FundSvcs Community

Aloha fellow listers, I have two questions regarding grants for which I couldn't find the answer in our CASE Reporting Standards. Firstly, in many of the grant agreements we receive, the grantor foundation includes a clause stating that if funds go unspent (for whatever reason), that the grantee is obligated to return the remainder to the grantor foundation. Is this an exercise in donor control that disqualifies the funds from being counted as gift? Secondly, we're currently drafting a gift agreement with a donor organization for which no grant proposal was submitted that would typically categorize the award as a specific grant (so, from that definition it's a nonspecific grant). Yet, the donor organization is imposing reporting requirements upon us for how the funds are used (i.e. how many graduate students received the tuition assistance, how much, and when, etc.) which is typical of a specific grant. I'm not sure what to call this, nor how to categorize it in our database. And another monkey wrench,... yes, in this agreement the donor has a conditional revocability clause asking for 50% of the funds back if the qualifying condition is invoked. I was prepared to state that this particular gift wouldn't be countable for CASE/CAE because the clause is a disqualifying instance of donor control, but if it's allowed as a clause typically requested by grantors, why would we object here? Thanks, Eric Eric F. Valdescaro AVP, Advancement Services University of Hawaii Foundation

We have actually discussed this before. To your first item, if the funds are spent then there is a gift you can count because those cannot be returned. I simply ask the recipient department to send me a summary each quarter indicating what was spent and enter a gift for that amount. I personally have never worried about whether a grant was specific or non-specific. The VSE does not care at all. It's a grant. The end! As to the return of funds, this is far different than returning unspent funds. Here you have to return the money (well, 50%) if they don't think you met THEIR condition. So yes, it is revocable until the condition is met and therefore I do not think you should count anything (or at least only 50%) until the qualifying conditions are met. John John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Mon, Mar 4, 2019 at 7:17 PM Eric Valdescaro < eric.valdescaro@uhfoundation.org> wrote: > Aloha fellow listers, > > I have two questions regarding grants for which I couldn't find the answer > in our CASE Reporting Standards. > > Firstly, in many of the grant agreements we receive, the grantor > foundation includes a clause stating that if funds go unspent (for whatever > reason), that the grantee is obligated to return the remainder to the > grantor foundation. Is this an exercise in donor control that disqualifies > the funds from being counted as gift? > > Secondly, we're currently drafting a gift agreement with a donor > organization for which no grant proposal was submitted that would typically > categorize the award as a specific grant (so, from that definition it's a > nonspecific grant). Yet, the donor organization is imposing reporting > requirements upon us for how the funds are used (i.e. how many graduate > students received the tuition assistance, how much, and when, etc.) which > is typical of a specific grant. I'm not sure what to call this, nor how to > categorize it in our database. And another monkey wrench,... yes, in this > agreement the donor has a conditional revocability clause asking for 50% of > the funds back if the qualifying condition is invoked. I was prepared to > state that this particular gift wouldn't be countable for CASE/CAE because > the clause is a disqualifying instance of donor control, but if it's > allowed as a clause typically requested by grantors, why would we object > here? > > > Thanks, > Eric > > Eric F. Valdescaro > AVP, Advancement Services > University of Hawaii Foundation >

