Framework for Thinking About Gifts vs. Grants

The distinction between grants, gifts and awards can be subtle. Questions regarding whether an award is a grant, gift or award should be directed to your assigned representative within the sponsored programs office for your school:

Office for Sponsored Programs, University Area
School of Public Health, Office of Financial Services
Sponsored Programs Administration, HMS / HSDM

In making the determination regarding whether a new fund is a grant, gift or award, your sponsored programs representative will consider the following important factors. It’s important to note that a new fund may have characteristics that fall within both categories; thus, all factors must be weighed in order to make a final determination.

1. Mission Of and Benefit To Funder
   RG/NG Gift/Grant: Funds are in support of items that are directly related to the recipient's mission, while only indirectly related to the funder's business.
   NE/Award: Funds are in support of items that are directly related to the funder's business activities, and may or may not be directly related to the recipient's mission.
   
   
2. Value Exchange
   RG/NG Gift/Grant: Funder receives little or no value in exchange for the funding provided.
   NE/Award: Items provided are of particular value to the funder, and the funder is entitled to receive value (i.e., funder may request IP, publication rights, data, etc.)
   
   
3. Scope of Work
   RG/NG Gift/Grant: Funder expresses the goal of an activity rather than the "how tos".
   NE/Award: Funder determines the "how tos", such as a protocol for testing or specific method of program delivery.
   
   
4. Penalty for Non Performance
   RG/NG Gift/Grant: The only penalty for failing to deliver items on a timely basis are returning unspent funds; there is no penalty for failing to use all the funds.
   NE/Award: Penalties (e.g., punitive damages) may exist for failing to deliver items on a timely basis. Funder may include audit and compliance terms.
   
   
5. Publication and Data Review
   RG/NG Gift/Grant: Funder places little or no restriction on review of items before they are made available.
   NE/Award: Funder may place restrictions on how the items are reviewed before being made available to a wider audience.
   
   
6. Cost Determination
   RG/NG Gift/Grant: Proceeds are a subsidy to the cost of providing an item (i.e., the activity is something Harvard would be doing anyway, whether or not the funding in question is provided).
   NE/Award: Proceeds are the cost of providing the item plus overhead/indirect cost.
   
   

Non-Federal Awards (NE) vs. Non-Federal Sponsored Grants (NG) vs. Restricted Gifts (RG)

Once the determination has been made that the terms prompt University oversight beyond the Office of the Recording Secretary (RSO), OSP will then determine whether the award should be processed as a Non-Federal Sponsored Grant (NG) or a Non-Federal Award (NE). This determination is necessary to ensure that awards, which may qualify as "gifts" eligible for the charitable deduction for Federal income tax purposes, are also processed by the RSO. A further breakdown of the difference between NE, NG and RG funds can be found below.

1. Non-Federal Awards (NE). This category includes all funding arrangements in which the University is providing a return benefit to the grantor in exchange for the payment, regardless of whether the funding instrument is designated a contract, cooperative agreement, grant, consortium agreement, or otherwise. This category also includes all funding by foreign entities or international organizations managed by the Office for Sponsored Programs (OSP), whether pursuant to a contract or sponsored "grant." This category includes all subcontracts and subgrants from non-federal sources. Non-federal Awards are processed only by OSP.
   
   
2. Non-Federal Sponsored Grants (NG). This category includes all other funding arrangements not deemed to be contracts, and not derived from foreign or international entities. Generally, awards from Section 501(c)(3) nonprofit organizations will be included within this category as they routinely represent grants and not contractual payments. This category also includes all grants from industry, which require gift certification. Non-federal Sponsored Grants are processed by both OSP and RSO.
   
   
3. Restricted Gifts (RG). This category includes funding arrangements where the award is not predicated on detailed terms and conditions, nor are there any terms which specify how the funding must be spent or administered (i.e., funding received may be utilized at the full discretion of the recipient.) If any financial reporting is included, it is limited and for stewardship purposes only. Unexpended funds are not returned to the donor at the expiration of the gift period. Restricted Gifts are processed only by RSO.

Finding Sponsored Funding | Preparing Proposal | Setting Up Sponsored Award | Managing a Sponsored Award | Closing Out a Sponsored Award
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