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May 1998
Matching Guidelines for General Support Grants to
State Humanities Councils
TABLE OF CONTENTS
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Introduction
Individuals and organizations are encouraged to add their support
to projects sponsored by the National Endowment for the Humanities
(NEH). 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.
To be awarded NEH matching funds, a state council must certify
that it or one of its regrantees has received eligible gifts that
will be used to support grant activities. NEH then issues an amendment
to the state council's grant that increases the award by the amount
of the federal matching funds. These federal matching funds are
subject to the same grant provisions, administrative regulations,
and payment procedures as a council's outright funding, and both
the gift and the federal match must be used for project purposes
within the grant period.
The purpose of these guidelines is to provide guidance to each
state council on what constitutes a third-party gift, how to determine
if such a gift is eligible for certification to NEH for match,
how the certification process works, and what documentation must
be retained by the councils.
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Gift Eligibility
A state council is responsible for determining whether funds received
from third parties qualify as gifts eligible for federal match.
For the purposes of these guidelines, a gift is defined as the voluntary
transfer of money (or a noncash contribution that is subsequently
converted to cash) from a nonfederal third party to the state council
or a regrantee of the council without compensation or consideration
of return.
For a gift to be eligible to release NEH matching funds, it must
meet the following criteria:
- It must be in the form of cash. Noncash gifts, therefore,
cannot be certified, but the net proceeds from their sale may
be certified.
- The gift has to be given freely by a disinterested third party
and without consideration of anything in return.
- The gift has to be given to the council or one of its regrantees.
Gifts that are given to an individual or organization that is
associated with a project but is not a regrantee of the council
are not eligible to be certified except when gifts meet the
conditions listed in Section 5 of these guidelines.
- The gift may not be money that has become available through
a federal appropriation.
- The gift has to actually be paid to the state council or
its regrantee. In extraordinary cases, a pledge made directly
to a state council may be certified (see Section 4). In no case
may a pledge made to a regrantee be certified.
As long as all of the above criteria are met, unrestricted
gifts that the gift recipient decides to earmark for the project,
as well as gifts that are given specifically in support of the
project are eligible to release federal matching funds. A gift
may be matched by NEH even if the donor did not give the gift
specifically for the purpose of releasing federal matching funds.
If a state council has a question about whether or not a contribution
qualifies to release federal matching funds, documentation on
the contribution should be forwarded to the Donations Section
of the NEH Office of Grant Management for review prior to certification.
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Items That Do Not Qualify as Eligible Gifts
The following are examples of items that do not qualify as contributions
that are eligible to release federal matching funds and, therefore,
may not be certified:
- A council's or regrantee's own funds. (For gifts received
from universities, NEH uses the "campus" as the limit of conflict
of interest. Thus, a gift from the Riverside campus of the University
of California system would be eligible to release matching funds
if no part of its campus benefited financially from the project.)
- Federally-appropriated funds, whether or not they are disbursed
directly to a council or a regrantee by an agency of the federal
government or indirectly through an organization such as a state
agency or another state humanities council. (In soliciting financial
support from state governments, councils are advised to explain
this limitation to ensure that state funds that will be certified
as gifts are not federal in origin.)
- Funds from the Corporation for Public Broadcasting (CPB),
unless a written statement from CPB that the funds donated are
not federal in origin is forwarded to NEH with the certification.
- Gifts that are given to an individual or organization associated
with the project that do not meet the requirements listed in
Section 5.
- Gifts of more than $100 that are given anonymously unless
the council has some way of determining that the gift is otherwise
eligible.
- "Contracts" issued to a council or a regrantee, unless the
agreement is merely the mechanism to transmit an otherwise-eligible
gift, and there is no contractual relationship between the donor
and recipient.[Contracts give the contractor rights to the materials produced as a result of funded activity,
often establish dates for the delivery of services or products, and allow for payment to be withheld or the agreement
to be unilaterally terminated by the contractor. Money paid under a contract does not qualify as a gift and may
not be certified to release federal matching funds. (Also see Section 7.b.)]
