Administration of NEH Challenge Grants

NEH Addresses:

Office of Grant Management
Room 311
National Endowment for the Humanities
1100 Pennsylvania Ave, N.W.
Washington, DC 20506
202/606-8494
FAX: 202/606-8633
Email: grantmanagement@neh.gov

Office of Challenge Grants
Room 420
National Endowment for the Humanities
1100 Pennsylvania Ave, N.W.
Washington, DC 20506
202/606-8309
FAX: 202/606-8579
Email: challenge@neh.gov

Basic Principles

Release of Federal Funds (with sample release schedule)

Eligibility of Matching Gifts
1. General Criteria
2. Kinds of Eligible Gifts
3. Pledges
4. Ineligible gifts

Certification of Gifts
1. Internal Record Keeping (with Sample Donor Transmittal Letter)
2. Certification
3. Additional Documentation

Failure to Meet Required Match
1. Forfeiture
2. Refunds
3. Extensions

Reporting Requirements
1. Annual Certifications
2. Interim Narrative Report
3. Final Narrative Report and Certification
4. Follow-up Reports
5. Extensions for Reports

Changes to be Requested of, or Reported to, NEH
1. Purpose of Expenditure
2. Changes in Project Director or Organization
3. Other Changes

Acknowledgment Guidelines

Annual Burden to Grantees

Appendices

Certification Form
Special Requirements for Construction and Renovation Projects
Challenge Grants Attachment to Offer Letter

Basic Principles
- When matched by nonfederal donations and subject to the availability of funds, federal funds will be released according to the schedule described in the offer letter.
- To count toward the matching requirement, gifts must be donated or pledged in anticipation of or in response to the NEH challenge.
- To count toward the matching requirement, gifts must be donated or pledged, and all pledges paid, during the approved grant period.
- All federal and nonfederal challenge grant funds must be expended during the grant period. Funds "expended" include funds deposited into an income-earning account.
- Challenge grant funds, both federal and nonfederal, may be used only to support the purposes outlined in the approved challenge grant application. Challenge grants do not include indirect cost recovery.
- Grantees are responsible for accurate internal record-keeping, for timely certification of gifts, and for submission of required reports.

Release of Federal Funds

Federal funds offered through a challenge grant must be matched by the amount of nonfederal funds indicated in the offer letter. The federal portion of a challenge grant is normally offered over three years, but the raising of matching funds occurs over a longer period. The first year's allocation will be released as matched one-to-one. Allocations for the second and third years will be released as matched one-to-one but only after the remaining prior-year's match is completed. The following chart illustrates a typical matching schedule for a first-time NEH challenge award (of $300,000, matched three-to-one by $900,000 in nonfederal donations):

Sample Release Schedule

Year 1

Year 2

Year 3

Year 4

Total

NEH funds offered

$50,000

$100,000

$150,000

n/a

$300,000

Donations needed to qualify for NEH funds offered:

Remaining match of prior year's offer

n/a

$100,000

$200,000

$300,000

$600,000

This year's match

$50,000

$100,000

$150,000

n/a

$300,000

Total to be raised

$50,000

$200,000

$350,000

$300,000

$900,000

As this example demonstrates, fund-raising responsibilities increase in the second and third years of the grant. This sample grantee must raise $50,000 within the first year to receive the NEH offer of $50,000. Before receiving any portion of the second year's offer, however, the grantee must complete the remaining match for the first year by raising another $100,000. Only then will further raised funds trigger release of the second-year federal offer. The same is true in the third year of the grant: the previous year's matching requirement must be fully met before any portion of the current year's offer can be released. The fourth year, if needed, is used by the grantee to complete the matching requirement for funds already released in year three.

