Frequently Asked Questions Concerning Fund Raising and

Senior Corps Grants

 BACKGROUND

 1.      What government-wide requirements apply to raising funds under our Corporation grant?

Senior Corps sponsors must follow all applicable OMB Cost Principle circulars: 

OMB Circular A-87 for State, Local, and Indian Tribal Governments 
[Located at 2 CFR, Part 225]

 OMB Circular A-122 for Nonprofit Organizations 
[Located at 2 CFR, Part 230]

OMB Circular A-21 for Educational Institutions) 
[Located at  2 CFR, Part 220]

These OMB Cost Principles apply to grant programs across the Federal Government and define the type of costs that grantees may include on a Financial Status Report (FSR) as costs being charged to a federally funded grant.  The cost principles implement government-wide decisions on what types of costs may not be included in federal grant-funded programs, or claimed as meeting grant match requirements.   

One of the specific types of costs discussed in the Cost Principles is fund raising.  Specifically, the OMB Circulars for non profit organizations do not allow grant funds to be used for the costs of “organized fund raising, including financial campaigns, endowment drives, solicitation of gifts and bequests, and similar expenses incurred solely to raise capital or obtain contributions.”

 2.      Is this a new requirement? If not, why is the Corporation raising this issue now? 

 No.  Organized fund raising costs have been unallowable under the OMB Cost Principles for many years.  The Corporation is addressing this issue across all Senior Corps programs because the consolidation of its Field Service Centers into one location has highlighted the need to ensure consistent guidance and practices in this area across all Senior Corps grantees. 

3.      How does the disallowance of costs for “organized fund raising” under the OMB Cost Principles work?

 If the Corporation learns that an FSR includes costs for organized fund raising, those costs (as either grant charges or matching expenditures) will be disallowed.

  4.      How does the disallowance of costs for “organized fund raising” affect staff costs charged to the grant?  

Staff costs will be disallowed as charges to the grant (or as matching expenses) to the extent the time associated with those costs were spent on “organized fund raising.”  This means that Senior Corps project staff whose salaries and benefits are 100 percent charged as direct costs to the federal grant may not engage in “organized fund raising” on behalf of the sponsor organization. 

 ACHIEVING COMPLIANCE 

5.      At our sponsoring organization, there is no alternative to the project director devoting some time to fund raising for the project. Is there any way this can be done in compliance with the OMB Circulars?

     Yes, by reducing the time the project director charges to the grant’s federal or required non-federal share to reflect the time he or she actually spends on fund raising activities. 

 For example, a project director who needs to spend 5 percent of his or her time on fund raising activities would charge 95 percent of his or her time on the budget and FSR (either as grant costs or matching costs).  Another project staff member, who might spend 15 percent of their time writing grant applications, would allocate 85 percent of his or her time on the FSR, the other 15 percent would be paid from excess non-federal funds, or other funds available to the sponsor.  Making this kind of change to its budget will actually give sponsors more flexibility in managing their programs.

 6.      May costs related to “organized fund raising” for the project, such as project staff time, mailings, etc., be charged to “excess” non-federal funds?

 Yes. The OMB circulars on allowable costs do not apply to funds that are not included in the grant as either costs to be reimbursed by grant funds or matching costs financed by the project.  Project sponsors are free to spend their non-federal funds that exceed the budgeted match on anything they determine is appropriate for their project, including the costs of fund raising. 

 7.      Does my program need to negotiate for employment of a part-time director in order to allow the director to allocate part of his or her salary to “excess” funds (or some other funding source)?

 Allocating part of a director’s time to “excess” funds or to some funding source outside the grant does mean that the program director will not be working for the program on a full time basis.  Time spent on “organized fund raising” to support the program is within the scope of the director’s duties, it just cannot be paid for by grant or matching funds.   

8.      What staff activities are considered “organized fund raising” under the OMB cost principles? 

“Organized fund raising” includes all efforts to obtain funds to cover capital or operating costs, or to solicit in kind contributions.  Examples include: 

• Conducting a financial campaign or endowment drive
• Soliciting specific gifts or bequests
• Applying for grants (See Question 11 regarding continuation applications for Senior Corps grants).
• Applying for support from local community foundations, such as the United Way

9.      What staff activities will NOT be considered “organized fund raising” under the OMB cost principles? 

Senior Corps project staff may disseminate information about the project’s activities, accomplishments, and outcomes, as well as provide information about the grant application, the governing regulations, and the grants terms and conditions.  Even if that information is going to be used by someone else to raise funds for the program, this will not be considered “organized fund raising.” 

For example, project staff may: 

• Negotiate a grant budget following approval of a grant application.
• Provide information about the project to a grant writer.
• Inform community organizations and leaders about the project, its activities and accomplishment and the non-federal funding requirements of the grant. 
• Negotiate as part of the Memorandum of Understanding with a volunteer station for the volunteer station to provide cash and/or in-kind support for the project, so long as such contributions are not a precondition of providing the station with volunteers.
• Responding to questions or providing information to state or local governments that may decide to contribute to the cost of the program.