- Interest or other forms of income earned from a gift after
it has been transferred from the donor to a council or a regrantee.
- Royalties earned by a state council or a regrantee.
- Noncash contributions to a project, such as a gift of property
or equipment, that are not converted to cash.
- Membership fees, registration fees or any other fee or charge
for participation in or attendance at project activities.
- Deferred giving, for example, a charitable remainder annuity
trust, a charitable remainder unitrust, or a pooled income fund.
- 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
council staff members or people with whom the council contracts
for services; (2) contributions to a project from an institution
or individual involved in that project's 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;
and (3) contributions from persons closely related to and living
in the same household with someone who directs a grant project
and receives some form of remuneration from grant or cost-sharing
funds for work performed on the project.
Pledges
A pledge is a legally enforceable written promise to pay a specific
amount of money during the grant period. Grant awards from nonfederal
third parties are considered to be pledges until the grant funds
are disbursed to the grantee.
NEH will consider matching a pledge that is made directly to
a state humanities council only if the council can substantiate
that (a) project activities will be affected adversely if NEH
funds are not released immediately, (b) the pledge is legally
enforceable, and (c) the donor is obligated to pay the pledge
during the grant period. Documentation substantiating these
facts, including a copy of the donor's pledge letter, must be
forwarded to NEH when a pledge is certified.
If a pledge is matched by NEH, the state council is required
to inform the Donations Section of the Office of Grant Management
when full payment of a pledge is received. In the event a donor
fails to pay a pledge, it is the responsibility of the council
to enforce the pledge, to substitute other gift funds, or to return
to NEH the amount of federal matching funds awarded.
NEH will not match pledges that have been made to regrantees.
Therefore, state councils should inform their regrantees that
a gift may not be certified until the regrantee can document the
payment of the gift.
Gifts to Parties Other than the Council
or Regrantee
Occasionally gifts may be given to an individual or organization
that is associated with a council's or regrantee's project rather
than directly to a council or a regrantee. These gifts would normally
not be eligible to release federal matching funds. The only exception
would be if the donor has restricted the use of the gift specifically
to the support of a project that is to be carried out by a council
or a regrantee and the gift funds are transferred to the council
or the regrantee so that either one of these parties controls
the expenditure of the gift funds. In this case, the third party
would act as an agent of the donor in transferring funds to a
state council or a regrantee.
When Gifts Must Be Discounted
In most instances, state humanities councils may certify to NEH
the full amount of the cash gift they have received.
This is not the case when the donor receives a premium from the
council in return for a gift. The value of what the donor receives
must be deducted from the amount that is certified to NEH. Items
of nominal value, however, such as a single issue of a council's
magazine, do not have to be taken into account.
When councils hold special events or mount fund-raising campaigns,
they must deduct from gross receipts the costs that are directly
related to their fund-raising efforts, e.g., the rental of facilities
and equipment; promotional, entertainment, and food costs; premiums
that are given to those who attend the event; etc. The salaries
of council employees who are involved in fund-raising activities
do not have to be deducted from the gross receipts.
- Documentation of Gift Funds
General Principles
For gifts in excess of $100, state councils must have documentation
that substantiates the amounts, sources, and eligibility of gifts
that have been given to a council or its regrantees before gifts
are certified. For gifts of $100 or less, the name of the donor
and the amount of the gift would be sufficient documentation.
The councils may also certify an anonymous gift that does not
exceed $100.
When a council certifies a gift that is retained by a regrantee,
it must also be able to document that the gift was paid to the
regrantee before it was certified to NEH. This documentation
must be retained by the council for three years following the
submission of a final financial status report for the grant.
Ordinarily, the donor's transmittal letter will provide the
needed documentation. Donor letters should therefore be requested
whenever a gift is given to a council or a regrantee. The letter
should contain the following information: the names of the donor
and recipient, the amount of the gift that is being conveyed,
and whether or not all or a portion of the gift is given for
a specific purpose or may be used at the discretion of the council
or the regrantee. NEH reserves the right to request a copy of
this documentation from a council before it processes a gift
certification.
