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Grant vs. Donation
Definition of Grant, Contract or Cooperative Agreement
Grants, contracts, and cooperative agreements (collectively called sponsored projects) are externally-funded activities in which a formal written agreement, i.e., a grant, contract, or cooperative agreement, is entered into by UND and by the sponsor. A sponsored project may be thought of as a transaction in which there is a specified statement of work with a related, reciprocal transfer of something of value.
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 UND 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 schedule 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 UND to the sponsor for competitive review.
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 particular expenditures, etc.
- a specified period of performance, typically defined with "start" and "end" 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 Circular A-21 (relocated to 2 CFR 220), Principles for Determining Costs Applicable to Grants, Contracts, and Other Agreements With Educational Institutions and OMB Circular A-110 (relocated to 2 CFR 215), 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. 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 projects.
3. Disposition of Properties ("Deliverables")
Sponsored project agreements also usually include terms and conditions for the disposition of tangible properties (e. g., equipment, records, specified technical reports, theses or dissertations) or intangible properties (e.g., rights in data, copyrights, inventions). The presence of such terms and conditions in the agreement indicate that the activity is a sponsored project.
Definition of Gifts or Donations
A gift or donation, on the other hand, is defined as any item of value given to the University by a donor who expects nothing significant of value in return, other than recognition and disposition of the gift in accordance with the donor's wishes.
In general, the following characteristics describe a gift:
- No contractual requirements are imposed and there are no "deliverables" to the donor. However, the gift may be accompanied by an agreement that restricts the use of the funds to a particular purpose.
- A gift is typically irrevocable. While the gift may be intended for use within a certain timeframe, there is no specified "period of performance" or "start"/ "end" dates as associated with sponsored projects.
- 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."
UND agrees to use restricted gifts as the donor specifies, and does not accept gifts that it cannot use as the donor intends. University approval for changes in the purpose of a gift fund may be required.