990 Acownt4it/Old Jack

[Gretel]

Does anyone of you have experience with government grants and when they are reported as grants and when some place else?

[Acownt4it]

Grants

I am quoting from the PPC's 990 Deskbook, page 2-6.

"Grants received from government entities are reported on line 1c of Form 990 as contributions if their primary purpose is to allow the organization to provide a direct benefit or service to the public. This is true even if the grantor specifies how the grant is to be used, so long as it is for a public purpose rather than for the grantor’s private benefit. [Reg. 1.509(a)-(g)].

Example: Government grant treated as a contribution.

Waste Away, Inc. (WAI), is a Section 501(c)(3) public service organization. The Bureau of Solid Waste Management of the Department of Health and Welfare (Bureau) agreed to pay WAI $50,000 to study the feasibility of a particular system for disposal of solid waste. WAI must submit a detailed report to the Bureau when the study is completed.

Although WAI is providing the Bureau with a report on its study (which could be considered a direct benefit to the Bureau), the report is the result of basic research and study in the physical sciences. Therefore, its primary purpose ids to directly benefit the general public by furthering the general functions of government rather than to meet a direct and immediate governmental need [Reg. 1.509(a)-3(g)(2)]. Thus, WAI should report the $50,000 as a contribution on line 1c on Form 990.

Suppose the municipality of Throckmorton learns of WAI’s research study. Throckmorton agrees to pay WAI $100,000 for WAI’s help in applying the study’s results to the construction of a new sewage disposal plant. Since Throckmorton’s payment is primarily directed towards producing an economic benefit to the city by maximizing the efficiency of its new sewage disposal plant, WAI should report this payment on line 2 of Form 990 as program service revenue rather than as a contribution.”

I can fax this page as well as the pages that discuss program service revenue.

[Gretel]

Thank you so much, Acownt4it. I have a hard time, though, grasping the difference and applying it to my case.
Maybe you can help?

Org. does plant study and developement and has own facility for it. Within this developement they have a program called "Envirothon", which is a competition for students, containing studying the subject and they can win scholarship.

Envirothon is supported by state grants and was previously reported as program service income whereas I feel it should be reported as grants. What do you think?

I very much would like to get a fax with more information: 775-205-2724. Thank you so much for your generous offer.

Gabriele