As a general rule, the grant mechanism is used when the sponsor is providing support for work that the researcher has planned independently. Grants are a common funding mechanism for federal agencies, as well as public and private foundations. And while grants are often awarded in the name of the principal investigator, grants (as opposed to Fellowships, see below) are almost always officially awarded to the university. A grant is like a trust agreement: the recipient of the funding makes no guarantees other than that work will be done generally as described in the proposal and that sound research management practices will be followed. If the grantor is unhappy with the quality of the work, however, or if it feels the research findings are not promising, it may choose not to fund the applicant in the future. The grantor ordinarily places no limitations on the use or publication of the project results.
Grants, though sometimes open-ended, are generally made for a specific time period – most often for one or multiple years. For multi-year awards, funds usually are disbursed on an annual basis by the granting agency. The principal investigator may be required to submit a non-competing continuation application as each subsequent grant year approaches, to satisfy the agency that the work is on track with the plan outlined in the original proposal. A competitive grant renewal, as opposed to a non-competing continuation, is sometimes required by the funding agency. A competitive renewal usually entails preparation of another proposal, which will be competitively peer-reviewed just as was the original proposal.
Fellowships are also considered to be grants. One distinctive characteristic of fellowships is that, unlike most other grants, they are often awarded directly to an individual rather than to the university. When that is the case, the award is not necessarily processed through OSP, although OSP staff will assist PIs seeking fellowship funding in the preparation and submission of their proposals. Fellowships are usually awarded for less complex projects than research grants, and they usually require only one researcher. Fellowship funds are primarily intended for salary and/or travel costs, and fellowship periods are generally for one year or less in duration.
Contracts usually are used by sponsors when they have a short-term need or goal in mind. Contracts are most often awarded by government agencies, businesses and industry. Foundations seldom use contracts as a funding mechanism. These types of awards are quite formal and quite specific: the agency stipulates its needs, and the researcher and the agency reach an agreement about the exact services to be performed and/or deliverables to be produced for a set price within a set period of time. Industry or corporate sponsors sometimes approach such support as the purchase of services and use a standard purchase order form. In the context of a contract for a research project, it should be understood that a contract cannot stipulate the achievement of specific research results, nor can a sponsor withhold payment if the results are not to its liking.
Contracts should set forth faculty's right to publish and each party's obligations and intellectual property rights, as well as procedures to be followed if patentable discoveries or copyrightable materials result from the sponsored project. The Office of Sponsored Projects has developed a template contractual agreement, including intellectual property provisions. A scope of work must accompany the contract and PIs should carefully and tightly frame the scope of project work for contractual funding: deliverables should be specific and narrow; milestones should be realistic.
For advice and information on intellectual property matters, contact the Director of the Technology Transfer Office (TTO). Information on the TTO and the NIU Intellectual Property Policy can be found at Federal Regulations & University Policies: Compliance and Assurance Regulations.
A type of contract sometimes used by business and industry is a fixed-price contract, which is, in effect, payment for deliverables produced for a set price. The sponsor pays the fixed amount regardless of whether the actual costs of the research activities involved turn out to be higher or lower. If the project ends up costing more than originally estimated, the company normally does not increase the award; thus, the extra expense must be borne by the University.
Another type of contract is the cost-reimbursement award. With this arrangement, the sponsor reimburses the University for the actual costs of the research activities undertaken, up to the amount originally awarded. Audits of project expenses sometimes are required by sponsors making cost-reimbursement awards.
A hybrid sponsorship that combines elements of both the grant and the contract is known as a cooperative agreement. The cooperative agreement allows researchers from the University and another institution or organization to work jointly in an area of investigation. Both parties make available personnel to work on projects, and both parties formally participate in planning, coordinating, conducting, and evaluating activities carried out under the agreement.
Occasionally, two or more sponsors are willing to co-sponsor a given activity, such as a conference of mutual interest or a research project the results of which will be shared among the sponsors. A combination of grants and contracts may also be involved in such multi-sponsor efforts.