The requirements in this document apply to awards issued by NEH that have a gifts-and-matching component, WITH THE EXCEPTION OF CHALLENGE GRANTS. Please refer to the terms and conditions and/or our written offer of matching funds to ensure that these requirements apply to your application or grant.

If you have questions concerning these grant requirements, they can be addressed to the Office of Grant Management specialist assigned to your grant, whose name appears in the award documents under "Endowment Administration of The Award." You can also reach the Office of Grant Management by telephone at 202/606-8494, by fax at 202/606-8633, or via the Internet at grantmanagement@neh.gov.

FEDERAL MATCHING FUND GUIDELINES

BACKGROUND

Individuals and organizations are encouraged to add their support to NEH sponsored projects. To stimulate private support for projects in the humanities, NEH offers potential donors the incentive of doubling the impact of their contributions by matching these contributions with federal funds. Federal matching funds may not be released before third-party gifts have been raised that meet the eligibility criteria set forth in these guidelines.

These guidelines do not apply to the NEH Challenge Grants Program. Please refer instead to the Challenge Grants Administrative Requirements.

ELIGIBLE GIFTS

For the purposes of these guidelines, a gift is a voluntary transfer of money (or a noncash contribution that is subsequently converted to cash) from a nonfederal third party to the applicant without compensation or consideration in return.

Gifts of Money Given to the Applicant

Both restricted gifts (gifts that are given specifically in support of a project) and unrestricted gifts (gifts that may be used at the recipient's discretion) are eligible to be matched. The donors must give the gifts directly to the applicant, AND THESE FUNDS MUST BE USED TO SUPPORT BUDGETED PROJECT COSTS DURING THE GRANT PERIOD.

Noncash Contributions Made to the Applicant

Noncash contributions are not eligible to release matching funds. However, the net proceeds from the sale of noncash contributions may be matched if the proceeds are used to support budgeted project activities during the grant period.

Gifts to Parties Other than the Applicant

If a gift of money is given to an individual or organization associated with the project rather than directly to the applicant, it normally will not be eligible to release federal matching funds. The only exception is when the donor has given the gift specifically in support of the project and the gift funds and control over the expenditure of these funds are transferred to the applicant.

Pledges

A pledge is a legally enforceable written promise to pay a specific amount of money during the grant period.

NEH will consider matching a pledge only if the applicant certifies that (1) the pledge is legally enforceable, (2) the donor is obligated to pay the pledge during the grant period, and (3) the immediate release of NEH funds is necessary to carry out the project activities. A copy of the donor's pledge letter must also be enclosed with the certification. In the event a donor fails to pay a pledge, it is the responsibility of the applicant to enforce the pledge, to substitute other gift funds, or to return to NEH the amount of federal matching funds awarded.

Grant awards from third parties are eligible for matching even if full payment has not been received, provided the funds are not federal in origin.

INELIGIBLE CONTRIBUTIONS

The following do not qualify as contributions that are eligible to release federal matching funds:

1. federally appropriated funds, whether they are disbursed directly to the applicant by an agency of the federal government or indirectly through another organization, for example, an agency of state government or a state humanities council;
2. income earned from a gift after the gift is transferred to the applicant, for example, interest or rent;
3. noncash contributions to a project, such as donated services or equipment, which are not converted to cash;
4. gifts that are given to an individual or organization associated with the project that are not given specifically in support of the project and that are not transferred to the applicant;
5. registration fees or any other fee or charge for participation in or attendance at project activities;
6. deferred giving, for example, a charitable remainder annuity trust, a charitable remainder unitrust, or a pooled income fund;
7. the applicant's own contribution to the project;
8. money or property that is made available to the applicant through a contractual agreement in which the donor establishes rights over products resulting from funded activities or has the right to withhold payment if levels of performance are not attained;
9. contributions that are made under circumstances where there is the appearance the donor might benefit financially by contributing to a particular project, for example, (1) contributions from any institution or individual involved in project activities if the individual, the institution, or persons in their employ will be paid from grant or cost- sharing funds for services rendered to the project; (2) contributions from persons closely related to and living in the same household with someone who directs a grant project if the project director will receive some form of remuneration for work performed on the project.

NEH OFFER OF MATCHING FUND SUPPORT

Matching Offers

Although applicants are encouraged to identify potential sources of gift funds at the time they make an application to NEH, they should not seek to have gifts matched by NEH before they have been notified in writing that their project has been approved for matching fund support. The formal offer of NEH support will indicate the maximum amount of federal matching funds that will be awarded and the length of time the offer to match gifts will remain open.

Conditional Nature of NEH Offer

All matching offers are conditional on acceptance of the gift or gift certification by the chairman and sufficient federal matching funds being available in the program that will administer the grant at the time the gift certification is received by NEH. Applicants are therefore encouraged to certify the receipt of gifts as soon as sufficient gifts are raised to carry out a viable project.

Expiration of Offer

The NEH offer of matching fund support will expire at the termination of the offer period unless a formal extension request is submitted to the NEH Office of Grant Management prior to the offer expiration date. Applicants should note that an offer period and a grant period are not the same thing and that the extension of the grant period does not automatically extend the offer period.

