
Written by Justo Torres.
In the context of universities, both grants and gifts provide essential financial support, but they differ significantly in purpose, requirements and use.
What are Grants?
Grants are typically awarded by government agencies, foundations or other organizations to support specific projects or research. These funds are usually tied to a set of guidelines or objectives that must be met by the university or research team. Grants are often competitive, with universities submitting proposals that outline how the funds will be used. They are commonly used for research, academic programs or infrastructure projects. One crucial characteristic of grants is that they often require detailed reporting and accountability. Universities must demonstrate how the funds are spent and the outcomes of the projects funded.
What are Gifts?
On the other hand, gifts are generally donations made by individuals, corporations or foundations with fewer restrictions. Gifts are typically given with the intention of supporting the university in a broader sense, such as funding scholarships, supporting faculty research or enhancing the campus environment. Unlike grants, gifts do not require specific performance metrics or deliverables. The university has more flexibility in how the funds are used, though there may still be some restrictions depending on the donor’s wishes.
The key difference between the two lies in their conditions. Grants are usually restricted to specific projects or programs and come with a performance-based obligation, while gifts are more flexible and donor-directed. Both play vital roles in sustaining and advancing university operations, but understanding their differences can help universities better navigate the funding landscape to support their academic missions.
Want to Learn More?
Check out the Distinction between Gifts, Sponsored Projects and Contracts chart.