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What is a Sponsored Project?

Processing Private Sector Support for Higher Education:

Corporate, Foundation and Nonprofit Support

The following are key characteristics to consider when determining whether support from a corporation or foundation should be processed through Development’s Gifts and Records Administration (GRA), or through the Office of Research and Sponsored Projects (ORSP). Please refer to the characteristics listed below and in the table that follows to determine whether funds provided by a corporate or foundation sponsor should be processed through the Development GRA or ORSP. 

Note that the existence of one characteristic alone is likely not sufficient to make a determination. Moreover, the characteristics of both sponsored projects and gifts will oftentimes apply to the same award. For these reasons, multiple factors should be considered in making an assessment of how to proceed. A sound judgment based on the preponderance of applicable characteristics should determine which office handles the funds. In general, ORSP will process and engage Sponsored Programs in the management of awards with budget, confidentiality, intellectual property or compliance factors (e.g., human subjects and animal research), aspects of which require the sophisticated tracking and review tools built into the research enterprise (e.g., effort allocation, royalties, IRB, UCUCA, etc.).

In cases where it is uncertain whether corporate or foundation support should be processed through Development or ORSP, any relevant documentation should be reviewed by ORSP for a determination. U-M gift officers should contact their Foundation Relations personnel for help in getting the documentation to the right place.

Corporate, Foundation And Nonprofit Support Processed Through Development (GRA)

  1. Voluntary contribution made to qualifying entities having charitable purposes, including educational institutions such as the University of Michigan.
  2. The contribution is not federal or state money.
  3. The contribution may be restricted, for example:
    1. For endowment, i.e., only a proportion of market value may be spent in perpetuity
    2. For a specific school, college, or unit
    3. For a stated purpose, like a construction project, program, professorship, scholarship, etc.
  4. The contribution can support research but the donor must not:
    1. Derive commercial or private benefits from research
    2. Have rights to intellectual property that may result
    3. Have first rights to any research outcomes
  5. The agreement documenting the contribution may be binding or non-binding, depending on the purpose.
  6. The contribution, once made, must be irrevocable for all donors except private foundations, who are allowed to include a clawback provision in their agreements under IRS regulations.
  7. According to the IRS, the agreement with a private foundation that documents a charitable contribution may use the term “grant” instead of “gift.”
  8. Periodic progress reports and reports about expenditures are allowable.

Corporate, Foundation And Nonprofit Support Processed Through The Office Of Research And Sponsored Projects (ORSP)

  1. Funds are awarded in response to a formal proposal submission, generally lead by a member of faculty as primary or lead investigator.
  2. Funds originate from a federal or state sponsor.
  3. The funding is conditional and/or revocable.
  4. The corporation or foundation receives some deliverable or commercial benefit, e.g., rights to intellectual property, pre-publication review, hardware, software, data.  
  5. Use of funds is governed by written sponsor guidelines or policies.
  6. Funds are restricted for a detailed purpose that requires adherence to:
    1. A specific statement of work and commitment to a specified project plan, such as a prescribed research activity;
    2. A detailed project methodology, e.g., a series of experiments to test a particular hypothesis, or support to perform a particular activity;
    3. A line-item budget, the tracking of which is key to financial accountability and requires sponsored project management systems to fulfill; and
    4. A specified period of performance in which project funds will be expended, usually defined with "start" and "end" dates.
    5. The supported activity requires the approval of a U-M compliance committee (e.g., IRB, UCUCA, IBC, etc.).
    6. Required reporting includes a schedule of periodic progress reports and formal, institutionally signed financial reports.
    7. Award requires protection of confidential information.
    8. Prior approval is required for changes to the statement of work, budget or period of performance.

Processing Corporate, Foundation and Nonprofit Contracts

Support from a corporation or foundation that is not a voluntary donation for religious, charitable, scientific, literary, or educational purposes may actually be a contract. Contracts are defined as “exchange transactions having potential commercial benefit or profit that does not support a charitable purpose(e.g., private gain). This category of support is most applicable to corporate research contracts, not to foundation, corporate foundation, or nonprofit grants or gifts. All contracts are processed through ORSP.

Development Reporting of Foundation and Nonprofit Support

Gifts and sponsored projects funded by foundations of any type and nonprofit charities can be counted as gifts in DART and campaigns, even when processed and managed as sponsored projects. Corporate research contracts are not counted. 

Elements that are irrelevant to decision about management of the award, i.e., may be administered as GIFT (GRA) or SPONSORED PROJECT (ORSP): Document is titled “grant agreement” or “grant contract”; Return of unexpended funds; Legal language about lobbying; Funder is a family foundation rather a professional foundation, or Transmittal letter does not refer to the proposal per se. When in doubt, work through a Foundation Relations, Corporate Relations or Office of Research and Sponsored Projects staff member to clarify. 

 

Award Characteristic

Sponsored Project

Contract

Gift

SOURCE OF FUNDS

Funding provided by an individual

 

 

X

Funding provided by governmental agency

X

X

 

Funding provided by private (for-profit or non-profit) entity

X

X

X

Funder remains anonymous

 

 

X

PROCESS TO APPLY FOR FUNDS

Funds awarded in response to a formal RFP

X

X

 

Faculty-defined scope of work

X

X

X

Funder-defined scope of work

 

X

 

FUNDER’S INTENT IN AWARDING FUNDS

Charitable purpose

X

 

X

Funding a professorship or endowment

 

 

X

TERMS OF USE OF FUNDS

Funds are revocable (may be returned)

X

X

 

Funds are irrevocable

 

 

X

Funds are restricted for a detailed purpose

X

X

X

Funds are restricted for a high-level generic purpose

 

 

X

Funds are unrestricted

 

 

X

Use of funds governed by Funder guidelines/policies

X

X

X

Uniform Guidance (2 CFR 200) applicable

X

 

 

Federal Acquisition Regulations applicable

 

X

 

Confidentiality of sponsored-provided information

 

X

 

Certifications and formal terms and conditions

X

X

 

Use requires compliance office review (e.g., IRB, UCUCA)

X

X

 

Specific period of performance

X

X

X

No specific period of performance

 

 

X

Prior approval required for budget, scope or date changes

X

X

 

Facilities & Administrative (Indirect) costs

X

X

 

Actual cost reimbursement

X

X

 

Fixed fee reimbursement

 

X

 

Milestone reimbursement

 

X

 

Prepaid or payment schedule

X

X

X

Funder granted access to U-M records

X

X

X

Funder may audit U-M expenses

X

X

X

University may terminate unilaterally

X

X

 

Funder may terminate unilaterally

X

X

 

OUTCOMES GENERATED FROM USE OF FUNDS

 

 

 

Public benefits

X

 

X

Funder benefits

 

X

 

Outcomes uncertain/flexible

X

 

X

Outcomes certain/inflexible

 

X

 

IP owned by university

X

X

X

IP owned by funder

 

X

 

Publication encouraged

X

X

X

Publication restricted

 

X

 

Pre-publication review required

 

X

 

OBLIGATIONS TO FUNDER

Detailed financial and progress reporting

X

X

 

Minimal high-level financial and progress reporting

 

 

X

No financial or progress reporting

 

 

X

U-M must return unexpended funds

X

X

 

U-M must retain unexpended funds except if Funder is a Foundation

 

 

X

U-M may negotiate re-allocation of unexpended funds

X

 

X