Hi everyone,
There are lots of discussions about the differences of gifts and grants and when to classify each. We recently put together a checklist that can help determine if funding should be considered a gift or grant, but the funding received is a bit more complex. It seems it act like DAF gift, but all documentation is reading as a grant.
the funder is from a Community Foundation; however, they also maintain donor-advised funds. The paperwork reads the donors to this fund have already received a tax acknowledgement for their gift; please do not issue a tax acknowledgement to the recommending donors. Should you choose to send a thank you letter send it to the following....Typically this seems as a DAF and typically would classify as a gift.
It also came with a separate Grant Terms and Conditions page with many bullet points, some of them are as follows:
- Grantee will utilize funding only for charitable purposes detailed above and/or in the grant award notification letter.
- Grantee certifies that no tangible benefit, goods, or services (including dinners, tickets, seating, etc.) were or will be received by any individual or entities connected with the Fund
- Any unused portion of the Foundation grant funding must be returned to the Foundation upon completion of the grant term. Unless otherwise specified, the grant term is one calendar year following the date of the grant check. This is not applicable to grants provided for general operating support.
- Grantee certifies that the Foundation may publicly announce the award in any fashion, including through the use of photos taken at events hosted by the Foundation and its affiliates. The grantee will acknowledge support in all publicity, exhibits, and publications....
- The Foundation reserves the right to terminate this grant should the Grantee fail to comply with the terms and conditions of this agreement.
- Grantee agrees to notify the Foundation of any change in tax-exempt status or in its inability to execute the grant and use grant funds for the stated purpose of this grant.
If this is categorized as a grant, Finance will not recognize the funds until they are expensed, whereas if this was classified as a gift, the contribution is recognized immediately.
I appreciate any thoughts or input? I have heard this could be classified as a gift, and the "Grant terms and conditions" are just considered as donor restrictions for the gift, and others believe this is a grant based on the language and some of the very specific Grant Terms and Conditions letter.
Thanks for your feedback in advance,
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Anna Simons
The Community Solution Education System
asimons@tcsedsystem.edu------------------------------