COLORADO SCHOOL OF MINES AND COLORADO SCHOOL OF MINES
FOUNDATION GUIDANCE ON DEFINING AND DISTINGUISHING BETWEEN
RESEARCH GIFTS & SPONSORED PROJECTS

Purpose

To help faculty and staff distinguish between a research gift and a sponsored project before
a proposal is submitted.

Definitions

Both sponsored projects and research gift funded activities are externally-supported, with funds
typically provided in response to a request or proposal. The classification of funding as “research
gifts” or “sponsored project” will affect, among other things, the way Colorado School of Mines
(hereafter CSM) or the Colorado School of Mines Foundation (hereafter CSMF) accounts for the
funds, calculates and applies Facilities & Administrative (F&A) indirect costs (in the case of a
sponsored project) or CSMF administrative fees (in the case of a research gift), and reports on the
use of the funds to the sponsor or donor and to the Board of Trustees and/or CSMF Board of
Governors. The following summary outlines the campus procedure for defining and
distinguishing between research gifts and sponsored projects. If you have any questions after
reading the information below, please contact the Office of Research Administration (ORA) at
303-273-3538 or the Office of University Advancement (OUA) at 303-273-3148.

Definition of Sponsored Projects

Sponsored Projects are externally-funded activities in which a formal written agreement, i.e., a
grant, contract, or cooperative agreement, is entered into by CSM and by the sponsor.
Sponsored projects typically have a specified statement of work with identified deliverables,
provide an exclusive benefit to the sponsor, allow for detailed financial accounting, and have a
budget which includes direct and indirect costs of the research activity.

The following conditions characterize a sponsored project agreement, and help to distinguish
such agreements from gifts:
1. Statement of Work
Sponsored projects are typically awarded to CSM in response to a detailed statement
of work and commitment to a specified project plan. As described below, this
statement of work is usually supported by both a project description and a line-item
budget, both of which are essential to financial accountability. The statement of
work and budget are usually described in a written proposal submitted by CSM to
the sponsor for review and agreement.
2. Detailed Financial Accountability
The sponsored project agreement includes detailed financial accountability, typically
including such conditions as:

▪ a line-item budget related to the project plan. The terms of the agreement may
specify allowable or unallowable costs, requirements for prior approvals for
allowable or unallowable costs, requirements for prior approvals for particular
expenditures, etc.

▪ a specified period of performance, typically defined with “start” and “stop”
dates

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

▪ regular financial reporting and audit, including, for federal and state awards,

accountability under the terms of OMB A-21, Principles for Determining
Costs Applicable to Grants, Contracts, and Other Agreements with Educational

Institutions and OMB A-110, Grants and Agreements with Institutions of
Higher Education, Hospitals, and Other Non-Profit Organizations. These

conditions generally define the level of financial accountability associated with

a sponsored project.

3. Required Deliverables
Sponsored project agreements also usually include contractual consideration such as
▪ terms and conditions for the disposition of tangible properties (e.g., equipment,
records, specified technical reports),
▪ intangible properties (e.g., intellectual property [rights in data, copyrights,
inventions], testing, or evaluation of proprietary property),
▪ other services or considerations specified by the sponsor.

While not all of the above conditions are necessary to define a sponsored project, they are
collectively indicative of the increased level of financial accountability associated with such.

Special note about Research Consortiums: Intellectual property rights and data rights are
typically granted to a sponsoring member of a research consortium. As such, research
consortiums will be considered sponsored projects.

Definition of Research Gifts
A research gift, on the other hand, is defined as any term of value given to the University or
Colorado School of Mines Foundation by a donor who wishes to support the research of a faculty
member or group of faculty members, and who expects nothing of significant value in return,
other than recognition and disposition of the gift in accordance with the donor’s wishes. The
Colorado School of Mines Foundation is the gift receiving organization of the Colorado School of
Mines and is a 501(c)(3) organization. Donors are encouraged to make their gift through the
CSMF.

Therefore, a gift is designated as a Research Gift when it is provided as discretionary funds
to support the research of one or more specified faculty members, graduate students or
research programs.

In general, the following characteristics describe a research gift:
1. Research gifts do not carry contractual requirements and there are no deliverables to the
donor. If such restrictions are imposed on the use of funds, such funds will be regarded as a
sponsored project and treated accordingly. A research gift may, however, be accompanied by
an agreement that specifies the use of the funds for a particular purpose.
2. A research gift is irrevocable.
3. There is no formal fiscal accountability to the donor beyond periodic progress
reports and summary reports of expenditures. These reports may be thought of
as requirements of good stewardship, and, as such, may be required by the terms of a
gift. They are not characterized as contractual obligations or deliverables.