Eligibility of Matching Gifts
1. General Criteria. The following criteria govern the eligibility of matching gifts. Questions about the eligibility of a gift should be raised with Endowment staff prior to certification.
  1. Gifts must be in response to or in anticipation of the challenge grant: all donors must be aware that their gifts are to be used to match an NEH challenge grant. Proof of donor awareness can be in the form of individual letters (required for all gifts of $1,000 or more--see section IV.A. for sample letter); membership or alumni solicitation mailings; newsletters; public notices regarding contributions, admission fees, or gift shop sales; posters or other publicity for fund raising events; scripts for telethons or for radio or television solicitations; or other written documentation that can be retained by the grantee.
  2. The matching gift must be used to support the purposes outlined in the approved challenge grant application. For example, a college received a challenge grant for the purpose of establishing an endowed chair in history and augmenting an endowment for library acquisitions in the humanities. If a donor contributes a piece of art to the school's museum collection even though the donor restricts it to match the challenge grant the contribution would not be eligible.
  3. All matching gifts must be given and pledges paid during the challenge grant period. A pledge made during a challenge grant can be used to release federal funds as long as that pledge commitment is paid within the grant's fund raising period and meets the other eligibility criteria. A pledge commitment made before the fund-raising period begins cannot count as match, even if paid before the grant ends.
  4. Gifts may not derive from the grantee institution itself. It is inappropriate for an institution to shift internal budgets, sell assets already owned, or reallocate internal funds for matching purposes. Income from endowed funds is not new income, and recipients may not include as part of their match any interest earned on gifts made for challenge grant purposes.
  5. Normally challenge grant funds, both the federal and nonfederal portions, are received, held, and managed by the grantee institution. Any other arrangement (for example, with university foundations, friends groups, community foundations, parallel foundations, donor-advised funds) requires advance approval from NEH.
2. Kinds of Eligible Gifts. Grant recipients have the responsibility of accounting for the eligibility of all matching funds, and their records are subject to audit. The following are the principal kinds of gifts that may be eligible as matching donations:
  1. Cash.
  2. Nonfederal grants. The grant must represent a specific response to the NEH challenge.
  3. Special legislated nonfederal appropriations from state, county, or municipal governments. The appropriation must be in response to the NEH challenge, and should represent a level of support above the normal appropriation for the grantee institution.
  4. Net proceeds from special fund-raising events or benefits held specifically to raise matching funds for an NEH challenge grant. Only the net proceeds are eligible; the intrinsic value of the items donated for auction or sale is not eligible.
  5. Membership contributions, "friends" or alumni giving, or similar campaigns. The value of any tangible items received by donors, such as magazines, newsletters, or gift "premiums," must be deducted from a membership contribution to assess the actual gift value. Membership forms or solicitation materials should indicate that contributions will be used for challenge grant matching purposes.
  6. Earned income, such as income from publication or gift shop sales. Only the net income is eligible, and such sales must be clearly identified as responses to the challenge grant. NOTE: The total amount of earned income allowed may not exceed the federal portion of the challenge grant.
  7. Marketable securities, valued as of the date of transfer from donor to grant recipient.
  8. Real estate under the following circumstances (see "Additional Documentation," section IV.C.):
    1. if converted into cash by means of sale before the end of the grant period (the value of the gift is then equivalent to the net sale value); or
    2. if income-producing and such income is restricted by the donor to the purposes of the grant (the value of the gift is equivalent to the value of the income received during the grant period).
  9. In-kind gifts or donated services are eligible only if the material or service provided is included in the approved challenge grant budget. NOTE: The total amount of in-kind gifts allowed may not exceed the federal portion of the challenge grant. (See "Additional Documentation," section IV.C.).