- Gifts Conveyed Through Written Agreements
At times, state agencies and private foundations provide funds
to humanities councils or their regrantees through written agreements
that indicate the purpose of the funding and sometimes restrict
the use of the funds awarded. It is a council's responsibility
to review these agreements to determine that the donor is in fact
making a gift available to the council/regrantee for the council/regrantee
to carry out its own project and is not contracting with the council/regrantee
for services or making any claims to products resulting from project
activities. When funds are provided to a council or a regrantee
through written agreements, these agreements must be retained
by the council as a part of its documentation.
- Fund-Raising Events/Campaigns
To establish the eligibility of funds that are raised by a council
or regrantee through special events or fund-raising campaigns,
any promotional materials, such as benefit circulars, invitations,
posters, etc., should indicate the purpose of the fund-raising
activities and NEH's offer to match gifts raised for this purpose.
Representative copies of promotional materials must be retained
by the council as documentation of gift eligibility.
State councils must account not only for the monies raised
through special events and fund-raising campaigns but also for
the expenses involved in carrying out these activities (see
Section 6, "When Gifts Must Be Discounted"). For special events,
they must retain documentation on ticket sales, gross receipts,
and the costs related to the event. When they engage in a fund-raising
campaign, they are also required to maintain a complete list
of donors and the amounts they have contributed provided the
gift exceeds $100.
Certification of Gifts
To have NEH match gifts that are retained by a state council
or one of its regrantees, the council must forward to NEH a certification
letter that follows the format of the sample letter included in
these guidelines. Please note that
- all the statements contained in the sample certification
letter are essential for certifying the receipt of a gift,
- all gifts that are restricted to the use of a
particular regrant must be certified by the council to NEH before
the end of the regrant period, and
- The total amount of each certification should be
rounded down to the nearest dollar.
Before certifying a gift that has been retained by a regrantee,
the council must determine from the documentation provided by
the regrantee that the gift meets the eligibility criteria established
in these guidelines, and that the gift has actually been transferred
from the donor to the regrantee.
Certifications 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
Certified Gifts and Cost Sharing
Gifts that are retained by the council or its regrantees constitute a part of the cost-sharing contribution to
the NEH grant against which they have been certified. These gifts must therefore be expended by the end of
the grant period on budgeted project costs and reported as part of the nonfederal share of outlays for that grant.
Because NEH may not support more than 50 percent of the costs related to the overall activities of a humanities council,
the councils must ensure that they or their regrantees maintain documentation that substantiates that
the cash and in-kind cost-sharing contributions to the NEH grant at least equal the outright and matching funds
provided by NEH.
Expenditure of Gifts and Matching Funds
State councils are required to expend both the gift funds and the federal matching funds by the end of the NEH grant under which the matching funds were awarded. Gifts that are retained by a regrantee have to be expended within the regrant period. Matching funds that are obligated and subsequently deobligated may be reobligated by a state council, provided the funds are expended before the end of the grant period. Also, if the deobligated matching funds were originally allocated to regrants, they must be reused for this purpose.
Although the gift and the matching funds must both be expended by the end of the council's grant period, it is not necessary that gift funds and the matching funds they release always be expended for the same purpose. Therefore, if a donor gave a gift in support of regrant activities but did not require that matching funds be used to support these activities, the council could use the federal matching funds to cover other expenses, such as its own administrative costs.
In reviewing regrantees' final financial reports, councils must ensure that the cash cost-sharing contribution to a project (which is usually the expended gift funds that were certified to NEH) is not less than the amount of NEH matching funds the regrantee has expended.
Regrantee Gift to Match Ratios Greater Than 1:1
Some state councils require their regrantees to raise two or more gift dollars for every dollar
they receive from the council in outright or matching funding. However, councils may not certify more than two gift
dollars for each dollar of outright or matching funds they provide to a regrantee.
