Unlike a formula grant, a discretionary grant awards funds on the basis of a competitive process. The funding agency reviews applications in light of the legislative and regulatory requirements established for a program. This review process gives the funding agency discretion to determine which applications best address the program requirements and are, therefore, most worthy of funding.
A cooperative agreement is a type of discretionary grant a funding agency awards when it determines that substantial involvement with the grantee is necessary during the performance of a funded project. Substantial involvement might include such things as ongoing funding agency participation in the project, unusually close collaboration with the recipient, and/or possible intervention or direct operational involvement in the review and approval of the successive stages of project activities.
The federal government distinguishes between grants and contracts on the basis of whether the award is considered assistance (grant) or procurement (contract). If the sponsor, whether government or private, has no substantial involvement in the work, the legal instrument used to award funds is generally referred to as a grant, and normally given without expectation of delivery of a specified product or service (other than progress reports). Most applications for grant support originate with an individual investigator who develops a proposed plan for a project or research within a sponsor's area of interest.
A contract is a written agreement and is enforceable by law. The principal purpose of a contract is support of a project (such as research and development, goods or services) for the direct benefit of the sponsor. Generally, there is substantial involvement by the sponsor, in defining the statement of work.
A foundation is an entity that is established as a nonprofit corporation or a charitable trust, with a principal purpose of making grants to unrelated organizations or institutions or to individuals for scientific, educational, cultural, religious, or other charitable purposes. This broad definition encompasses two foundation types: private foundations and public foundations. The most common distinguishing characteristic of a private foundation is that most of its funds come from one source, whether an individual, a family, or a corporation. A public foundation, in contrast, normally receives its assets from multiple sources, which may include private foundations, individuals, government agencies, and fees for service. Moreover, a public foundation must continue to seek money from diverse sources in order to retain its public status.
RFP stands for "Request for Proposal." When government offices issue a new contract or grant program, they send out RFP's to agencies that might be qualified to participate. The RFP lists project specifications and application procedures. While a few foundations occasionally use RFP's in specific fields, most prefer to consider proposals that are initiated by applicants.
For some programs, federal agencies publish funding priorities in the Federal Register to identify the activities that will be funded in a given year. Funding priorities are used as a way of focusing a competition on the areas in which the Secretary is particularly interested in receiving applications. The government uses three kinds of funding priorities in its programs: absolute, competitive, and invitational.
If the federal agency publishes an ‘‘absolute priority'' for a program, it will consider for funding only those applications that address that priority. For example, a published absolute priority to fund only projects that increase the amount of time students are engaged in the study of mathematics and science would mean that only those projects that are designed to achieve this result could potentially receive funding.
If a federal agency publishes ‘‘competitive priorities'' for a program, applicants addressing those priorities might receive additional points during the competitive review process for doing so.
If an agency publishes ‘‘invitational priorities'', it encourages applicants to address certain issues in their project design. However, an application that meets the priority receives no competitive or absolute preference over applications that do not meet the priority.
If you are considering submitting an application, be sure to read all the material in the application package carefully to identify any published priorities.
Although cost principles specifically apply to federal grants, the Office of Management and Budget (OMB) Circular A-21 (Cost Principles for Educational Institutions) is commonly used as the guiding principles for all grant programs. The tests for appropriateness under these principles are:
- Reasonableness: A cost may be considered reasonable if the nature of the expenditure and the amount involved reflects the action that a prudent person would take under the circumstances.
- Allocability: A cost is allocable if it is beneficial to the project.
- Consistency: Costs incurred for the same purpose in like circumstances must be treated consistently as either direct or facility and administrative (indirect) costs. The methods used to estimate, record, and report costs must be consistent.
- Allowability: Costs must be allowed in accordance with the principles in A-21 or the terms of the sponsored agreement.
- Conformity: All costs charged to sponsored agreements should conform to these principles and any specific conditions stated in the agreement.
Direct costs are costs that can be identified specifically with a particular project, an instructional activity, or any other institutional activity; or can be directly assigned to such activities relatively easily with a high degree of accuracy. Indirect costs are costs that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity.
Direct costs relate to the primary functions or cost objectives of instruction and department research, organized research, and public service. Indirect costs consist of expenses relating to the support of the primary functions, including academic administration; plant operations; administrative salaries and expenses of offices such as human resources, and purchasing; accounting and general expenses including insurance, taxes, campus security; and depreciation for use of buildings and equipment.
Circular A-21 states that the salaries and wages of administrative and clerical staff, and non-salary items such as postage for routine correspondence, local telephone calls (including equipment), and routine office supplies should normally be treated as administrative costs and are only appropriate if the purpose of such is for the sole direct benefit of the project. These costs qualify as direct costs when the nature of the work performed constitutes a major program or activity and the costs are specifically identified and justified in the proposal's budget and budget justification section. The costs must be easily identified to the project with a high degree of accuracy. A grant budget generally includes a charge for indirect cost recovery which is calculated by applying a pre-approved rate to most of the other budgeted (direct) costs.
Cost sharing is any portion of the total costs of a project or program not borne by the sponsor. Third party cash or in-kind contributions, may be acceptable when they are:
- Verifiable (documented);
- Not included as contributions for any other project;
- Necessary and reasonable to accomplish the project's objectives;
- Allowable under A-21;
- Not paid for by the sponsor under another award; and
- Provided for and stated in the approved award.
Generally, the sponsor's program announcement will contain any specific cost-sharing/matching requirements. CCPS considers any cost sharing that is set forth in the budget, or budget justification, and quantified to be mandatory cost sharing that will be tracked and reported to the sponsor.
There are two types of regulations to award and administer discretionary grants and cooperative agreements: program and administrative regulations. Program regulations are rules that apply to all applicants and/or grantees under a particular program. They implement legislation passed by Congress to authorize a specific program, and include applicant and participant eligibility criteria, nature of activities funded, allowability of certain costs, criteria under which applications will be selected for funding, and other relevant information.
Administrative regulations, on the other hand, apply to all grantees regardless of the program. They implement guidance from the Office of Management and Budget (OMB) contained in circulars, Presidential Executive Orders, and legislation that affects all applicants for, or recipients of, federal grants and cooperative agreements. One group of these administrative regulations is collectively known as EDGAR(Education Department General Administrative Regulations). The Grants Policy and Oversight Staff maintains EDGAR and ensures that program offices interpret and apply the regulations to their programs appropriately. The Department posts both program and administrative regulations on its Web site. In addition, new and amended program and administrative regulations issued by the Department and published throughout the year in the Federal Register are also posted on the Web site.
Various federal requirements are imposed on applicants and grantees as a condition of receiving grant funds. Application packages contain forms that an applicant is required to sign, promising to abide by various federal laws, regulations, and executive orders that apply to grantees. Certifications relate to issues such as maintaining a drug-free workplace. Assurances relate to issues such as complying with nondiscrimination laws. Some programs give funding to a grantee, who then distributes some of the money to other persons -- e.g., fellowship holders, contractors, and others. In these cases, grantees might be required to get certain forms signed by those persons as well.
The Superintendent signs these documents which assert that the school system is in compliance with a variety of federal and state regulations on an institutional level.
A school, office or individual should notify the Grants Office a minimum of two weeks prior to the deadline for submission of a proposal. If assistance will be required in writing the application, more time will likely be required. The budget must be submitted at least one week prior to the deadline.