3. Pledges. Pledges may count toward the release of federal funds when made during the challenge grant, but all pledges must be paid and expended before the end of the grant period. Such pledges must be in writing and constitute a legally binding promise to pay (for sample pledge letter, see section IV.B.). Similarly, a nonfederal grant (gift category 2, above) may count toward matching when awarded during the challenge grant, but the award must be paid and expended before the end of the grant period. Legislated appropriations (gift category 3, above) may count toward matching when passed by the appropriate legislative body during the grant period, but the appropriation must be paid and expended before the end of the grant period. However, a contract for the sale of real estate (gift category 8, above) may not count toward the matching requirement prior to the final completed sale.
4. Ineligible Gifts. The following are examples of ineligible gifts:
  1. Gifts deferred beyond the end of the grant period.
  2. Bequests and other forms of planned giving.
  3. Discounts on goods or services provided through contracts.
Certification of Gifts
Certification is the process by which the institutional grant administrator and project director of the challenge grant testify to NEH that eligible gifts have been raised to meet the NEH challenge. The certification is reviewed by the NEH Office of Grant Management, which authorizes the U.S. Treasury Department to release federal funds to the grant recipient.
1. Internal Record Keeping for Matching Gifts. The recipient must keep on file documentation showing 1) the value of all donations; 2) the donor's awareness that the gift is being used for challenge grant purposes; 3) that the gift was received during the grant period; and 4) the expenditure of grant and matching funds during the grant period. Documentation for all matching gifts and other evidence of eligibility, such as brochures, posters, recordings, newsletters, and other publicity material, should be maintained by the grant recipient for at least three years after the NEH's acceptance of the final reports. In most instances, it is not necessary to send this documentation to NEH to qualify for the release of funds. All records are subject to audit.
  - Sample Donor Transmittal Letter. A donor transmittal letter of some type is required for all gifts of $1,000 or more. The following donor transmittal letter is a model that contributors may use:
    (Date)
    Dear (authorizing official):
    In support of your National Endowment for the Humanities challenge grant [or proposal] (#C______________), I/we hereby give the sum of $______________ to be used to match and to be expended for the approved purposes of this grant. Payment in the form of _______________________ is enclosed.
    Sincerely,
    (Signature),
    Name and Address of Donor
    In the case of donations of less than $1,000, it is not necessary to have each donor complete such a letter if the solicitation material includes sufficient information to document that the purpose of the gift is to match the NEH challenge.
2. Certification. See the original challenge grant offer letter for annual deadlines for certifying matching funds. Grant recipients are encouraged to certify matching funds at any time during the year to release all or part of that year's federal funds or simply to fulfill any portion of the matching requirement. Any matching funds certified in excess of one year's requirement will be credited toward the requirements for subsequent years and may sometimes be used to release federal funds ahead of schedule. Grantees should not certify more often than every six weeks and should not certify for less than $1,000.
  - What to Report. The certification form found in Appendix 1 is used to report the eligible matching gifts grouped according to the appropriate categories of donor (described in the next subsection). The certification form sets forth in three columns 1) the amounts, if any, of gifts previously certified and the date of the last certification; 2) the amounts of new gifts (and pledges) currently being certified; and, by adding the first two columns together, 3) the current cumulative total of gifts raised (including pledges to be fulfilled within the grant period). Before using this form for the first time, grantees should make enough copies to serve for the duration of the grant.
    The certification form is the only document necessary to certify most gifts or pledges of cash. However, certain types of gifts--real estate, in-kind donations, special appropriations, gifts from estates, alternate arrangements--require additional documentation. See section IV.C.
    The certification form must be dated and signed by both the institutional grant administrator and the project director, or, in either's absence, the person designated to act in his or her capacity. The form should normally be signed by two different persons.
    The signed and dated original and one copy of the certification form and two copies of any additional documentation should be sent to the NEH Office of Grant Management.
  - Donor Categories on the Certification Form. The categories relate to the donor source and do not specify the form of the gift.
    1. Individuals. Individual persons not included in category six (affiliated groups).
