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GrantProse, Inc., Newsletter
North Carolina's leading newsletter on grants
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Vol. 6, No. 7
| July 9, 2014
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Dear Colleagues,
In this issue, we discuss the difference between subawards and contracts. How you characterize pass-through funds and program-related costs can set you up for smooth financial sailing or headaches during a grant audit. We also include links to announcements and grant-related resources, and as always, two new funding opportunities. Be sure to download the complete list of current funding opportunities from our website, and follow us on Twitter for your daily Grant Alert. |
Subawards and Contracts: Know the Difference, Avoid the Pitfalls
By Rita Lewis
Subaward or contract? What's the difference, and why should you -- the grant writer, the grant winner, the grant manager -- care?
The distinction is one of the finer points about grants that everyone, sooner or later, needs to master. Whether you're involved with a large research grant or a small award from a community foundation, subawards and contracts play significant, but unique, roles that affect proposal writing, project management, and accounting.
The particulars
Simply put, subawards are program awards to subrecipients, and contracts are payments to contractors for goods or services. To elaborate...
OMB Circular A-133, the federal government's guidance on the matter, groups subrecipients with award recipients. Like grant recipients, subrecipients measure performance against program objectives, comply with award requirements, use funds to carry out program activities, and make programmatic decisions. Collaborating partners often receive subawards to carry out grant activities for the applicant.
Contractors, on the other hand, provide goods and services "that are ancillary" to program operations. Contractors are not subject to compliance requirements of the grant. There is more distance in this relationship, often characterized as procurement.
The Environmental Protection Agency provides several examples of subawards vs. contracts in this PDF.
- If State University gives funds to City College to conduct a research project, it's a subaward -- City is making decisions about how to design and conduct the research. But if State pays City to review research studies that State selects, it's a contract -- City is simply providing a service, not making programmatic decisions.
- Paying an accountant for payroll services is a contract; the accountant provides support for the grant program, but isn't directly involved in program activities, and operates in a "competitive environment."
The pitfalls
What if you name someone a contractor when they're actually a subaward recipient, or vice versa? Is that so bad? According to the Federal Assistance Law Division, it is: misclassification can result in disallowed costs and unnecessary audits. The Office of Sponsored Programs at Oregon State University warns its grant recipients that improper distribution of funds to outside entities could lead to disapproval of its procurement system, more frequent audits, or perhaps even loss of an award. What if an alert reviewer spots mistakes in your grant proposal, or your budget? Grant competitions are so fierce that you can't afford mistakes. If the request for proposals is unclear, call a program officer for clarification. It's on you
A few points to remember: - A subaward is "under" the main grant award; the grant recipient receives the funds and passes them through to the subrecipient.
- A contractor provides goods or services to the grant recipient, and a subcontractor provides goods or services to the contractor. To avoid confusion, don't misuse the terms.
- As the White House OMB circular points out, the "substance of the relationship is more important than the form of the agreement," and grant recipients must sometimes make a judgment call about whether to employ a subaward or a contract.
For more guidance on subawards and contracts, see OMB Circular A-110, and guidelines from NC State University and the National Institutes of Health. |
Announcements Awards, events, training opportunities
2014 Nonprofit Conference
The NC Center for Nonprofits -- dedicated to nonprofit advocacy and capacity building -- will hold is 2014 Statewide Conference September 18 and 19 at the Sheraton Hotel in Research Triangle Park (Morrisville, NC). Sessions will cover nonprofit professional development, accessing capital, using data, nonprofit sustainability, and more, and participants will have opportunities to connect with grantmakers and "curbside consultants." Visit the center's website for registration information.
Webinars for Beginning Grant Writers
On July 9 (that's today!) the Foundation Center discusses Grantseeking Basics from 1:00 to 2:00 pm EDT: preparing to apply for grants, the grantseeking process, grantmakers, and tools and resources. On July 10 (that's tomorrow!) CharityHowTo offers Tips and Tricks for a Successful Grantseeking Strategy, covering funding research and writing grant applications. On July 15, Network for Good presents Getting Started with Grants: Make Your Requests Shine, with tips for writing compelling letters of inquiry and grant proposals.
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Resources News you can use
The State of Grantseeking
Semiannually, GrantStation conducts an informal survey of nonprofits on grantseeking in the U.S. The Spring 2014 State of Grantseeking Report offers key findings on trends and such indicators as who seeks and relies on grant funding, sources of funding, and sizes of awards. The 2014 report reveals that, during the survey period, 10% fewer organizations relied on grant funding for the bulk of their annual budgets, 44% of respondents applied for more grants, and the median size of the largest grant increased by 2%. To read the entire report, download the PDF.
Nonprofit Resources
Non-Profit Guides, a website volunteer project, provides a number of grant-writing guidelines for nonprofits, covering preliminary proposals, letters of inquiry, and full proposals. The site also provides sample proposals and RFPs, as well as links to grantmakers, other grant-seeking resources, and glossaries.
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Grant Alerts Now updated on the GrantProse website
The sooner you know about a new grant, the more time you have to write the proposal! Visit our Grant Alerts webpage to view the latest funding opportunities, including the two below. We also post new Alerts several times a week on Twitter, and smaller grants on our Community page.
NEW
Deadline: 08/07/14 Program: Grants for Adaptive Sports Programs for Disabled Veterans and Members of the Armed Forces Agency: U.S. Department of Veterans Affairs
Description: Grants enabling adaptive sports activities for disabled veterans and disabled members of the Armed Forces Award Amount: $10,000 - $500,000 Website: Department of Veterans Affairs Eligibility: Local, tribal, and state governments; nonprofits; independent school districts; institutions of higher education; adaptive sports entities
NEW Deadline: 10/07/14 Program: Air Pollution Monitoring for Communities Agency: Environmental Protection Agency Description: Funding for research on empowering communities and individuals to take action to avoid air pollution exposure Award Amount: Up to $750,000 Website: EPA Eligibility: nonprofits (including institutions of higher education and hospitals); state, local and tribal governments
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GrantProse, Inc., assists institutions, agencies, and organizations in expanding fiscal resources and program operations, helping them locate and secure grant funds matched to their interests and needs. Please forward this email to colleagues using the link at the top right, and join us in social media to help us spread this valuable information.
We welcome feedback from our readers! Email questions and comments to Rita Lewis, newsletter editor.
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