Recovery of Direct and Indirect Costs and Gift Fees
Once extramural funds have been classified as sponsored projects or as gifts, the following
mechanisms are in place to recover costs incurred by the university:


For Sponsored Projects
In accordance with CSM’s policy, sponsored projects must recover the full cost of research, both
direct and indirect. For more information on indirect costs/overhead please go to
http://www.is.mines.edu/ora/default.shtm. A sponsored project budget will include the School’s
full negotiated F&A (indirect) cost rate, unless a waiver of those costs has been approved.

For Research Gifts
An administrative fee is assessed to manage any research gift and to support relevant university
infrastructure. Research gifts are subjected to the same administrative fees as other gifts to the
Colorado School of Mines Foundation. For information about the current CSMF administrative
fees, contact the OUA at 303-273-3148.

DISTINGUISHING BETWEEN RESEARCH GIFTS AND SPONSORED PROJECTS

Distinctions Based on Source of Funds
All funds provided by U.S. Government agencies, at the federal, state, or local level, in support of
CSM activities are treated as sponsored project funding. Government funds are not treated as
gifts.

Distinctions Based on Intent of Donor/Sponsor
In cases where funding is being provided by corporations, foundations or others not specified
above, the distinction between research gifts and sponsored projects will be made based on the
nature of the proposal, statement of work, and/or terms of the agreement, taking into
consideration the intent of the donor/sponsor.

Note that, in some situations, associated communications about the award or gift, including
written proposal or award documents, or conversations, have already made it clear that the
donor’s/sponsor’s intent was to classify an award to CSM or CSMF as either a research gift or a
sponsored project. In these cases, the terms of the accompanying agreement may have to be
adjusted in consultation with the donor-sponsor in order to clearly document the intent and avoid
unintended classification, while insuring that appropriate campus and CSM and CSMF policies
are followed.

THE DECISION-MAKING PROCESS IN UNCLEAR SITUATIONS

In some cases, the distinction between research gifts and sponsored projects can be difficult to
draw. If PIs, departments or units need assistance in determining whether an interaction should
be managed as a gift or a grant, please contact Director Ralph Brown, Office of Research
Administration at 303-273-3538 or Kim Senger, Office of University Advancement at 303-273-
3148.

In the event that a classification still cannot be made, the Senior Vice President for Finance and
Administration, the Vice President for Research and Technology Transfer and the Vice President
for University Advancement will collectively resolve the issue. If necessary, the final arbiter is
the President.







Research Gift or Sponsored Project Indicators

If, after reviewing definitions and considering the intent of the source of funding and nature of the
agreement in question, a question remains about the proper classification of an award, the
following list of indicators may be helpful. Taken together with the analysis of the source of
funds and the terms of the agreement, these criteria should help to classify ambiguous awards.




Research Gift

Sponsored Project

Purpose
Designated by the donors to
For a specific statement of
support the research of one
work, e.g., specified protocol,
or more specified faculty
experiments, testing of
members, graduate students
hypotheses, particular line of
or research programs
inquiry. Usually for a specified
research project but may be for
projects associated with
instruction or other sponsored
activity
Required
No deliverables. No
Deliverables defined by formal,
Deliverables
obligation or agreement to
written agreement, including,
share data/research results
reports, research results, IP
with donor; donor willing to
rights, equipment, or other
sign gift agreement
specified services or
relinquishing intellectual
considerations. Funds may be
property and data rights to
withheld pending delivery.
University. Donor may
Sponsor expects access to
request progress reports, as
research results and the ability
noted above, and ability to
to audit research results, but
observe at open research
not to prevent publication.
reviews

Tax Implications
Qualifies for tax treatment
May qualify for basic research
as charitable contribution by tax credit for sponsor
donor
Publication
Publication attribution may
Publication attribution is typical
Attribution
be encouraged or agreement
and acknowledges the sponsor
may be silent on attribution
Form of Proposal
Proposal may be formal or
Proposal submission required
informal, e.g., a letter or
through ORA
proposal from an individual,
a department, office or the
school. Proposals should be
coordinated through OUA.
Stewardship
Often require only general
May require detailed financial
stewardship and
and other reports, e.g., scientific
communication as a
reports, invention reports,
courtesy to donor, e.g.,
financial reports on sponsor-
progress reports, reports of
specified format, may include
expended funds and
the right of sponsor to audit
balance, invitation to open
reviews of research




