Procedure Library

Determine Gift or Sponsored Project

Purpose

To determine whether funding received from an external entity (the "sponsor" or "donor") should be classified as a gift or a sponsored project, ensuring proper management, compliance, and administrative oversight. 

Applicability

This guidance applies to faculty and others who receive funds from external sources to support University of Utah activities.

Instructions

When to Classify Funding as a Sponsored Project

Funding should be treated as a sponsored project if it exhibits any of the characteristics defined in What is a Sponsored Project, summarized below:

1. Detailed Statement of Work
   • Funding is provided in response to a specific scope of work, research plan, or defined set of activities.
   • The project involves structured scientific or scholarly inquiry.
2. Detailed Budget & Fiscal Accountability
   • The agreement includes a detailed budget, restrictions on how funds may be spent or other financial accountability requirements.
3. Disposition of Deliverables
   • The agreement specifies how tangible or intangible deliverables must be handled, such as:
     • Equipment, materials, or data
     • Technical or financial reports
     • Intellectual property rights, patents, copyrights, or licensing terms
4. Imposition of Legal Accountability
   • The sponsor requires legal terms such as:
     • Indemnification
     • Audit provisions
     • Hold-harmless or liability clauses
     • Arbitration
     • Confidentiality or NDA requirements
   • These characteristics indicate a level of oversight and expectation consistent with sponsored project administration.

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Distinctions Based on Donor/Sponsor Intent

For corporations, foundations, nonprofits, and individuals, classification depends on the intent of the donor/sponsor and the terms of the proposal or agreement.

• If communications (proposal, award letter, emails) clearly indicate the sponsor's intention for funding to be treated as a gift or sponsored project, the University may need to adjust agreement terms accordingly.
• This helps ensure the classification matches both sponsor intent and University administrative requirements.

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Decision-Making in Unclear Situations

When classification is ambiguous - for example, when:

• The sponsor uses "grant" to describe what is essentially a gift, or 
• Gift-like funding contains limited conditions

University personnel must balance:

• Sponsor/donor preferences, and
• University policies, compliance requirements, and administrative obligations.

Clarification may require:

• Contacting the donor/sponsor for more information
• Discussing intended use of funds
• Reviewing associated documentation

If uncertainty remains, the administrator (PI, development officer, sponsored projects officer, research staff, etc.) should provide all relevant documents (proposal, budget, award letter, draft agreement, etc.) to the Executive Director, Office of Corporate and Foundation Relations.

The executive director will consult with leadership from:

• The Office of the Vice President for Research
• The Office of the Vice President for Institutional Advancement
• The Office of General Counsel

To determine the final classification.

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Decision-Making Considerations

Award should be evaluated using the Funding Determination Worksheet, considering:

a) Donor/Sponsor Type

1. Is the donor/sponsor a U.S. federal, state, or local government entity?
2. Is the sponsor a foreign government or funded primarily by a foreign government?

b) Award Terms

1. Are deliverables required?
2. Does the sponsor request intellectual property rights?
3. Are there restrictions on publications or communications (e.g. confidentiality)?
4. Does the project require regulatory oversight such as IRB, IACUC, export control, HIPAA, or comparative medicine review?
5. Are there legal obligations imposed on the University (e.g., indemnification, audit rights, termination clauses)?

c) Award Scope & Reporting Requirements

Determine whether the proposal and award documentation reflect mostly:

• General requirements icon more consistent with a gift, or 
• Detailed requirements icon more consistent with a sponsored project

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Final Classification and Administration

If classified as a Sponsored Project:

• Funds must be managed through OSP and Grants & Contracts Accounting (GCA).
• A Document Summary Sheet is required.

If classified as a Gift:

• Funds are managed through the Office of Development or the college/unit.
• OSP should forward gift documentation to the Office of Development, copying the department administrator and PI.
• Departments must set up the activity according to FBS instructions. 
  
  

Related Policies and Procedures

• Research Handbook > Overview of Sponsored Project Administration > What is a Sponsored Project?
• Corporate & Foundation Relations > Determining Gift or Sponsored Project
• Corporate & Foundation Relations > Funding Determination Worksheet