Handling Program Income at Proposal Time

The principal investigator is responsible for identifying actual and potential program income at the proposal stage.

Any external or internal sale that results from a sponsored activity is likely to be program income. If the activity will be partly or fully supported by sponsored funds, it is program income. The only exceptions are:

• patient care credits (third party reimbursements)
• interest earned on advances of funds (this is temporary investment pool or TIP income),
• credits, discounts, loans, etc., (both principal and earned interest), and
•  taxes, special assessments, levies, and fines raised by government recipients.

At proposal time, common types of program income are fees from conferences and the sale of pamphlets or conference materials.  Other examples include:

• income from fees for services performed such as laboratory tests.
• income generated from the use, sale, or rental of equipment purchased or fabricated with project funds.
• proceeds from the sale of excess supplies or equipment purchased or fabricated with project funds.
• income from the sale of research materials such as animal models.
• royalties from patents and copyrights [see special situations].
• sales of products with an accompanying material transfer agreement.

Even if the principal investigator includes this income in the proposal budget calculations, it will be program income and the proposal routing form must be completed accordingly. For example, if conference fees are to be used to cover part of the cost of the project, this revenue is still program income. It is appropriate to discuss first with Sponsored Projects Administration (SPA) and, if necessary, the sponsor, whether funded activities might generate program income.   

If the principal investigator believes that program income will be generated during the project, he or she must answer ‘yes’ to the related question on the proposal routing form (PRF).

Some proposal applications provide a separate section for outlining anticipated program income. If this information is required, the principal investigator must provide it. It is appropriate to discuss first with SPA and, if necessary, SPA will contact the sponsor, whether funded activities might generate program income and whether it will be reportable. For assistance in proper pricing, contact External Sales at (612) 625-2415. For assistance on information to be included with the proposal, contact SPA at (612) 624-5599.

A. When department heads and deans review proposals developed in their units, they must ensure that any activity that could generate program income is correctly identified on the PRF.

B. When grant administrators in SPA review the budget section of the proposal, they will check that anticipated program income has been correctly identified on the PRF.  They will also review the proposal packet for inclusion of required program income statements.