    2. Corporations and businesses. Businesses, corporations, and corporate or company-sponsored foundations. Note: Many businesses sponsor a program whereby an individual employee's gift to a cultural organization may be complemented by an additional amount from the employer. The company's gift is responsive to the initiative of the employee and can count for matching purposes. The sum of the employee's gift plus the match from the employing company should be included under category number one for gifts from individuals.
    3. Private or public foundations.
    4. Labor unions or professional or trade associations.
    5. Nonfederal government units, such as state legislative bodies or agencies, county boards, or municipal sources.
    6. Affiliated groups. Pooled rather than individual sources or other separate but associated groups. Examples include alumni associations, the class of 1943 as a group, or "friends" groups.
    7. Special events and benefits. Events such as auctions, raffles, benefit concerts, or other special fund-raising events.
    8. Other. Miscellaneous sources not classified above. If the gifts listed under this category amount to more than 10 percent of the matching requirement, please describe the donor sources in an accompanying narrative.
    Questions about determining the appropriate category of a gift should be directed to the NEH Office of Grant Management or Challenge Grants Program staff.
  - Pledges included in certification. For the gifts being certified (column 2), please indicate in parentheses how much of the total in each donor category is in the form of pledges not yet paid. As indicated in section III.C., pledges made in response to the challenge grant may be eligible as long as they are paid by the end of the grant period. If any pledge donor defaults in payment, then the grant recipient must either 1) enforce collection of the pledge within the grant period, 2) substitute and report to NEH other eligible gifts, or 3) return to NEH that portion of federal funds, plus any interest earned on those funds, left unmatched because of the defaulted pledge or pledges. Concerns about defaulting should be discussed with Endowment staff at the earliest possible time. With the submission of the final certification, the grant recipient must attest that all pledges have been paid. It is important that the grantee institution keep clear records of all payments received against eligible certified pledges to prevent duplication of those amounts in subsequent certifications.
    In the case of pledges of less than $1,000, it is not necessary to have each donor complete a separate letter (see following sample) if there is some other form of making a written pledge available through the solicitation material. For example, documentation could be in the form of a pledge card signed by the donor that contains a preprinted reference to the use of the donation to match the NEH challenge and shows the donor's address, the eligible amount of the gift, and the date by which the gift has been or will be paid (within the grant period).
    - Sample Pledge Letter. All pledges must be in writing. The following sample letter may be used and adapted to particular circumstances:
      Dear (authorizing official):
      In support of your National Endowment for the Humanities challenge grant [or proposal] (#C_____________), I/we hereby pledge the sum of $_______________ to be used to match and to be expended for the approved purposes of this grant. I/we will make payment on this gift directly to (name of grant recipient organization) on or before (date of payment), but in no event later than (grant termination date).
      Sincerely,
      (Signature),
      Name and Address of Donor
3. Additional Documentation. While the certification form is the only documentation to be sent to NEH for most kinds of gifts, certain gifts do require additional documentation to supplement the certification form. (Please note that the certification form should include the total of all gifts.)
  - Gifts of real estate:
    - a signed and dated copy of the donor's gift transmittal letter indicating whether the property will produce income or is to be liquidated in order to achieve the purpose of the grant; and
    - if the gift is converted into cash by means of sale, a copy of the bill of sale (indicating the net sale value).
  - In-kind gifts of services, materials, or other types of tangible donations:
    - a signed and dated transmittal letter from the donor, and
    - a description of the objects, materials, or services provided and their value:
      - if the gift is service, indicate the total number of hours contributed and an explanation of the value of the labor computed on an hourly basis; or if the gift is contributed materials, provide an appraisal based on standard rates.
  - Special Appropriations: a copy of the appropriating legislation that designates the funds specifically for the challenge grant. (If another form of documentation is proposed, please consult with NEH staff.)
  - Gifts from an Estate: Although bequests themselves are not eligible for match, an estate may have independent authority to designate gifts for specific charitable purposes. Before certifying such a gift, submit to NEH a copy of the portion of the will authorizing estate-determined gifts.