This is something you will need to work out with your CFO. I have worked with several organizations where, given the prior track-record working on projects with the same sponsor, no money has ever been returned. And so based on prior history the CFO has felt comfortable recording the full amount as a gift/grant upon receipt. But when there is no track-record - or the track record suggests a consistent return of funds, nothing is countable in the advancement system until the money has been spent. However you want to work out the reporting on those expenditures is up to you but it's not a countable grant until the money has been irrevocably committed (spent). In these case, I record *nothing* in my system until I am notified funds have been irrevocably spent. Where and how the unspent funds are credited on the accounting side is for them to determine. John John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Mon, Mar 4, 2019 at 8:11 PM Eric Valdescaro < Eric.Valdescaro@uhfoundation.org> wrote: > HI John, > > > > Thanks for your responses. So I understand your response to the second > question, but I have some follow up on the first. > > > > So when the check for the grant arrives, how would you record it in your > system? As other revenue? Also, what if the check arrives in one FY, but > the money isn’t spent by the department until a subsequent FY? Are the > funds counted at the respective amounts spent in the FY’s they were spent? > > > > I’m just trying to imagine how we would capture this one grant and it’s > total amount in our system if we should only enter the gifts piecemeal as > the department allocations are spent. Sorry, perhaps I’m overlooking > something in your explanation. > > > > Thanks again, > > Eric > > > > > > *From:* Advancement Services Discussion List [mailto: > FUNDSVCS@LISTSERV.FUNDSVCS.ORG] *On Behalf Of *John Taylor > *Sent:* Monday, March 4, 2019 2:24 PM > *To:* FUNDSVCS@LISTSERV.FUNDSVCS.ORG > *Subject:* Re: [FUNDSVCS] Grants (2 questions) > > > > We have actually discussed this before. > > > > To your first item, if the funds are spent then there is a gift you can > count because those cannot be returned. I simply ask the recipient > department to send me a summary each quarter indicating what was spent and > enter a gift for that amount. > > > > I personally have never worried about whether a grant was specific or > non-specific. The VSE does not care at all. It's a grant. The end! > > > > As to the return of funds, this is far different than returning unspent > funds. Here you have to return the money (well, 50%) if they don't think > you met THEIR condition. So yes, it is revocable until the condition is > met and therefore I do not think you should count anything (or at least > only 50%) until the qualifying conditions are met. > > > > John > > > > John H. Taylor > > Principal, John H. Taylor Consulting > > 2604 Sevier St. > > Durham, NC 27705 > > johntaylorconsulting@gmail.com > > 919.816.5903 (cell/text) > > > > Serving the Advancement Community Since 1987 > > > > > > On Mon, Mar 4, 2019 at 7:17 PM Eric Valdescaro < > eric.valdescaro@uhfoundation.org> wrote: > > Aloha fellow listers, > > I have two questions regarding grants for which I couldn't find the answer > in our CASE Reporting Standards. > > Firstly, in many of the grant agreements we receive, the grantor > foundation includes a clause stating that if funds go unspent (for whatever > reason), that the grantee is obligated to return the remainder to the > grantor foundation. Is this an exercise in donor control that disqualifies > the funds from being counted as gift? > > Secondly, we're currently drafting a gift agreement with a donor > organization for which no grant proposal was submitted that would typically > categorize the award as a specific grant (so, from that definition it's a > nonspecific grant). Yet, the donor organization is imposing reporting > requirements upon us for how the funds are used (i.e. how many graduate > students received the tuition assistance, how much, and when, etc.) which > is typical of a specific grant. I'm not sure what to call this, nor how to > categorize it in our database. And another monkey wrench,... yes, in this > agreement the donor has a conditional revocability clause asking for 50% of > the funds back if the qualifying condition is invoked. I was prepared to > state that this particular gift wouldn't be countable for CASE/CAE because > the clause is a disqualifying instance of donor control, but if it's > allowed as a clause typically requested by grantors, why would we object > here? > > > Thanks, > Eric > > Eric F. Valdescaro > AVP, Advancement Services > University of Hawaii Foundation > > This message (including any attachments) is covered by the Electronic > Communications Privacy Act, 18 U.S.C. 2510-2521. It is the property of the > University of Hawaii Foundation. It may contain confidential information > intended for a specific individual and purpose. If you are not the > intended recipient, you must delete this message. You are hereby notified > that any disclosure, copying, or distribution of this message is > prohibited. >

HI John, Thanks for your responses. So I understand your response to the second question, but I have some follow up on the first. So when the check for the grant arrives, how would you record it in your system? As other revenue? Also, what if the check arrives in one FY, but the money isn’t spent by the department until a subsequent FY? Are the funds counted at the respective amounts spent in the FY’s they were spent? I’m just trying to imagine how we would capture this one grant and it’s total amount in our system if we should only enter the gifts piecemeal as the department allocations are spent. Sorry, perhaps I’m overlooking something in your explanation. Thanks again, Eric From: Advancement Services Discussion List [mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG] On Behalf Of John Taylor Sent: Monday, March 4, 2019 2:24 PM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG Subject: Re: [FUNDSVCS] Grants (2 questions) We have actually discussed this before. To your first item, if the funds are spent then there is a gift you can count because those cannot be returned. I simply ask the recipient department to send me a summary each quarter indicating what was spent and enter a gift for that amount. I personally have never worried about whether a grant was specific or non-specific. The VSE does not care at all. It's a grant. The end! As to the return of funds, this is far different than returning unspent funds. Here you have to return the money (well, 50%) if they don't think you met THEIR condition. So yes, it is revocable until the condition is met and therefore I do not think you should count anything (or at least only 50%) until the qualifying conditions are met. John John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com<mailto:johntaylorconsulting@gmail.com> 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Mon, Mar 4, 2019 at 7:17 PM Eric Valdescaro <eric.valdescaro@uhfoundation.org<mailto:eric.valdescaro@uhfoundation.org>> wrote: Aloha fellow listers, I have two questions regarding grants for which I couldn't find the answer in our CASE Reporting Standards. Firstly, in many of the grant agreements we receive, the grantor foundation includes a clause stating that if funds go unspent (for whatever reason), that the grantee is obligated to return the remainder to the grantor foundation. Is this an exercise in donor control that disqualifies the funds from being counted as gift? Secondly, we're currently drafting a gift agreement with a donor organization for which no grant proposal was submitted that would typically categorize the award as a specific grant (so, from that definition it's a nonspecific grant). Yet, the donor organization is imposing reporting requirements upon us for how the funds are used (i.e. how many graduate students received the tuition assistance, how much, and when, etc.) which is typical of a specific grant. I'm not sure what to call this, nor how to categorize it in our database. And another monkey wrench,... yes, in this agreement the donor has a conditional revocability clause asking for 50% of the funds back if the qualifying condition is invoked. I was prepared to state that this particular gift wouldn't be countable for CASE/CAE because the clause is a disqualifying instance of donor control, but if it's allowed as a clause typically requested by grantors, why would we object here? Thanks, Eric Eric F. Valdescaro AVP, Advancement Services University of Hawaii Foundation This message (including any attachments) is covered by the Electronic Communications Privacy Act, 18 U.S.C. 2510-2521. It is the property of the University of Hawaii Foundation. It may contain confidential information intended for a specific individual and purpose. If you are not the intended recipient, you must delete this message. You are hereby notified that any disclosure, copying, or distribution of this message is prohibited.

