Private Grants Vs. Gifts

Clear factors differentiate a grant and a gift. It is important to be able to recognize the difference so that the grant or gift is set up and administered appropriately. We pursue grants in collaboration with the Office of Sponsored Programs (OSP), where budgets are carefully constructed funds are deposited to a grant account that OSP sets up with a Department ID number. We pursue corporate and foundation gifts without OSP oversight, and funds are deposited to the JMU Foundation and assigned Advance ID accounts.

Below is a list of ways one can differentiate a gift that should be pursued with CFR and an award that should be pursued as a project/grant through OSP.

Please note that in some cases it may not be readily apparent if the award is a grant or gift. In these cases, CFR staff will review the documentation with JMU fiscal officers to decide which classification is most appropriate. 

Grants/Sponsored Projects

The following conditions characterize a sponsored project agreement and help to distinguish such agreements from gifts. Any analysis of these conditions must also take the intent of the donor/sponsor into consideration.

  • Represents an “exchange transaction” in which each party receives commensurate value
  • Usually has reporting requirements or specific restrictions on how the money can be spent
  • Usually has a specified time period over which the work will be done (a start date and an end date)
  • Sometimes requests that unused funds must be returned to the awarding agency/foundation/ corporation

1. Specific statement of work

Sponsored projects are typically awarded to James Madison University in response to a proposal to accomplish a specific statement of work and commitment to a specified project plan. While gifts may be restricted to a general purpose, e.g., cancer research, construction of a building, or library support, a sponsored project will usually entail a more detailed project methodology, e.g., a series of experiments to test a particular hypothesis, or support to perform a particular activity. This statement of work is typically supported by both a project schedule and a line-item budget, both of which are key to financial accountability, described below.

2. Detailed financial accountability

The written agreement typically includes detailed and complex financial accountability, including such conditions as:

  • a line-item budget related to the project plan, including F&A (indirect) costs

  • a specified period of time in which project funds may be expended, usually defined with "start" and "stop" dates

  • a requirement to return any unexpended funds at the end of that period

  • regular financial reporting and audit.

These kinds of conditions generally define the level of financial accountability associated with a sponsored project. They are collectively indicative of the increased level of financial accountability associated with such projects.

3. Disposition of properties (“deliverables”)

Sponsored project agreements also usually include terms and conditions for the disposition of tangible or intangible properties, including, for example, hardware, data, or intellectual property. The presence of such terms and conditions in the agreement indicate that the activity is a sponsored project. 


A gift, on the other hand, is defined as a contribution with no reciprocal benefit to the donor. In general, the following characteristics describe a gift.

  • Represents a "contribution," an unconditional transfer of cash which is voluntary and non-reciprocal
    No reporting and no restrictions
    No specific time period
    Usually all the money is received up front. JMU is given unconditional rights to the funds and funds do not need to be returned to the sponsor
  • No contractual requirements are imposed. However the gift may be for a stated purpose, with the use of the funds restricted to that purpose.
  • The award is typically irrevocable, with no specified "period of performance."

There is no formal fiscal accountability beyond periodic progress reports and reports of expenditures. These reports may be thought of as a requirement of good stewardship, rather than as a contractual obligation.

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