  - Alternate Arrangements: Any arrangement to allow an entity other than the grantee institution to receive matching gifts on the grantee's behalf, or to hold and/or manage the challenge grant funds, either federal or nonfederal, must be approved by NEH (see III.A.5). The documentation that will be required depends on the particular circumstances; please consult with NEH staff.
Failure to Meet Required Match
1. Forfeiture. If sufficient matching funds are not raised in any given year, the unmatched federal offer may be forfeited for that year. The forfeiture of some or all federal funds in any given year proportionately reduces the total matching requirement. Forfeiture of federal funds in one year does not affect the amounts of the federal offers in subsequent years.
2. Refunds. Failure to complete matching requirements in the final grant year would require the return of some federal funds.
3. Extensions. A request to extend the July 31 deadline for certification of required matching funds should be made at least by June 30. All extensions are at the discretion of the Endowment. Extensions that would defer an offer of federal funds from one fiscal year to a later fiscal year can be granted only if NEH budget and program constraints permit.
Reporting Requirements
1. Annual Certifications. The Endowment requires an annual report on each grant. Gift certification constitutes the annual report in the first and third years of a challenge grant. If a grant ending date is extended, however, a narrative report is required in each extended year.
2. Interim Performance Report. A narrative performance report is required in the second year of a challenge grant. This interim report will usually be written by the project director and should be submitted with the gift certification on or before the certification deadline for the second year of the grant. The report should include:
  1. A statement summarizing the approved plan of expenditures and enumerating the disposition (pledged, invested, or expended) of both federal and nonfederal funds for each purpose thus far. If funds are being used to create an endowment, an explanation of how the yield is being put to use should be added. Where such revenues are supporting expenditures (for example, new positions), these activities should be described in some detail. For instance, when an endowed chair is filled, the incumbent's r�sum� should be attached to the report.
  2. The effects of the grant expenditures (if any) thus far on humanities programs or activities. Any changes in the status of humanities programs or activities since the proposal was written or since the last report was submitted should be discussed.
  3. If applicable, any unexpected impact positive or negative resulting from the challenge grant.
  4. The progress of the fund raising plan, including successes, problems, and variety of fund raising techniques employed. Please append to the narrative report samples of brochures, mailings, and publicity regarding the fund raising efforts.
  5. A description of the ways in which NEH support has been and will continue to be acknowledged (see section VIII, "Acknowledgement Guidelines").
3. Final Narrative Report and Certification. The final gift certification and a final narrative report should be submitted within ninety days after the end of the grant period.
  The final narrative report should include:
  1. A summary of the total grant income (both federal and nonfederal) and of the expenditures for each purpose.
  2. An assessment of the success of the fund-raising campaign. Describe especially effective (or ineffective) strategies, and discuss the leveraging effect of the NEH challenge.
  3. An assessment of the degree to which the challenge grant has met the goals set forth in the original application. Discuss the overall impact of the grant on the institution's humanities activities and finances.
  4. A description of how the challenge grant has enhanced awareness of the humanities, both internally and for the general public. Please provide examples.
  5. A description how NEH support has been and will continue to be acknowledged (see section VIII, "Acknowledgement Guidelines").
  Accompanying the final narrative report should be a final certification form that shows that all pledges used to match the grant have been collected or that other eligible matching gifts have been substituted for uncollected pledges. Please complete the line on the certification form acknowledging this condition.
  An institution may submit a final narrative report at any time after receiving all federal funds that are due and certifying completion of its matching requirement. Please send the original and one copy of the mid-grant and final narrative reports to the NEH Office of Grant Management.
4. Follow-up Reports: While NEH requires no formal reports after the close of the challenge grant, grantees are strongly encouraged to send information on the continued progress of the activities and programs supported by the grant to the Office of Challenge Grants.
