The following program income policy applies to all Endowment grants issued on or after August 1, 1996.
Program income is money that is earned or received by a grantee or a subrecipient from the activities supported by grant funds or from products resulting from grant activities. It includes, but is not limited to, income from fees for services performed and from the sale of items fabricated under a grant; usage or rental fees for equipment or property acquired under a grant; admission fees; broadcast or distribution rights; and license fees and royalties on patents and copyrights. The federal share of program income is determined by the percentage of total project costs that are supported by NEH.
Income Earned During the Grant Period
The federal share of program income earned during the grant period shall be retained by the grantee and, unless the grant award specifies how such income will be used, the grantee must use it in one or more of the following ways:
It may be added to the existing project funding to cover increased costs of the project or it may be used to support other
projects in the humanities;
- It may be used to finance the non-federal share of the project; or
- It may be used to finance the federal share of the project costs, which would result in an equivalent reduction in the amount of the NEH grant.
A report of program income earned during the grant period must be submitted with the final Financial Status Report whenever program income is actually earned during the grant period or when the terms and conditions of the grant award specifically require such a report. The report shall indicate the total amount of program income that was earned and how it was used.
- It may be added to the existing project funding to cover increased costs of the project or it may be used to support other
Income Earned After the Grant Period
When NEH funding of a project amounts to $50,000 or more and the total program income earned after the grant period exceeds $50,000, NEH reserves the right to make a claim to or restrict the use of the federal share of income earned during the seven years following the grant period. Due dates for the submission of program income reports may be listed in the grant award. However, even if NEH does not specifically require the submission of program income reports after the grant period, it is the grantee's responsibility to submit a report as soon as the cumulative amount of program income earned during the seven years after the grant period exceeds $50,000.
In reporting program income earned after the grant period, the grantee shall indicate the amount and sources of the gross income it has earned and the percentage of funding provided to the project by NEH. The federal share of program income will be determined by (1) deducting the first $50,000 in gross income from total gross income, (2) deducting 5 percent of the balance of gross income to cover possible grantee costs, and (3) multiplying the balance of gross income by half the percentage of funding provided to the project by NEH. For example if NEH's award of $250,000 covered 60 percent of a project's costs and the project earned $200,000 in program income during the seven-year reporting period, the federal share of that income would be $42,750 ($200,000 minus $50,000 minus 5% x 30%). Once the federal share of income equals the amount of funding provided by NEH, NEH's claim to additional income will be reduced by half.
If income is to be returned to NEH, a check made payable to the National Endowment for the Humanities and identified as program income must be submitted with the report.