I do not know the answer to John Stokes' inquiry about regs, but
could the difficulty be a lack of definition of what is a sponsored program
(and administered by the university sponsored programs office) and what is
charitable giving (to be administered by the development
office/foundation)?  We are in the process of defining these terms and
developing appropriate policy at the College of Charleston so I'm happy to
share what I have learned thus far.

 Several years ago, NCURA Region III did a session on "Working with the
Development Office."  They distributed sample policies from a number of
large and small institutions.  Most institutions seem to agree that
awards which meet meet one or more of the following criteria should be
handled by the university sponsored programs office:

 - If sponsor is a governmental entity (includes governmental flow-thru
funds)
 - If the sponsor is private and gives gives the funds as a grant
for purposes other than endowment, professorships, fellowships,
scholarships, building construction/renovation or equipment
 - If the award is a contract, cooperative agreement, consortium
agreement, subgrant, subcontract, or P.O.
 - If funds are awarded following a competitive bid process
 - If funds are to match a government funded project (including
flow-thrus)
 - If funds are awarded for the purposes of research, model project,
program development/operation, curriculum development, training, community
service, planning, or some other specific activity
 - If funds are provided to cover a specific scope or work or to provide a
specific product, service, or other deliverable or outcome within a
specified period of time
 - If the sponsor identifies a technical monitor for the project
 - If the sponsor imposes publication restrictions and/or requires
conveyance of rights to tangible or intangible property
 - If the funded activity involves humans in research, animals, radiation
hazards, biohazards or R-DNA
 - If the PI/Project Director has a potential financial conflict of
interest with the sponsor
 - If the sponsor will have access to university facilities or other
university resources
 - If the sponsor specifies how funds are to be used or includes a line
item budget that identifies expenses by activity, function, or project
period
 - If the project will involve regular payment of employees (from
sponsor funds) through a payroll system
 - If the sponsor will pay full indirect costs base on the university's
negotiated rate
 - If the sponsor requires detailed financial reports and/or invoices
 - If funds are collected from the sponsor on a cost reimbursement basis
contingent upon programmatic and fiscal reporting
 - If the sponsor requires return of unexpended funds at the close of the
project
 - If the sponsor specifies audit requirements as a condition of award
 - If the sponsor stipulates other terms and conditions of award dealing
with such topics as compliance with federal or state regulations, allowable
and unallowable costs, subcontracting, insurance, warranties,
indemnification or hold harmless requirements, protection of proprietary or
confidential information, modifications, penalties, remedies, termination,
applicable governing law, and assignment

 You may wonder what this leaves for the Development Office.  From the
policies I've reviewed, there is fairly general agreement that the
Development Office gets funds which:

 - are referred to by the donor as a gift, bequest, donation, or
contribution
 - are given for an unrestricted purpose or for sponsoring such activities
as endowments (eminent scholars, endowed chairs, professorships),
capital projects (construction or renovation, equipment), or general
student financial assistance (fellowships, scholarships)
 - carry no contractual requirements, written or oral
 - requrire only minimal reporting to the sponsor in the form of a general
statement of how funds were used
 - are awarded irrevocably

 If such definitions are implemented, then all of what we research
administrators collectively refer to as "grants & contracts" will fall
within the purview of the sponsored programs office and will be treated
alike.  This should at least work for those of us who are in institutions
that do not have a separate research foundation.  Perhaps some of the
list members at institutions which have affiliated research foundations
could comment on how these research foundations are organized and
how they interface with the sponsored programs and development offices.

Barbara H. Gray                                       xxxxxx@cofc.edu
Director of Sponsored Programs                        Phone:  (803) 953-5673
University of Charleston, SC                          FAX:    (803) 953-1434
66 George Street
Charleston, SC 29424-0001