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Contracts vs grants vs charitable gifts

  • 1.  Contracts vs grants vs charitable gifts

    Posted 28 days ago
    Good morning and happy Friday!

    We have department's that fundraise outside of our office and their efforts focus mainly on government, corporation, and foundations.  The revenue is usually a contract or service exchange. However, some grants are charitable and require proper tax letters.  There is some confusion between the departments about which gifts should be filtered through Advancement.  Do you have any criteria or procedure to help to identify charitable gifts?

    Thank you!

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    Marta Kostrzewa

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  • 2.  RE: Contracts vs grants vs charitable gifts

    Posted 28 days ago
      |   view attached
    Normally there is an officer of "Sponsored Research" that handles specialized grants requiring overhead administration.  That office, and yours, should be the only two that process gifts and grants.  Your institution needs to establish a written policy that meets with the approval of both offices and the CFO directing departments where to send their checks.  The protocol is typically found in your gift acceptance policy.

    Attached is a copy of a joint memorandum we distributed at NC State you might find useful.  It not only describes gifts, grants, and contracts but specifies which office handles which type of payment.

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987




    Attachment(s)



  • 3.  RE: Contracts vs grants vs charitable gifts

    Posted 2 days ago
    Thank you! The document is very helpful. I have two questions:
    1.  Provided that the donor does not receive benefit from such a grant, and provided that the provisions of the grant do not contain a comprehensive set of terms and conditions such as, but not limited to intellectual property, scholarly publications, or fiduciary obligations including financial reporting or audit, such grants are administratively handled the same way as a gift." - what exactly does fiduciary obligation mean here and how is that different from proving the funder with report on how the funds were spent? Can you provide an example of when a specific grant wold not be include in fundraising totals and shouldn't receive a tax letter? 
    2. Is the following statement valid regarding the 2%, "Inviting corporate sponsors to a special event, such as dinner or a reception, as long as the monetary value of the event is not more than 2% of the corporate sponsor's payments to the nonprofit."

    Thank you.

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    Marta Kostrzewa
    Budget and Operations Manager
    Pratt Institute
    mkostrze@pratt.edu
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  • 4.  RE: Contracts vs grants vs charitable gifts

    Posted 2 days ago
    1. "Fiduciary Obligation" is one of those fun legal terms Counsel loves to add to a protocol such as this.  Examples of what could not be counted is a grant where the financial reporting requirements are deemed too arduous to fall under a standard gift/grant scenario.  These are grants that your institution would determine require an unreasonable expense on your part to administer and, as such, commonly result in overhead fees being assessed.  Normally a Gift Acceptance Committee would make the call as to whether the fiduciary requirements are such that the payment could not be recognized as a gift.
    2. The value cannot exceed 2% of the gift amount OR $112 - whichever is LESS!
    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987