Making Money with Program Income

Making Money with Program Income!

Do you need more matching funds to meet the grant requirements?

Do you want to serve more clients with your grant program?

Do you want your program to be sustainable after the grant is complete?

​Consider Your Program Income!

Program Income can help you meet your matching fund requirements, help you serve more clients and increase program sustainability during and beyond the grant project!

What is Program Income?

Program Income is income earned by a grant recipient from activities which are supported by the direct costs of the award.   

Examples:

1)  A grantee that receives third-party reimbursement from a health insurance company for medical or mental health services that are provided through a grant supported activity/program.

2) A grantee earns funds by charging rental or usage fees for the use of equipment or housing purchased with grant funds.

3) A grantee charges a fee for a conference or workshop funded by a grant sponsored project.

4) A grantee sells produce or a product developed with grant funds.

How can I use Program Income?

Each federal agency normally specify one or more of the three options used:

Option 1:  Used to further eligible project or program objectives

Option 2:  Used to finance the non-Federal share of the project or program

Option 3: Used to adjust the Net Allowable Costs

In most cases, you can deduct costs necessary for the generation of program income from gross income to determine the program income. If an agency authorizes a grant recipient to use Option 1 or 2 but sets a dollar limit, any excess will be used in accordance with Option 3.

Review the regulations of your Federal awarding agency  here.

How do I track and report Program Income?

Grantees are required to maintain records that identify the sources and application of program income. The grantee is required to report program income generated during the performance of the funded project.  Consequently,  your financial management system must enable you and your organization to track program income receivable and expenditures on a project-by-project basis. Work with your Finance Department/Staff to establish “Program Income” codes for revenue received related grant funded program or activity.

What happens after the grant?

In most cases, Grant recipients have no obligation to the Federal Government regarding program income after the end of the grant funded project period.  However,  be aware that the awarding agency regulations or terms and conditions state may state otherwise.    For instance, some HUD programs have requirements  that all program income earned 15 years after the grant period. Again, read the Notice of Funding Availability / RFP carefully.

Questions for you, our amazing readers:

1) Do you track program income for your federal grants? If so, what tips do you have for our readers?

2) Do you track program income for foundation or other nongovernment funded programs? If so, why? If not, why not?

3) Have you had a nonfederal grantor set reporting or spending requirements for program income recently?

4) How have you used program income to build program sustainability?

Do you have questions about Program Income? Please leave a Reply with your questions to get more answers and resources!

On more thing: 

How do I get more information on Program Income requirements and other Grant Management practices?

OMB Circulars! The Office of Management and Budget (OMB) issues instruction and information through issued Circulars.  OMB has issued Circulars for Grant Management Practices.  To stay up-to-date on all things OMB, you can visit the titillating OMBlog here.

Which OMB Circular do I Follow?

Although there are six grant circulars, you are only covered by three of them, depending on the type of entity:

States, local governments, and Indian Tribes follow:

• A-87 for cost principles, Relocated to 2 CFR, Part 225 (18 pages, 362 kb)
• A-102 for administrative requirements, and
• A-133 for audit requirements

Educational Institutions (even if part of a State or local government) follow:

• A-21 for cost principles, Relocated to 2 CFR, Part 220 (30 pages, 384 kb)
• A-110 for administrative requirements, Relocated to 2 CFR, Part 215 (18 pages, 280 kb), and
• A-133 for audit requirements

Non-Profit Organizations follow:

• A-122 for cost principles, Relocated to 2 CFR, Part 230 (17 pages, 362 kb)
• A-110 for administrative requirements, Relocated to 2 CFR, Part 215 (18 pages, 280 kb), and
• A-133 for audit requirements

Grant Requirements – Codification by Federal Department Codification of Government-wide Grant Requirements