UW Research
Policies, Procedures and Guidance

GIM 34 – Classification of External Support as Either a Sponsored program or as a Gift


Effective Date: April 29, 2020


External support is anything of economic value provided by a third party (either the “sponsor” in the case of sponsored programs or the “donor” in the case of gifts) as a gift or a sponsored program to the University of Washington (UW), the UW Foundation, or the UW’s affiliate entities.

External support may be awarded under a variety of labels, including gifts (restricted and unrestricted), grants, contracts, cooperative agreements, subawards, funded and unfunded collaboration agreements, master agreements, clinical trial agreements, corporate affiliate partnership programs, and other similar mechanisms.

This GIM describes the policies and standards used by the UW for classifying external support as either a sponsored program or a gift by all University campuses, colleges, schools, departments, and administrative units (benefiting units). Correct classification of external support assures the University’s ability to: (i) comply with requirements specified by the sponsor or donor; (ii) satisfy State of Washington reporting requirements; (iii) properly recover its costs, both direct and indirect; (iv) comply with the Government Accounting Standards Board (GASB), Financial Accounting Standards Board (FASB), Internal Revenue Service (IRS), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Chapter I, Chapter II, Part 200, Uniform Guidance), and other financial reporting standards, and (v) comply with applicable laws, regulations and University policies.

Not Covered

This GIM does not describe the policies and processes related to other types of funding to the University, such as service or recharge center revenue, program income, or departmental revenue from the sale of goods and services. For more information, see APS 59.5 and other resources.


As a governmental unit with a nonprofit foundation, the University must determine whether external funding is a sponsored program or a gift in order to properly spend, track, report, and account for it.

Persons/Offices Affected

Faculty, Staff, Office of Sponsored Programs (OSP), Advancement, Controller’s Office, UW Foundation, Internal Audit

University Policy

External support is given to the University, the UW Foundation, and the UW’s affiliate entities. As a public institution, and in accordance with state law, external support may not be offered to any University employee, officer, student, or agent for the individual’s personal use or for use by any other person or entity. Documentation stating the purpose and terms associated with the funding, award letter, or notification, and the proposal, if applicable, are required before any gift or sponsored program may be accepted and expended.

Occasionally, a single funder may seek to provide concurrent funding in the form of a gift and a sponsored program. Each type of external support must be reviewed independently and, if acceptable, processed separately.

Classification of external support is based on information conveyed to the University by the funder and the benefiting unit after applying relevant legal and accounting principles. Resources are available to the benefiting unit to help make a preliminary determination whether funding is a gift or a sponsored program.

Classification of External Support as a Sponsored Program

A sponsored program is a transaction between the University and the sponsor in which the sponsor supports a specific scope of work carried out by the University for organized research, instruction, or other sponsored activity in exchange for something of value such as data, results, intellectual property rights, and/or technical reporting.

Sponsors may provide funding, equipment, or other tangible items, such as goods or services, as a form of support. The sponsored program is memorialized in formal documentation between the University and the sponsor, typically as a grant, contract, cooperative agreement, incoming subaward, or award letter.

Sponsored programs typically include a scope of work and one or more of the following:

  • Budget information and payment terms tied to receipt of reports or other milestones
  • A requirement for technical reporting
  • Risk management, such as liability, indemnification, insurance or other contractual terms that establish acceptance of risk by the parties
  • Project Intellectual property (IP) ownership and related rights, consistent with GIM 40

The Office of Sponsored Programs reviews and processes sponsored program proposals and awards. When external support is determined to be a sponsored program, it must be routed to OSP via an eGC1.

Classification of External Support as a Gift

A gift is the contribution of external support to the University without any requirement for receipt of economic or other tangible benefit beyond what any member of the public would receive.
Gifts may be either unrestricted or restricted. An unrestricted gift may be used for any purpose or project. A restricted gift is for a particular purpose or project as stipulated by the donor.

In general, a gift has the following attributes:

  • Given for general activities such as endowments, capital projects, student financial support, or programmatic support
  • Irrevocable, provided the gift is used in accordance with any mutually agreed upon, valid restrictions
  • No donor-imposed time limits, though a general expectation of timing may be stated
  • The beneficiary of the supported endeavor is the general public, although the donor might receive de minimis benefits such as recognition and stewardship

Gifts cannot include:

  • Requirements for receipt of goods, services, or other deliverables
  • Pledge payments contingent on outcomes or reaching milestones
  • Detailed financial accountability (donors may request information about the impact of their support and a summary of expenditures)
  • Deliverables or benefits beyond that of reasonable recognition and stewardship (i.e., no quid pro quo)
  • Transfer of UW intellectual property, ownership, or related rights (In appropriate circumstances, the UW may agree to open-source software or intellectual property developed with gift funds.)
  • Insurance, indemnification, warranty or any other contractual term or condition that establishes financial or legal responsibilities and/or the acceptance of risk by the University
  • Restrictions on publication of research results
  • Requirement that if personnel working on the project leave or change, the funding is returned to the donor
  • Requirement that support be refunded if the project fails to meet performance requirements or project objectives

UW Advancement reviews and processes gifts for the University of Washington, the UW Foundation, and the UW’s affiliates and agencies. External support that is determined to be a gift must be processed through Gift Services.

Special Considerations for External Support

  • Past treatment of external support from a funder should not be a determining factor in the classification of new funding. Each new transaction should be viewed independently.
  • If external support can only be given to a 501(c)(3) organization but the award terms classify funding as a sponsored program, the Office of Corporate & Foundation Relations will work with the Office of Sponsored Programs before accepting an award to the UW Foundation.
  • If the “last to touch” funder (pass-through entities or previous touch points are not considered) is a US or foreign government agency, the funding is generally not treated as a gift.
  • A gift may be used as a match or for cost sharing in support of a sponsored program unless otherwise restricted by the donor or sponsor. In such instances, the gift funds may become held as restricted funds.
  • All regulatory requirements with respect to the conduct of research must be followed even when funded by a gift, including but not limited to Institutional Review Board for the Protection of Human Subjects, Institutional Animal Care and Use, Radiation Safety, Biosafety, and Disclosure of Significant Financial Interests. Review the Gift-Funded Research: Compliance Checklist
  • Inclusion or exemption of facilities and administrative (F&A) costs and/or gift assessments shall not be a basis for determining whether an award is classified as a sponsored program or gift.

Determination of External Funding Process

The following steps should be taken when determining whether funding is a sponsored program or a gift.

Level One

The benefiting unit makes an initial determination on whether the support should be considered a gift or a sponsored program. After reviewing all of the documentation, the benefiting unit routes it to the appropriate office.

Resources that may help make a determination:

Level Two

In complex cases, the Director of the Office of Sponsored Programs and the Associate Vice President of Advancement Operations will review the information and jointly make a determination.

Level Three

If the Director of the Office of Sponsored Programs and the Associate Vice President of Advancement Operations are unable to determine the classification, they will seek additional counsel within the UW to make a final determination.

Related Resources

Office of Sponsored Programs:

Change Notes

Details on changes to this GIM are available from the Office of Sponsored Programs, osp@uw.edu