5. Extensions of Reporting Deadlines: A grant recipient may request an extension for the submission of narrative reports provided there is reasonable cause. In all cases, requests for extensions should be made in writing to the NEH Office of Grant Management at least thirty days before the deadline.
Changes to Be Requested of, or Reported to, NEH
1. Purpose of Expenditure. Changes from an approved purpose to a new purpose, shifts in the scope of the humanities activities supported by the challenge grant, or alterations in the amounts to be expended for separate categories of grant activities must be approved in advance by the NEH Challenge Grants program staff.
2. Changes in Project Director or Organization. Because the project director's involvement in the humanities activities supported by the challenge grant is crucial to their success, replacement of the project director requires prior written approval from the Endowment. Please provide the rationale for the change and the c.v. of the proposed new project director. Changes in the organization administering the challenge grant must also be approved by the Endowment.
3. Other Changes. Most other changes require simple notification. Please report to the Endowment any changes in the authorizing official, institutional grant administrator, or any other key persons involved with the fundraising, record keeping, or administration of the challenge grant; changes in addresses or telephone numbers should also be reported. Such notification may be done through correspondence with the staff of either the Office of Challenge Grants or the Office of Grant Management.
Acknowledgement Guidelines
Because all donors must be aware that their gifts are to be used to match the National Endowment for the Humanities challenge, it is crucial that all solicitations during the campaign for challenge grant donations refer explicitly and prominently to NEH and to the humanities.
Equally important, beyond the fund-raising campaign, is acknowledgment of NEH support. Unless advised to the contrary, all materials publicizing or resulting from grant activities shall contain an acknowledgment of NEH support. The acknowledgment shall also include the following statement: "Any views, findings, conclusions or recommendations expressed in this (publication) (program) (exhibition) (website) do not necessarily represent those of the National Endowment for the Humanities."
The kind of recognition will, of course, depend upon the type of activity. For example:
- All printed, graphic, or multi-media products resulting from or acquired through challenge grant support (including support in the form of income from endowment) should include a credit line indicating the National Endowment for the Humanities as a source of support.
- Exhibitions, kiosks, home pages, or other kinds of display supported through the challenge grant should include prominent acknowledgement of the National Endowment for the Humanities.
- Publicity (such as invitations, announcements, flyers, mailings, posters, and the like) for programs supported through challenge grant funds should include specific credit for the National Endowment for the Humanities.
- The National Endowment for the Humanities should be acknowledged at the beginning of any program event, lecture, presentation, or other public gathering resulting from challenge grant support.
Buildings or sites constructed or renovated with NEH support should include a prominently displayed plaque or other permanent sign recognizing support from the National Endowment for the Humanities. The National Endowment for the Humanities should be included in any list of donors in reports about fund-raising campaigns of which the challenge grant was a part.
Where appropriate, "National Endowment for the Humanities" or "NEH" may be included in the name of a position, series, classroom, library room, and other named entities. The term "humanities" should be included in names whenever possible. A professorship, for example, may be designated the "NEH Distinguished Professorship." A publication series might be named the "NEH Series in . . ." A center might be named the ". . . Center for the Humanities." You are urged to consult with staff in the Office of Challenge Grants about including the NEH designation in a name or title.
Grant recipients are urged to find other ways to acknowledge NEH support and, as importantly, bring the achievements of the humanities to public attention. Grantees are also urged to bring to the Endowment's attention information about openings, news conferences, celebrations, or other events deriving from challenge grant support.
Annual Burden to Grantees
In many cases, complying with these administrative requirements for challenge grants is part of a larger capital campaign for which such records will be maintained for all donors and gifts. It is therefore difficult to estimate how much additional time any grantee will need to meet the requirements of these awards, but the range could be estimated between a maximum of 240 hours and a minimum of five hours annually.