10.  As part of our grant-supported efforts to inform and educate the general community about project activities, may we include information about how members of the public can make donations to support the project? 

      Yes. So long as the primary purpose of the activity is informing and educating the community at large, and the activity falls with the scope of the grant, it would be permissible to include information as to how interested persons can make donations. For example, it is permissible for a grantee to prepare and distribute a newsletter, or maintain a website (even though the web site includes information about how to make donations to support project activities).  Another example would be an “open house” for the public to learn more about the project and what the volunteers are doing in the community. Under these circumstances the grantee could include information on how an interested person could support the project.   

11.  May project staff charge time spent preparing second and third year continuation applications for their project to the Corporation to the current grant? 

      Yes. This is an administrative action required by the Corporation to continue the current grant, and is not considered “organized fund raising.”  

12.  May project staff who are 100 percent funded by the grant spend time writing a new three-year application (“renewal” application) for their project?           

No. The resources of the current grant cannot be used to request funds for the next grant period.  This time may be charged to Excess. 

13.  What are some other options available to sponsors, such as “self-incorporated” projects, who lack other resources to spend on fund raising activities?   

Other options include: 

(a)   Use Sponsor Organization Staff: Staff of a sponsoring organization that are not charged to the Senior Corps grant may engage in fund raising without regard to the OMB Cost Principle restrictions. 

(b)   Ask members of your Board of Directors to assist: Board members of non-profit organizations frequently play a key role in fund raising. 

(c)    Make Use of the project Advisory Council: As noted in Senior Corps program regulations, the membership of the Advisory Council should include people who are “capable of helping the sponsor meet its administrative and program responsibilities including fund raising, publicity, and programming for impact.” The Advisory Council can help raise both the required non-federal share and other funds.  In addition, Advisory Council members can be asked to prepare renewal grant applications. 

(d)   Seek Other Pro-Bono Volunteer Grant Writers: Small nonprofits frequently are able to get pro-bono help in grant writing from community members.  

(e)   Participate in United Way or other Community Wide Campaigns.  In this case, fund raising is undertaken by professionals in the community-wide organization. 

(f)     Offer internships to local universities and colleges, especially for graduate students with experience in grant writing, marketing, non-profit administration.  

14.  May we count the value of fund raising volunteer time as an in-kind contribution to the project?
 

No. Because fund raising is not an allowable cost under the OMB Cost Principles, the value of volunteer time spent on fund raising may not be counted as an in-kind contribution to the project.

RSVP VOLUNTEERS 

15.  May RSVP volunteers assigned to the project to perform administrative functions engage in fund raising on behalf of their own project?  

      Yes.  RSVP volunteers assigned to perform administrative functions may raise resources for their programs consistent with the activities allowed for AmeriCorps members under the Corporation’s regulations (45 C.F.R. 2520.40 and 2520.45). 

16.  May RSVP volunteers engage in fund raising on behalf of an FGP or SCP project sponsored by the same organization that sponsors their RSVP Project? 

Yes.  As in the case of fund raising on behalf of their own project, RSVP volunteers may raise resources for an FGP or SCP project sponsored by the same organization that sponsors their RSVP project, consistent with the AmeriCorps regulations cited in the answer to Question 15.   

17.  May RSVP volunteers who serve on the project’s Advisory Council engage in fund raising in their capacity as Advisory Council members? 

Yes. One of the specific roles of Advisory Council members is to help the sponsor meet its administrative and program responsibilities including fund raising. 

GENERAL           

18.  May a project director accept an unsolicited donation for the project on behalf of the sponsor?     

      Yes. Acceptance of an unsolicited donation is not considered fund raising. 

19.  May project staff charge to the grant their time and related expenses spent soliciting volunteer recognition items and/or support? 

      If the value of the items or support being used to recognize volunteers is not included in the program’s grant budget (either as a federal cost or as matching funds), then the cost of soliciting such items may be charged to the Senior Corps grant.  

20.  As a project director, may I charge to the project the time I spend participating in internal discussions of the project budget and presenting the case for my sponsor to allocate funds to meet the grant’s non-federal funding requirement.  

Yes. Such activities are considered part of the project director’s management responsibilities.  

21.  If we have inadvertently been charging certain fund raising costs, including project staff time, to the grant, what can we do to correct the situation? 

      You may remove those costs from the federal or required non-federal share of the grant, and charge to Excess.  

22.  May project staff volunteer their own time, off hours, to engage in fund raising?
 

No.  Project staff that are charged 100% to the CNCS share or Grantee share cannot avoid the limitation on organized fund raising by donating “off duty” time.  
 

23.  We are a non-Corporation funded Senior Corps project and receive no federal funds?  Are we subject to the same restrictions on fund raising by grant-supported staff? 

No. The OMB circulars on allowable costs do not apply projects that do not receive federal funds.  However, sponsors should be sure that support that they receive from state and local sources are not “subgrants” of federal funds.  Subgrants financed under a federal grant program may be subject to the OMB Cost Principles.  

Congratulations to all of you! Congratulations, NSCA!  Unquestionably, we are stronger together!