Gifts, grants, contracts, endowments and fee generation:
What’s the difference?

Diversifying University of Missouri Extension’s income streams is crucial to funding a vibrant extension effort that is relevant, reliable and responsive. Gifts, grants, contracts, endowments and fee generation are all possible sources of new income streams. The additional funding received from each of these sources can enable MU Extension to accomplish programming and projects that would not be possible otherwise.

Gifts

Gifts are donations of money, tangible items, volunteer time or other valuable resources that can be used immediately to support the mission of University of Missouri Extension in the short run (one or two years).

Advantages

  • Gifts help MU Extension sustain and grow in the short run.
  • They can support programs until more long-term strategies can be put in place.
  • Success is based on MU Extension’s reliable, relevant and responsive performance.
  • Gifts can stimulate more substantial funding. Money attracts money. Success attracts success.

Disadvantages

  • Once the resources are used, they’re gone, and new or continuing gifts may need to be generated to sustain programming.
  • Gift generation efforts often take time and money away from programming.

Grants and contracts

Grant and contracts can dramatically expand the resource base from which we deliver MU Extension’s mission. Generally, MU Extension develops a proposal indicating that if the funder will provide resources, generally money, we will provide specific educational efforts or activities that benefit the funder and also support MU Extension’s mission. The money is provided for a specific, defined purpose. Grants and contracts are generally made available by federal or state agencies, corporations, foundations or organizations rather than an individual or family.

Advantages

  • Grants and contracts can be a win-win for the funder, county councils and MU Extension.
  • Funding can be significant and may be available for multiple years.

Disadvantages

  • Grants and contracts are not easy to find and negotiate.
  • Most grants are competitive, so funding is not guaranteed.
  • Grant work and contract work must be accomplished as agreed and within deadlines.
  • Failure to honor grant and contract agreements jeopardizes future grant and contract possibilities.
  • Lots of reporting and paperwork is often required. The detailed accounting required can be very time-consuming.
  • Use of the money is not flexible. Extension accepts the money in exchange for specific work.
  • Some grants do not provide funding for administrative support, which can increase MU Extension’s costs for accomplishing grant activities.

Endowments

Endowments are a long-term funding strategy whose proceeds are designated to be used for a specific purpose. The money put into this fund — the corpus — will be part of the fund forever to earn interest and grow. Only the earnings portion of the endowment will be spendable. The earnings are generally distributed monthly within a year of starting an endowment, or the endowment decision-makers can choose to put the earnings into the endowment. The larger the corpus, the more earnings it can generate — earnings that will be available in the future to support more significant programming.

Advantages

  • Plans are made deliberately and carefully for long-term impact of funds.
  • University of Missouri endowment funds are professionally managed and conservatively invested.
  • The funds are expected to be in place forever to help make important programming available for generations.

Disadvantages

  • The value of the corpus and its earnings, while managed conservatively, are at the risk of the stock market and vary with its fluctuations.
  • Often, costs are associated with management of the corpus.
  • The corpus is not available for unexpected, short-term financial emergencies.
  • A significant amount of money is needed in the corpus for earnings to be substantial enough to make a significant difference.

Fee generation

Fee generation is the practice of asking the people that benefit the most from MU Extension programming to pay something to participate in programming. As public funding efforts for MU Extension are no longer adequate to sustain the level of programming that is acutely needed by Missouri residents, charging program fees is becoming increasingly necessary.

Not all programs charge fees. Gifts, grants, contracts and endowment funds can support programming and reduce the need to charge fees. Also, some MU Extension programs have such high public value that they are funded 100 percent by appropriated tax dollars, eliminating the need to charge for participation.

In fee generation efforts, the county MU Extension councils should budget to cover local costs and remit a portion to help cover MU Extension faculty costs. Just as MU Extension has always been a partnership of federal, state and county funds, fee generation continues to recognize partnerships.