GIFTS GIVEN TO AN APPLICANT

Solicitation and Documentation of Gifts

In soliciting gifts, applicants are requested to inform potential donors of the purpose of the grant project and NEH's offer to match gifts donated for the project. When gifts are to be raised through special events or a fund-raising campaign, this information should appear on benefit circulars, invitations, posters, etc.

Documentation that substantiates the amounts, sources, and eligibility of gifts must be retained by the applicant for three years following the submission of a final financial report for the grant. NEH reserves the right to request copies of this backup material.

Certification of Gifts

To have NEH funds awarded as a match for gifts that are given to an applicant, the applicant should retain the gifts and forward to NEH a certification letter that follows the format of the sample certification letter included in these guidelines. Please note that all of the statements contained in the sample letter are essential for certifying the receipt of a gift and that a pledge will not be processed unless the pledge letter is enclosed with the certification. Certification of the receipt of gifts should be addressed to the

Donations Section
Office of Grant Management, Room 311
National Endowment for the Humanities
1100 Pennsylvania Avenue, N.W.
Washington, D.C. 20506

Gifts that are retained by the applicant constitute a part of the applicant's cost-sharing contribution to the project and, as such, must be expended on budgeted project activities during the grant period. In addition, for every dollar of federal matching funds that is expended on the project, an equal amount of gift funds must be expended.

GIFTS GIVEN DIRECTLY TO NEH

Although donors are encouraged to give their gifts to applicants, there may be reasons, such as tax considerations, for donors to give gifts directly to NEH. In such cases, the donor's transmittal letter to NEH should clearly indicate that the gift is made to NEH for a particular project and that the gift is to be matched by NEH. Checks should be made payable to the National Endowment for the Humanities and should be forwarded with a transmittal letter to the Donations Section of the NEH Office of Grant Management. Gifts that are given directly to NEH become federal funds dedicated to the particular project once they are accepted by the chairman of NEH.

TAX IMPLICATIONS

For federal income tax purposes, funds donated to NEH are deductible as charitable contributions pursuant to Section 959(a) of Title 20 of the U.S. Code.

Funds donated to applicants are not covered by this section of the U.S. Code but may be deductible under provisions of the Internal Revenue Code. When a gift to a grantee would not be deductible, the project could be supported through a gift made directly to NEH (refer to Gifts Given Directly to NEH).

WHEN CERTIFYING RECEIPT OF A GIFT, PLEASE FOLLOW THE TEXT OF THE SAMPLE CERTIFICATION LETTER THAT FOLLOWS.

Instructions for completion of the letter appear in [brackets] and should not be included in the letter submitted to NEH.

Address the letter to:

Donations Section
Office of Grant Management, Room 311
National Endowment for the Humanities
1100 Pennsylvania Avenue, N.W.
Washington, D.C. 20506

Dear Sirs:

I certify that $????????? has been received in the form
of a gift/gifts, which have been donated to ??????????
[name of the applicant or grantee] and which will be used
in support of ??????????????? [Project title and NEH
application or grant number].  These gifts meet the
criteria for eligibility established by NEH and will be
expended for project purposes during the grant period.

Documentation that substantiates the amounts, sources,
and eligibility of the gift/gifts will be retained for
three years following the submission to NEH of the final
financial report for this project.

     The funds certified above were provided by a
donor/donors in the foIlowing category/categories:

Donor Category*    Number of Donors           Amount

______________     ________________      $___________
______________     ________________      $___________
                                  Total: $___________

[* - Please use the following numerical designations
for donor categories:
    1 - Individuals
    2 - Corporations and businesses (including company-
        sponsored and corporate foundations)
    3 - Private and public foundations (including
        independent, operating, and community
        foundations)
    4 - Labor unions and professional associations
    5 - Nonfederal government units (state, county,
        municipal)
    6 - Affiliated groups (alumni/ae, memberships,
        "Friends")
    7 - Special events and benefits (use only when gifts
        raised through this means cannot be readily
        assigned to any of the above donor categories)
    8 - Other (specify)]

[The following sentence must be included in the
certification letter when a pledge is certified:]

The amount certified in this letter includes $??????
in pledges.  I hereby certify that (1) the pledge is
legally enforceable, (2) the donor is obligated to pay
the pledge during the grant period, and (3) the immediate
release of matching funds is necessary to carry out
project activities.

[A copy of the donor's pledge letter must be attached to the
certification letter.]

Sincerely yours,

????????????
[Name and title of certifying official]

The following is a statement required by the Office of Management and Budget:

"OMB NO: 3136-0134, expires: 6/30/09

NEH estimates that the average time to complete this form is thirty minutes. Please send any comments regarding the estimated completion time or any other aspect of this form, including suggestions for reducing the time to complete, to the Director, Office of Publications and Public Affairs, National Endowment for the Humanities, Washington, D.C. 20506; and to the Office of Information and Regulatory Affairs, Office of Management and Budget, Paperwork Reduction Project (3136-0134), Washington, D.C. 20503."