Conditional Grants

Conditional grants are grants in which some, or all, of the grant amount is contingent upon the grantee satisfying certain conditions. These conditions are usually a requirement for the grantee to raise funds from other sources to match all or part of the grant amount, but they can sometimes be other programmatic or organizational requirements, such as the hiring of a new executive director or the accomplishment of certain programmatic goals. For these grants, typically the payments that are contingent on the grantee satisfying these conditions are marked as “contingent” in Foundation Connect and those amounts do not accrue until the conditions are met. These grants do not require the same procedures as contingent grants without conditions. Usually proof that the grantee satisfied the matching requirement or other condition is enough for the grants officer to change the contingent status of the payment to “met” to trigger the accrual of that amount and then to release the payment

Financial-statement auditors are very interested in these types of grants when performing their annual audit, and it is a good idea to have a discussion with Accounting every time a conditional grant is proposed. If the conditions are very likely to be met, Accounting will often request that the amounts NOT be made contingent in Foundation Connect, even if the grant agreement lists fulfilling a condition as a requirement for the amount to be paid out.

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