As usual, Herbert is "on the money" (sorry).

He mentioned GASB as the Government Accounting Standards Board and that there
was an equivalent one for non-state institutions.  That would be FASB
(Financial Accounting Standards Board),  for those of you keeping score.

Greg Schmidt

"Herbert B. Chermside" wrote:

> This disagreement constantly raises its head.  Recently I searched for an
> authoritative published statement by some major entity, and did not find
> one.  If anyone out there has found one, please share it.
>
> The argument presented below is completely fallacious.  A 501 C (3) may not
> accrue profit to shareholders, etc. AND must conduct activities (presumably
> with a benefit to society) in accordance with their charter.  Their charter
> may very well include making grants and contracts in order to benefit their
> chartered goal, e.g., fund research with the goal of curing XXX disease.
>
> 1)  For any institution, one part of the grant-gifts controversy has to do
> with what the sponsor/giver's intent, as documented in the "award", is and
> how the institution must account for it.
>
> If the intent is to relinquish to the recipient all title and interest, it
> is a gift, and may go into a gift account.
>
> If the intent is that the institution must comply with specific
> restrictions, e.g., do something specific with the funds (e.g., a project);
> provide the sponsor something, e.g. a report, a financial accounting, etc.;
> must return unused funds; etc. (some but not necessarily all of these),
> then the institution must put the funds in a "restricted" account.  The
> accounting principles that apply to this are the standards set out by the
> Governmental Accounting Standards Board (GASB)  (for a state institution;
> there's something equivalent for private ones) and the National Association
> of College and University Business Officers (NACUBO)
>
> 2)  Another part of the controversy is who assists university personnel in
> the processes of getting the funds.  Work that out any way you can, but be
> sure the individual who accepts any sponsored program (I carefully avoid
> "grant" because the work can legally mean a gift or a sponsored program
> that's not a contract) has the legal authority to bind the institution.
>
> 3)  Another part of the controversy is who gets credit for bringing the $
> in, and this is what makes it most "sticky", because the value and
> productivity of an office may be judged by the $ volume.  This is more
> often a critical factor in judging "gift" off ice than sponsored program
> offices.  Of course it probably indicates poor management if an office is
> judged on one criterion only, but it is certainly easier to point to an
> objective factor like $ than to determine the factors, many of which are
> not objectively measurable, that go into a good departmental "job review".
>
> Put the $ where you legally should and you won't have trouble with the
> auditors.  Work out the rest as best you can to serve your institution now
> and in the future.
>
> Good Hunting!!!!
>
> Chuck
>
> At 01:01 PM 2/28/2002 -0600, you wrote:
> >We are currently in the midst of a grant-gifts controversy with regard to
> >funds provided by private foundations and/or associations for the
> >performance of proposed research projects.  One party on our campus, not
> >Sponsored Programs, has claimed that regardless of the purpose of the
> >funds, regardless of the awarding process, funds provided by private
> >foundations and associations are gifts because: they are 501 c.3
> >organizations and, according to IRS rules, can only give gifts.
> >In other words, they are gifts because that is all that they can be.
> >
> >I have not been able to find anything in the IRS codes that either
> >supports or specifically counters this position.
> >
> >We have the NACUBO literature and typology of the characteristics of
> >grants and gifts.
> >
> >However, I am wondering if any of you who have previously dealt with this
> >on your campuses may have additional information, advice, or
> >documentation.  Specifically, anything that shows that the IRS does not
> >automatically require that funds provided by private foundations and
> >associations be treated as gifts, as distinct from grants.
> >
> >
> >Thank you in advance.
> >
> >
> >John R. Baumann, Ph.D.
> >Director
> >Office of Sponsored Programs & Research Support
> >University of Missouri -- Kansas City
> >5100 Rockhill Road
> >Kansas City, MO 64110
> >
> >816.235.1303 (v)
> >816.235.6532 (f)
> >xxxxxx@umkc.edu
> >
> >location: 5211 Rockhill Road
> >
> >
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>
> Herbert B. Chermside, CRA
> Director, Sponsored Programs Administration
> Virginia Commonwealth University
> PO BOX 980568
> Richmond, VA  23298-0568
> Express Delivery Only:
>         Sanger Hall, Rm. 1-032A
>         11th & Marshall Streets
>         Richmond, VA  23219
> Voice:  804-828-6772
> Fax     804-828-2521
> OFFICE e-mail   xxxxxx@VCU.EDU
> Personal e-mail xxxxxx@vcu.edu
> http://views.vcu.edu/ospa/
>
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