how the funds were used rather than a line-item expenditure report and the final report is minimal, no, this project is considered a gift and does not go through SPA. This would be considered a stewardship report, and the NIU Foundation may be able to assist you. Please contact the Corporate and Foundation Relations team at erin.smith@niu.edu.
This is not correct. All sponsored project proposals are submitted to SPA per NIU’s standard institutional policy. Please submit a Proposal Intake Form and SPA will review and submit the proposal.
This is not correct. All sponsored project proposals are reviewed and endorsed by SPA. If you are in a non-binding stage of the application process (e.g., submitting a pre-proposal or letter of intent) and the sponsor requires institutional endorsement or submission by an Authorized Organizational Representative (AOR), the pre-proposal will generally need to route through SPA per NIU’s standard institutional policy for pre-proposals. If no institutional endorsement or submission by an AOR is required and no binding budget commitments are being made, the NIU Foundation can submit for you.
The award will be considered a philanthropic grant and the NIU Foundation Office will manage the funds. The NIU Foundation Office and SPA will coordinate this transfer including leading any conversations necessary with the community foundation.
Pre-award and Proposals
asosp@niu.edu
Post-award and Award Management
grantsfiscal@niu.edu
InfoEd Questions
erahelp@niu.edu