Appendices

Appendix 1

OMB No. 3136 0134
Expires: 6/30/06

NATIONAL ENDOWMENT FOR THE HUMANITIES

CERTIFICATION OF MATCHING GIFTS FOR NEH CHALLENGE GRANT

Certification Report No.

Grantee Organization : _________________________ Date:

The amounts entered in the columns below represent gifts received to match NEH challenge grant #C_______________ . The numbers at the left of each column correspond to the designated codes for particular categories of donor sources explained on the back of this form.

(1)
Total of matching gifts certified from column 3 ofprevious certification #_______, dated _________.

(2)
Total of additional gifts raised since last certification (include in ( ) the amount of the total pledged but not paid).

(3)
Cumulative sum of all matching gifts raised to date. (Col. 1 + Col. 2):

Donor Category Donor Category   New Gifts Donor Category

1.__________   + 1.__________________          = 1.

2.__________   + 2. __________________          = 2.

3.__________   + 3.__________________          = 3.

4.__________   + 4.__________________          = 4.

5.__________   + 5.__________________          = 5.

6.__________   + 6.__________________          = 6.

7.__________   + 7.__________________          = 7.

8.__________   + 8.__________________          = 8.

TOTAL:
___________ TOTAL:
______________                     =
TOTAL:
$___________

Donor Categories

Individuals. The total of eligible gifts donated by individual persons. These individuals may be alumni, trustees, patrons, or others not included in category number six (groups).
Corporations and businesses. The eligible amounts from businesses, corporations, and company sponsored or corporate foundations.
Note: Many businesses sponsor a program whereby an individual employee's gift to a cultural organization may be complemented by an additional amount from the employer. The company's gift is responsive to the initiative of the employee and can count for matching purposes. The sum of the employee's gift plus match from the employing company should be included under category number one for gifts from individuals.
Private or public foundations. Amounts of gifts from national, state, or community foundations.
Labor unions or professional or trade associations.
Nonfederal government units, such as state legislative bodies or agencies, county boards, or municipal sources.
Affiliated groups. The eligible amounts from pooled rather than individual sources or other separate but associated groups. Examples include alumni association, the class of 1943 as a group gift, membership fees, "friends groups."
Special events and benefits. The increased amount of net proceeds from events such as auctions, raffles, benefit concerts, or other special fund raising events.
Other. The eligible amounts of gifts from miscellaneous sources not classified above. If this amounts to more than ten percent of the matching requirement, please describe the donor sources in the annual narrative report.
Do any of the figures in column one reflect revisions of amounts in the previous certification report? Yes______ No______
If this is intended as your last certification of matching gifts for your challenge grant, do the amounts reflect only collected pledges? Yes______ No______
Reminder: Certain types of gifts require additional documentation. If any such gifts are included in amounts reported in column two, please include necessary documentation.
I certify that the information contained herein is true and correct; that all reported gifts and contributions are from new sources; that all gifts were made in response to the NEH challenge grant; and that these gifts meet the criteria for eligibility established by NEH and will be expended for the intended grant purposes. Documentation that substantiates the sources, purposes, eligibility, and expenditure of the gifts will be retained for three years following the submission to NEH of the final grant narrative report.

Signature of project director:
______________________________
Date:__________

Signature of institutional grant administrator:
______________________________

Date:__________

The Office of Management and Budget requires federal agencies to supply information on the time needed to complete forms and also to invite comments on the paperwork burden. NEH estimates that the average time to complete this form is 2 hours. This estimate includes time for reviewing the instructions and completing the form. Please send any comments regarding the estimated completion time or any other aspect of this form, including suggestions for reducing the time to complete, to the Director, Office of Publications, National Endowment for the Humanities, Washington, D.C. 20506; and to the Office of Information and Regulatory Affairs, Office of Management and Budget, Paperwork Reduction Project (3136-0134), Washington, D.C. 20503.

Appendix 2

Special Requirements for Renovation and Construction Projects Supported by NEH Challenge Grants

Letter from the State Historic Preservation Office

Applicants requesting support for the construction of a free-standing structure, for building renovations, or for additions to buildings of any age are required to consult with their state historic preservation officer to determine if a property or site is listed, or is eligible for listing, in the National Register of Historic Places. The preservation officer's eligibility determination should be included in an appendix to the application.

If a property is eligible for or listed in the National Register, the applicant should also include the preservation officer's written comments as to the effect of the project on the building or site, in accordance with the guidelines set forth in the Secretary of the Interior's "Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings." A description and/or map of the property, architectural plans, and any other documentation suggested by the preservation officer should be included in the supporting materials. If an award is made, the Endowment will meet its responsibilities under Section 106 of the National Historic Preservation Act of 1966 (16 U.S.C. 470f) as amended.

Davis-Bacon Act

If any NEH challenge grant funds, federal or nonfederal, will be used for renovation and construction projects, the institution must comply with the Davis-Bacon Act. NOTE: For purposes of compliance with the Davis-Bacon Act, there is no distinction between federal funds and nonfederal donations raised for matching. Both are subject to Davis-Bacon requirements.

In projecting your budget, be advised that any construction or renovation projects funded by federal funds, in whole or in part, are subject in their entirety to the Davis-Bacon Act as amended, 40 U.S.C. 276a-276a-5. Grant recipients are required by law to furnish assurances to the Secretary of Labor that all laborers and mechanics employed by contractors or subcontractors on Endowment-supported construction projects shall be paid wages at rates that are not less than those prevailing on similar construction in the locality, as determined by the Secretary of Labor.

Additional information is available by contacting the U.S. Department of Labor, Wage and House Division, Division of Contract Standards and Operations, 200 Constitution Avenue, NW, Washington, D.C., 20210.

Bid Guarantees and Bonding Requirements

Grantees whose contracts for construction or facility improvements exceed $100,000 are required to obtain a bid guarantee from each bidder equivalent to 5 percent of the bid price. The grantee must also require contractors to have both performance and payment bonds for 100 percent of the contract price (OMB Circular A-110, Subpart C, Section 48(c) and OMB Circular A-102, Section _.36 (h))."The cost-plus-a-percentage-of-cost" or "percentage of construction cost" methods of contracting may not be used.

