Gifts and sponsored projects
The Northern Arizona University Foundation is a 501(c)(3)
non-profit organization working to advance the teaching, research, and public
service endeavors of Northern Arizona University by generating private contributions
to supplement the university's state and federal revenues for capital,
operating, and student assistance funds.
The Northern Arizona University Foundation is the catalyst
and conduit through which gifts and endowment income flow to provide immediate
and long-term support for the University and all of its programs.
Northern Arizona University is an instrumentality of the
State of Arizona and, as such, is also exempt from federal income taxes under
Internal Revenue Service Code (IRC) (26 U.S.C. § 115). While the university is
not directly covered under IRC § 501 (c) (3), the university is eligible to
receive charitable contributions pursuant to IRC § 170.
Grant proposals to non-profit sponsors should be submitted
through the university; in some cases, however, sponsored project proposals may
be required to be submitted through the NAU Foundation if the sponsor
stipulates 501(c)(3) status.
What is a gift?
A gift is a charitable contribution of cash, in-kind goods,
or services made to the university, generally from the private sector. Gifts
are philanthropic and charitable in intent, and often require long-term
cultivation of a prospect. All gifts to Northern Arizona University are administered
through the NAU Foundation with assistance from the Office of University Advancement.
Typically, gift proposals will not require detailed budgets,
specific deliverables, or intellectual property or confidentiality terms. In
general, gifts to the NAUF are irrevocable— there is no timeline for
expenditure of funds and unused funds remain the property of the university.
Contractual requirements are not imposed, nor is formal financial accounting required.
What is a sponsored project?
The term “sponsored project” is synonymous for:
- cooperative agreement
- purchase order
Funding for sponsored projects may be received from individuals,
corporations, foundations, and/or governmental entities (federal, state, local
or tribal government). Sponsored project awards often contain complex
requirements related to:
- intellectual property
- insurance and indemnification provisions
- return of unused funds
- other matters that establish a quid pro quo
relationship with the grantor
Proposals generally are submitted through a formal Request
for Proposal (RFP) process and have significant auditing and/or reporting
requirements. All grant awards to Northern Arizona University are administered
by the Office of Grant and Contract Services (OGCS) with assistance from Sponsored
Projects Services (SPS).
Proposals to all local, state, tribal, or federal government
agencies, including government established foundations (such as the National
Endowment for the Arts and the National Science Foundation), automatically fall
within the purview of OGCS. Additionally, all proposals to contractors or
grantors in the private sector (i.e., corporations and foundations) requiring
specific performance objectives, detailed expenditure reporting, intellectual
property, or confidentiality terms will be handled by OGCS.
The FAQ section and the Proposal Development and Submission
flowchart should help answer additional questions you may have about proposal submissions.
If, after reviewing these documents, you still have questions about your
proposal, please contact the Office of Grant and Contract Services at 523-4880
or the NAU Foundation/Office of University Advancement at 523-2012.
Frequently asked questions
1. When is a proposal submitted through the NAU Foundation (NAUF) vs. the
Office of Grant and Contract Services (OGCS)?
All gift proposals will be submitted through the NAU Foundation
(NAUF). All sponsored project proposals will be submitted through OGCS unless a
foundation explicitly requests submissions from a 501(c)(3) entity. In these
cases, the NAUF and OGCS will work with the university investigator to
determine submission requirements and allowable costs; the principal
investigator will work primarily with OGCS Grant and Contract Administrators to
prepare the proposal, following regular OGCS procedures, including completion
of the Proposal Approval Form. A cover letter from NAUF will be sent in lieu of
the standard OGCS cover letter. After the award is received and accepted by the
NAUF, the funds will be transferred to the university and a sponsored project
account will be established for the project.
2. How do you know whether or not a grant-giving organization requires 501
Information about a grant-giving organization’s requirements
is often listed on their website or in printed materials. If the information is
not posted on the website, you should work with your OGCS Grant and Contract
Administrator and College Development Officer to determine the submission
3. What happens when a grant-giving organization requires a non-profit
status, but not necessarily a 501(c)(3)?
As a state supported educational institution, Northern
Arizona University is considered a “not-for-profit” organization. This general
status differs from the NAU Foundation’s 501(c)(3) tax-exempt status. Many foundations
that support universities do not require 501(c)(3) tax-exempt status. If a
grant-giving organization does not require 501(c)(3) status, the proposal will
be submitted by the university and the project administered by OGCS.
4. What are indirect costs and how are they handled with OGCS vs. NAUF?
Indirect costs support the expense of university
infrastructure, overhead, and budget administration. Proposers should request
full reimbursement for the university’s allowable indirect costs, unless the
sponsor has stipulated a different rate. While very few organizations refuse to
pay any indirect costs, their allowable rates may be lower than the university’s
approved rates. If the rate given by the sponsor is lower than the university’s
approved rates, the university will accept the sponsor’s rate, as determined
from website information as well as direct conversation with the sponsor.
Effective February 6, 2009, a new fee schedule was
implemented by the NAU Foundation that stipulates a sliding scale reinvestment fee for all new
restricted and unrestricted gifts (that is, all non-endowed funds) received by
the NAU Foundation. The fee is assessed at the time the gift is received. The
fee may not be waived except by the Foundation Board of Directors. If a project
director/principal investigator wishes the foundation to accept a gift from a
donor who refuses to pay a fee, the unit receiving the gift will reimburse the
foundation for the fee. Prior to submission of any proposal, the project
director/principal investigator should review sponsor policies regarding fee
assessment or indirect costs.
5. What if there is no policy on the part of a foundation regarding
It’s a misconception that foundations do not pay indirect
costs. Most foundations understand that these are real costs incurred by
grantees and allow limited and/or full recovery of these costs. Either OGCS or
NAUF will contact the sponsor to request a copy of their policy if none is
published on the sponsor’s web page. If the sponsor does not have a policy, the
Foundation will request indirect cost reimbursement based on the sliding scale
discussed above and the university will request its fully allowable indirect