Email list hosting service & mailing list manager


Re: IRS determination that grants over $5,000 are donations Lori Hulak 14 Aug 2008 09:51 EST

WOW Jeffrey - thanks for doing all this research for me.  Gotta love this list serve.  Thanks to EVERYONE who provided valuable input, I GREATLY appreciate you sharing your knowledge.
Thanks AGAIN and hope i can repay the favor some day.

Lori

Lori B. Hulak, BA, CRA
Specialist, Grant Writer
Jefferson College of Health Sciences
920 S. Jefferson Street
Roanoke, VA 24031-3186
Phone (540) 985-8206
xxxxxx@jchs.edu
>>> Jeffrey Ritchie <xxxxxx@AURORA.ORG> 08/14/08 10:36 AM >>>
Turns out, it's probably a moot point.

Line 1 of the Federal Form 990 calls for "Contributions, gifts, grants,
and similar amounts received."  Without going into the minutia of the IRS
Regulations (and I'm an Enrolled Agent prone to doing just that), nearly
all public support, including gifts and nearly all federal or state grants
would be lumped together and reported on Line 1B of the Form 990.  Income
from Clinical Trials and other "fee for service" agreements would be
reported as "program income" on Line 2 of the return.

NOTE:  Don't confuse the IRS definition of "program income" with the NIH
definition -- I haven't researched it yet, but you'd be well-served to
assume that two different federal agencies have (at least) two different
definitions for the same term.

There's no mention of a $5,000 limit for reporting contributions, nor is
there any mention of a requirement to list grants received individually.
Gift or Grant, it all gets reported together.  However, and this might be
where the confusion arises, it does appear that any 501(c)(3) organization
that MAKES grants to external recipients must report all of these
individually (still no $5,000 minimum).

Now all that being said, this is federal guidance for non-profit
charitable organizations.  I have no idea how state-sponsored institutions
handle this.  What's more, you all may have individual state regulations
that require you to report in this manner.  God help you.

But to your previous point, Joanne, you're correct that the waters are
murky at best as to what is considered a gift and what's considered a
grant.  Aside from institutional bookkeeping and organizational turf
issues, one has to exercise caution to protect both the organization's tax
exempt status and donors, who might receive a nasty surprise when their
"charitable contribution" turns out to be nondeductible after all.
Unfortunately, there is no "bright and shining line" between one and the
other.

Jeffrey Ritchie
Grants Management Analyst
Aurora Health Care
3033 S. 27th Street; Ste 100
Milwaukee, WI 53215
(414) 385-2883

"Altieri, Joanne [VPRED]" <xxxxxx@IASTATE.EDU>
Sent by: Research Administration List <xxxxxx@hrinet.org>
08/13/2008 04:03 PM
Please respond to
Research Administration Discussion List <xxxxxx@hrinet.org>

To
xxxxxx@hrinet.org
cc

Subject
Re: [RESADM-L] IRS determination that grants over $5,000 are donations

Actually, I have done some pretty in-depth research on this, and I think
the line is not as clear between gift and grant as you say.  It can still
be a charitable donation (gift) even if the donor specifies the intent of
the money.  So a donor can give a gift of $20,000 to be used by Prof. X in
his/her research related specifically to ABC.  They can even request a
report that summarizes how the funds were spent and gives a general
summary of the work that was accomplished as a result of the gift.  They
can?t require something in return (no quid pro quo) and they can?t have
unspent funds returned or enter into anything that resembles a
cost-reimbursable agreement.  But the IRS is much more fuzzy about what
can be considered a gift than you might think.  For tax purposes, a
charitable donation gets the same tax breaks for gift as they do ?grant.?
In other words, a ?grant? can be a gift or a sponsored project depending
on the terms of the grant.  If there is anything that goes beyond the
general ?gee, we?d like to know how your research progresses and how you
used the funds? then it probably can?t be considered a gift.

But you?re dreaming if you think that gifts don?t have ANY strings at all
and that there are never any limits on how the gift funds can be spent.
Since the Sarbanes-Oxley Act of 2002 everyone is including some parameters
on ?gifts.?  The accepted definition of a gift is now is when you receive
something that has value (including cash) and you are not required to
deliver anything in return of economic value.  But a gift can include
specifications that the funds must be dispersed according to the donor?s
wishes.

When I asked one of the larger foundations how we should handle their
grants, (as gifts or sponsored projects) they said it didn?t matter at all
to them, since it was a tax deduction either way.  It only depended on our
policy.

So I don?t think I could answer Lori?s original question so easily.

Joanne K. Altieri, Director
Office of Sponsored Programs Administration
1138 Pearson Hall
Iowa State University
Ames, IA 50011-2207
Phone:  (515) 294-7723
Fax:  (515) 294-8000
Email:  xxxxxx@iastate.edu

From: Research Administration List [mailto:xxxxxx@hrinet.org] On Behalf
Of Jeffrey Ritchie
Sent: Wednesday, August 13, 2008 2:25 PM
To: xxxxxx@hrinet.org
Subject: Re: [RESADM-L] IRS determination that grants over $5,000 are
donations

This is not correct.  To be deemed a donation (or gift), the eventual use
of the funds would have to be at the complete discretion of the recipient.
 As we all know, grant funds may only be spent for the purposes specified
in the grant application and any deviation from that purposes must be
approved in advance by the sponsor.

Jeffrey Ritchie
Grants Management Analyst
Aurora Health Care
3033 S. 27th Street; Ste 100
Milwaukee, WI 53215
(414) 385-2883

Lori Hulak <xxxxxx@JCHS.EDU>
Sent by: Research Administration List <xxxxxx@hrinet.org>
08/13/2008 02:17 PM

Please respond to
Research Administration Discussion List <xxxxxx@hrinet.org>

To
xxxxxx@hrinet.org
cc

Subject
[RESADM-L] IRS detemination that grants over $5,000 are donations

Research Administrators -

Does your institution report all grants and contracts over $5,000 as
donations on their IRS reports?

"In the IRS's eyes, grants are donations and must be reported."  - is this
a true statement?

Thanks,

Lori

Lori B. Hulak, BA, CRA
Specialist, Grant Writer
Jefferson College of Health Sciences
920 S. Jefferson Street
Roanoke, VA 24031-3186
Phone (540) 985-8206
xxxxxx@jchs.edu

======================================================================
Instructions on how to use the RESADM-L Mailing List, including
subscription information and a web-searchable archive, are available
via our web site at http://www.hrinet.org (click on "Listserv Lists")
======================================================================
======================================================================
Instructions on how to use the RESADM-L Mailing List, including
subscription information and a web-searchable archive, are available via
our web site at http://www.hrinet.org (click on "Listserv Lists")
======================================================================
======================================================================
Instructions on how to use the RESADM-L Mailing List, including
subscription information and a web-searchable archive, are available via
our web site at http://www.hrinet.org (click on "Listserv Lists")
======================================================================

======================================================================
 Instructions on how to use the RESADM-L Mailing List, including
 subscription information and a web-searchable archive, are available
 via our web site at http://www.hrinet.org (click on "Listserv Lists")
======================================================================

======================================================================
 Instructions on how to use the RESADM-L Mailing List, including
 subscription information and a web-searchable archive, are available
 via our web site at http://www.hrinet.org (click on "Listserv Lists")
======================================================================