Distinguishing Gifts from Sponsored Projects

The University receives various forms of support in the execution of its mission from outside private entities. This support is generally categorized as either a gift or a sponsored project (grants and contracts). The purpose of this policy is to provide guidance on determining the proper classification between these categories. This determination can generally be made based on a number of attributes that are specific to each of these sources of funds. However, at times, the appropriate determination may require a review from central offices, led by Finance and/or General Counsel. 

Effective Date: Formalized January 1, 2008, updated February 25, 2021

Reason(s) for the Policy

To assist faculty, staff and others in distinguishing between gifts and sponsored projects.

Primary Guidance to Which This Policy Responds

IRS Regulations regarding Charitable Contributions (Publication 526)

Accounting Standards Update (ASU) 2018-08, Clarifying the Scope and Accounting Guidance for Contributions Received and Contributions Made

ASU 2016-10 Revenue from Contracts with Customers

Responsible University Office

Sponsored Projects Administration

Office of Alumni and Development

Controller’s Office

Revision History

Revised February 25, 2021

Who is Governed by This Policy

All University employees charged with the administration of gifts and sponsored projects.

Who Should Know This Policy

All persons governed by this Policy (see above)

Exclusions & Special Situations



At Columbia University (the “University”), the Office of Alumni and Development (“OAD”) processes and administers gifts and Sponsored Projects Administration (“SPA”) processes and administers grants and contracts from outside funders. In order to comply with IRS regulations and GAAP accounting standards, and to ensure the proper oversight and administration of this funding, please follow the guidance below to differentiate gifts from sponsored projects, along with the charts in Appendix A, B, and C.

Distinguishing Gifts from Sponsored Projects – Appendix A, B, C

Gifts are voluntary contributions made to the University without the donor requiring anything of value in return. While a donor may restrict or designate the use of a gift in support of a particular activity, the University must retain financial and administrative control over the gift. Sharing information or seeking donor input are common forms of donor stewardship and engagement, but never to the extent that the donor retains control of the gift, such as directing appointments, research or activities, or is involved in carrying out the purposes of the gift.

Sponsored Projects (Grants and Contracts) bind the University to a specific line of scholarly or scientific inquiry, which usually requires a statement of work, grant application or proposal and/or requirements that may indicate a level of continuing sponsor control or reciprocal value. This includes research, instruction and training, public service, fellowships, and other scholarly and creative activities conducted under the direction of University faculty and staff, and funded by an outside source in accordance with award instruments. The sponsor may receive goods, services or other value in exchange for providing funding, or retains control and involvement in the direction, oversight or administration of the grant.

Please note, whether an agreement allows indirect costs or administrative fees, and the amount or percentage allowable, is not a consideration in the determination of whether a gift or a sponsored project.


Gifts are processed through OAD, which issues tax receipts to donors. Donors may not receive value in return for their gift or retain control over their gift. The use of the funding in gift agreements is defined in general and broad terms. Language providing additional flexibility in the use of the funds, both now and in the future, is extremely helpful, when possible.  Gift instruments may provide the following at a high level:

  • Short proposals and/or discussion of goals and aims or the project or research.
  • General budgets or descriptions of expenses.
  • Stewardship and engagement, including progress and final reporting, both narrative and financial.

Gifts, typically in the form of a pledge, may at times have events or conditions that must be met (i.e. construction completion, matching requirements, hiring an incumbent to fill a professorship) before being entitled to the gift.


Grants and contracts for sponsored projects are processed through SPA, or in certain cases, the Clinical Trials Office (“CTO”, related to industry sponsored clinical trials and research) or Columbia Technology Ventures (“CTV”, related to technology transfer and licensing). OAD may also, at times in partnership with SPA, be involved with the solicitation, negotiation and donor relations of sponsored projects, most often when related to giving from a Foundation. Sponsored projects are given to the University to accomplish specific detailed objectives within a specific time frame.

Usually, grants are philanthropic in nature and sponsors do not receive any value in return for their funding. They do, however, retain sufficient control over their contribution. The University must meet various requirements to be entitled to these contributions; the sponsor typically retains the right of return of the funds or the release from obligation to provide further funding. These requirements, or barriers to entitlement of the funding, found in sponsored project agreements include:

  • Detailed research milestones, outcomes, outputs, or specified levels of service.
  • Limits on discretion in how the work is carried out including:
    • Following the sponsor’s work plan or protocols or requiring review of research.
    • Adhering to the sponsor’s expense policies and guidelines.
    • Being paid on a cost reimbursement basis.
    • Requiring the hiring of a specific individual or the work to be conducted or overseen by a particular individual.
  • Other required deliverables or reports related to the purpose of the funding, including technical reports, data, and analysis. This would not include administrative reporting requirements to allow the funder to assess compliance with the terms of the agreement.

While considered sponsored projects, grants are also included in Development reporting/fundraising totals since no value is exchanged.

While a sponsored project agreement will likely include most of the following, the existence of only these items may not necessarily create a barrier to entitlement of funding, if they are primarily administrative requirements that only enable the funder to confirm we are complying with the agreement such as:

  • Detailed progress or financial reports or meetings
  • Payment due depending on receipt of reports or meetings
  • Line item budgets and approval for budget changes
  • Timeframes for work to be completed or approval of an extension to complete
  • Notification and/or approval of change in Principal Investigator (PI)
  • Audit requirements
  • Advisory committees

However, agreements containing these requirements may also indicate a level of sponsor control, and so will be processed as a sponsored project in order to ensure the proper oversight and reporting.

Contracts are not philanthropic in nature as sponsors may receive goods, services or other value in exchange for providing funding. Contracts are not included in any Development/fundraising reporting.  The sponsor may be largely responsible for defining specifics and closely monitoring the services and would likely retain another organization to provide the services if the University was not engaged to do so. The sponsor may promote the program and materials may give the impression it is their program, separate from the University. These contracts may include arrangements in which the sponsor has conceived of the idea for a program and is funding the University to host or operate. Sponsors may also receive other commensurate value in exchange for funding. This includes granting the sponsor proprietary rights or other privileges, such as patents/licenses (or options to intellectual property (IP) rights), copyrights, or advance and exclusive knowledge and/or use of research outcomes, data and results of work. Sometimes this may be intangible, uncertain, or difficult to measure, as research may not always result in proprietary discoveries, but this is still considered an exchange of value.


Departments should contact SPA or OAD when assistance is necessary to determine whether a particular agreement may be processed as a gift or sponsored project. SPA and OAD will review in conjunction with this policy to assign the appropriate classification. As the classification must be in accordance with accounting and legal standards, if unclear, SPA or OAD will work with the Controller’s Office (and CUIMC Controller’s Office for CUIMC agreements) and the Office of General Counsel for final review and determination.

Funding agreements/arrangements can often be complex. At times, the contribution is intended as philanthropic but the agreement may include language that prohibits the agreement from being classified as a gift. In other cases, the funder may want to both make a gift and support a sponsored project in the same agreement.  Please consult with OAD’s Senior Executive Director of Gift Strategy to determine the best path forward in drafting these agreements.