If, for example, a council awarded a regrantee $500 in outright funds and $1,000 in matching funds, the maximum amount a
council could certify to NEH for this project would be $3,000-twice the amount it provided to the regrantee.
This would be true even if a 4:1 offer were made to the regrantee, who in response raised $4,000 in gifts.
Gifts Given to NEH
Although donors are encouraged to give their gifts to the state councils, some may want to give the gifts directly to NEH. In this case, the donor's transmittal letter to NEH should clearly indicate which NEH grant the gift is to support and that the funds are to be matched by NEH. Should any portion of the gift be given for a specific purpose (for example, in support of a particular regrant activity or the council's administrative costs), this should also be indicated in the transmittal letter. Checks should be made payable to the National Endowment for the Humanities and should be forwarded with the transmittal letter to the Donations Section of the NEH Office of Grant Management.
Gifts that are given directly to NEH become federal funds once they are accepted by the Chairman. They are in turn awarded by NEH to the state council along with the federal matching funds that the gifts have released. Gifts to NEH are generally deductible as charitable contributions for federal income tax purposes.
Conditional Nature of an NEH Offer of Matching Funds
All NEH matching offers to state councils are conditional on the Chairman's acceptance of the gift or gift certification and sufficient matching funds being available in the program at the time the council certifies or forwards a gift. The councils are therefore encouraged to certify gifts as early as possible in each funding cycle and to make clear in their application guidelines that any offer of matching funds that they make to an applicant is contingent on the availability of funds from NEH.
Expiration of Matching Offer
All offers of NEH matching funds to state councils expire in September of the fiscal year for which they were made. The annual offer of matching funds states the precise expiration date.
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PLEASE REFER TO THE SAMPLE CERTIFICATION LETTER BELOW
OMB No3136-0134 expires 6/30/09
(Address the letter to the Donations Section, Office of Grant Management, Room 311, National Endowment for the Humanities, 1100 Pennsylvania Avenue, N.W., Washington, D. C. 20506)
I certify that $ __________.00 has been received in the form of gifts that have been donated in support of the activities that will be carried out under NEH grant ____ - _________ - ____ . 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 gifts will be retained for three years following the submission to NEH of the final financial report for the referenced grant.
The funds certified above were provided by a donor/donors in the following category/categories: |
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Donor Category* | Number of Donors | Amount |
___________ | ____________ | $ ______________ |
___________ | ____________ | $ ______________ |
___________ | ____________ | $ ______________ |
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The matching funds released by this certification will be used as follows:
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| Regrants | $ _____________.00 |
| All other categories | $ _____________.00 |
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(If unpaid pledges or awards are certified, the following sentence must appear in the certification letter.) |
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The amount certified in this letter includes $ ____________ in unpaid pledges. |
The following documentation required by the Endowment is attached: |
justification for the immediate need of matching funds, a copy of the donor's pledge letter, |
and evidence that the donor is legally bound to pay the pledge during the grant period |
(if such evidence is not included in the donor letter).
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| | Sincerely, |
| | ____________________________ |
| | Executive Director |
* Please use the following numerical designations for
donor categories.
- Individuals
- Corporations and businesses (including company-sponsored and corporate foundations)
- Private and public foundations (including independent, operating, and community foundations)
- Labor unions and professional associations
- Nonfederal government units (state, county, municipal)
- Affiliated groups (alumni/ae, "Friends")
- Special events and benefits (use only when gifts raised through this means cannot be readily assigned to any of the above donor categories)
- Other (specify)
NEH estimates the average time to complete this form is thirty minutes per response. This estimate includes the time for reviewing the instructions for this form, gathering the necessary data and entering the data on the form. Please send any comments regarding this estimated completion time or any other aspect of the form, including suggestions for reducing completion time, to the Director, Office of Publications and Public Affairs, National Endowment for the Humanities, Washington, D.C. 20506; and to the Office of Management and Budget, Paperwork Reduction Project (3136-0134), Washington, D.C. 20503. According to the Paperwork Reduction Act of 1995, no persons are required to respond to a collection of information unless it displays a valid OMB control number.
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