Research Gift

Sponsored Project

Financial/Budget
A research gift is
Budgets and project period may
irrevocable.
lead to unexpended funds that
must be returned if no approval
to carry forward or extend
project. Certain expenditures
may require prior written
approval by sponsor. Must be
separately budgeted and
accounted for







COLORADO SCHOOL OF MINES GUIDANCE FOR COMPANIES
Should you provide a gift to support research (CSM Foundation) or enter into a sponsored
research
agreement (contracts & grants) with the Colorado School of Mines?

Companies can support the Colorado School of Mines in many ways such as hiring students,
sending employees to the University as students or guest lecturers, and publicly supporting the
University’s goals. Two of the most common ways companies work with the University is by
making gifts to support research at the University, or by sponsoring research at the University.
Making a research gift and sponsoring research (through contracts or grants) at the University
have very different outcomes, requirements, and procedures for both the University and the
company. Depending on your company’s goals, each mode of supporting research may be
appropriate in different situations. This document will assist you in identifying the distinctions
between research gifts and sponsored research (contracts or grants). The Office of Research
Administration or Foundation University Advancement should be contacted for further
assistance.

Companies often use the terms “gifts” and “grants” interchangeably, but they have very distinct
meanings for the University. Generally, “gifts” are charitable contributions for which the
company does not receive any tangible benefits in return, while sponsored research “contracts or
grants” are used when a company wants to identify a particular scope of work, and guarantee
access to the research results. The chart below identifies common distinctions.







Sponsored Research/



Research Gifts
Contracts & Grants

Notes
Purpose
Designated funds to
Funds to support a
We may ask about
support the research of
specific statement of
your “intent” for the
one or more specified
work, e.g., specified
funding in order to
faculty members,
protocol, experiments, properly assign the
graduate students or
testing of hypothesis,
funds as gift or
research programs
particular line of
contract/grant
inquiry
Managing
Gift Letter or gift
Contract or Grant

Document
agreement
between
Company and
University
Managing
Foundation University
Office of Research

Campus Office
Advancement-Corporate
Administration
and Foundation Relations







Sponsored Research/



Research Gifts
Contracts & Grants Notes
Deliverables
No deliverables.
Deliverables are
Gifts are meant to
Company may
(Company may receive
defined by a formal,
benefit the university
ask for
reports and may be
written contract and
and the public while
invited to observe at open may include reports,
sponsored research
research reviews).
research results,
agreements permit a
University has no
limited IP rights,
sponsor to direct work
obligation or agreement
equipment, or other
more specifically
to share data/research
specified services or
toward company
results with donor.
considerations.
purposes, although the
University manages
Sponsor receives
university does not
intellectual property and
access to research
engage in work-for-
data rights to University
results, internal rights
hire.
according to standard
to use intellectual

policy. Donor may
property, and the first
request progress reports.
right to negotiate for
intellectual property
which results from the
research.
Tax Implications
Qualifies for tax
May qualify for basic
Check tax law for
treatment as charitable
research tax credit for
your jurisdiction.
contribution by donor.
sponsor.
Publications
University has rights and
University has rights

responsibilities to publish
and responsibilities to
scientifically novel work.
publish scientifically
University may attribute
novel work.
donor in work.
University will
attribute sponsor in
publication. Company
will have a limited
review period of
planned publications
in order to remove
sponsor’s confidential
information.
Form of Proposal
University typically sends A specific scope of

a request for support, e.g., work with a budget is
a proposal from an
provided to the
individual, a department,
sponsor through the
office or school in
authorized office
coordination with
(Office of Research
Foundation University
Administration).
Advancement.







Sponsored Research/



Research Gifts
Contracts & Grants Notes
Finances
No requirement for return Budgets and project

of unexpended funds.
period may lead to
unexpended funds that
must be returned if no
approval to carry
forward or extend
project.
Indirect
8.5% or current rate
53.68% or current rate
Fees/Costs


For more information please contact:
Gift or Grant Designation: Office of Research Administration: 303-273-3538
Gifts and Research Gifts: Office of University Advancement: 303-273-3148