Hi John, Got it, thank you much! Best, Eric From: Advancement Services Discussion List [mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG] On Behalf Of John Taylor Sent: Monday, March 4, 2019 3:33 PM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG Subject: Re: [FUNDSVCS] Grants (2 questions) This is something you will need to work out with your CFO. I have worked with several organizations where, given the prior track-record working on projects with the same sponsor, no money has ever been returned. And so based on prior history the CFO has felt comfortable recording the full amount as a gift/grant upon receipt. But when there is no track-record - or the track record suggests a consistent return of funds, nothing is countable in the advancement system until the money has been spent. However you want to work out the reporting on those expenditures is up to you but it's not a countable grant until the money has been irrevocably committed (spent). In these case, I record nothing in my system until I am notified funds have been irrevocably spent. Where and how the unspent funds are credited on the accounting side is for them to determine. John John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com<mailto:johntaylorconsulting@gmail.com> 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Mon, Mar 4, 2019 at 8:11 PM Eric Valdescaro <Eric.Valdescaro@uhfoundation.org<mailto:Eric.Valdescaro@uhfoundation.org>> wrote: HI John, Thanks for your responses. So I understand your response to the second question, but I have some follow up on the first. So when the check for the grant arrives, how would you record it in your system? As other revenue? Also, what if the check arrives in one FY, but the money isn’t spent by the department until a subsequent FY? Are the funds counted at the respective amounts spent in the FY’s they were spent? I’m just trying to imagine how we would capture this one grant and it’s total amount in our system if we should only enter the gifts piecemeal as the department allocations are spent. Sorry, perhaps I’m overlooking something in your explanation. Thanks again, Eric From: Advancement Services Discussion List [mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG>] On Behalf Of John Taylor Sent: Monday, March 4, 2019 2:24 PM To: FUNDSVCS@LISTSERV.FUNDSVCS.ORG<mailto:FUNDSVCS@LISTSERV.FUNDSVCS.ORG> Subject: Re: [FUNDSVCS] Grants (2 questions) We have actually discussed this before. To your first item, if the funds are spent then there is a gift you can count because those cannot be returned. I simply ask the recipient department to send me a summary each quarter indicating what was spent and enter a gift for that amount. I personally have never worried about whether a grant was specific or non-specific. The VSE does not care at all. It's a grant. The end! As to the return of funds, this is far different than returning unspent funds. Here you have to return the money (well, 50%) if they don't think you met THEIR condition. So yes, it is revocable until the condition is met and therefore I do not think you should count anything (or at least only 50%) until the qualifying conditions are met. John John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com<mailto:johntaylorconsulting@gmail.com> 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Mon, Mar 4, 2019 at 7:17 PM Eric Valdescaro <eric.valdescaro@uhfoundation.org<mailto:eric.valdescaro@uhfoundation.org>> wrote: Aloha fellow listers, I have two questions regarding grants for which I couldn't find the answer in our CASE Reporting Standards. Firstly, in many of the grant agreements we receive, the grantor foundation includes a clause stating that if funds go unspent (for whatever reason), that the grantee is obligated to return the remainder to the grantor foundation. Is this an exercise in donor control that disqualifies the funds from being counted as gift? Secondly, we're currently drafting a gift agreement with a donor organization for which no grant proposal was submitted that would typically categorize the award as a specific grant (so, from that definition it's a nonspecific grant). Yet, the donor organization is imposing reporting requirements upon us for how the funds are used (i.e. how many graduate students received the tuition assistance, how much, and when, etc.) which is typical of a specific grant. I'm not sure what to call this, nor how to categorize it in our database. And another monkey wrench,... yes, in this agreement the donor has a conditional revocability clause asking for 50% of the funds back if the qualifying condition is invoked. I was prepared to state that this particular gift wouldn't be countable for CASE/CAE because the clause is a disqualifying instance of donor control, but if it's allowed as a clause typically requested by grantors, why would we object here? Thanks, Eric Eric F. Valdescaro AVP, Advancement Services University of Hawaii Foundation This message (including any attachments) is covered by the Electronic Communications Privacy Act, 18 U.S.C. 2510-2521. It is the property of the University of Hawaii Foundation. It may contain confidential information intended for a specific individual and purpose. If you are not the intended recipient, you must delete this message. You are hereby notified that any disclosure, copying, or distribution of this message is prohibited. This message (including any attachments) is covered by the Electronic Communications Privacy Act, 18 U.S.C. 2510-2521. It is the property of the University of Hawaii Foundation. It may contain confidential information intended for a specific individual and purpose. If you are not the intended recipient, you must delete this message. You are hereby notified that any disclosure, copying, or distribution of this message is prohibited.