Appendix 3

Challenge Grants Attachment

Procurement Procedures
All grantees shall establish written procurement procedures that provide for, at a minimum, the following procedural requirements:
1. Proposed procurements are to be reviewed to avoid the purchase of unnecessary or duplicative items. Where appropriate, an analysis shall be made of lease and purchase alternatives to determine which would be the most economical, practical procurement.
2. Solicitations for goods and services shall provide the following:
  1. A clear and accurate description of the technical requirements for the material, product, or service to be procured. In competitive procurements, such a description shall not contain features which unduly restrict competition.
  2. Requirements which the bidder/offeror must fulfill and all other factors to be used in evaluating bids or proposals.
  3. Whenever practicable, a description of technical requirements in terms of the functions to be performed or the performance required, including the range of acceptable characteristics or minimum acceptable standards.
  4. The specific features of "brand name or equal" descriptions that bidders are required to meet when such items are included in the solicitation.
  5. Preference, to the extent practical and economically feasible, for products and services that conserve natural resources, protect the environment, and are energy efficient.
3. The grantee shall make positive efforts to assure that small businesses, minority-owned firms, and women's business enterprises, are used whenever possible. Organizations receiving federal awards shall take all the steps outlined below to further this goal. This shall include
  1. placing qualified small, minority and women's business enterprises on solicitation lists;
  2. assuring that these businesses are solicited whenever they are potential sources;
  3. contracting with consortiums of small, minority-owned, or women's business enterprises, when a contract is too large for one of these firms to handle individually;
  4. using the services and assistance, as appropriate, of such organizations as the Small Business Administration and the Department of Commerce's Minority Business Development Agency; and
  5. considering in the contract process whether firms competing for larger contracts intend to subcontract with small businesses, minority-owned firms, and women's business enterprises.
4. The type of procurement instrument used, e.g., fixed price contracts, cost reimbursable contracts, incentive contracts, purchase orders, will be determined by the grantee, but must be appropriate for the particular procurement and for promoting the best interest of the program involved. The "cost-plus-a-percentage-of-cost" or "percentage of construction cost" methods shall not be used.
5. Contracts will be made only with responsible contractors who possess the potential ability to perform successfully under the terms and conditions of a proposed procurement. Consideration should be given to such matters as contractor integrity, the record of past performance, financial and technical resources or accessibility to other necessary resources.
6. Some form of price or cost analysis should be made in connection with every procurement action. Price analysis may be accomplished in various ways, including the comparison of price quotations submitted, market prices and similar indicia, together with discounts. Cost analysis is the review and evaluation of each element of cost to determine reasonableness, allocability, and allowability.
7. Procurement records and files for purchases in excess of the simplified acquisition threshold (currently $100,000) shall include the basis for contractor selection, justification for lack of competition when competitive bids or offers are not obtained, and the basis for award cost or price.
Contract Provisions
1. Grantee contracts in excess of the simplified acquisition threshold (currently $100,000) must provide for:
  1. Administrative, contractual, or legal remedies in instances where contractors violate or breach contract terms, and such remedial actions as may be appropriate.
  2. Termination for cause and for convenience by the grantee, including the manner by which it will be effected and the basis for settlement. In addition, these contracts shall also contain a description of the conditions under which the contract may be terminated for default as well as conditions where the contract may be terminated because of circumstances beyond the control of the contractor.
  3. Access by the grantee, NEH, the Comptroller General of the United States, or any other duly authorized representatives to any books, documents, papers, and records of the contractor which are directly pertinent to that specific contract for the purpose of making audit, examination, excerpts, and transcriptions.
2. All contracts, including small purchases, shall contain the following provisions as applicable:
  1. Equal Employment Opportunity
    All contracts awarded by grantees and their contractors and subrecipients having a value of more than $10,000 must contain a provision requiring compliance with Executive Order 11246, entitled "Equal Employment Opportunity" as amended by Executive Order 11375, and as supplemented in Department of Labor regulations (41 CFR, Part 60).
  2. Copeland "Anti-Kick Back" Act (18 U.S.C. 874)
    All contracts and subgrants in excess of $2,000 for construction or repair awarded by grantees and subrecipients shall include a provision for compliance with the Copeland "Anti Kick Back" Act (18 U.S.C. 874) as supplemented in Department of Labor regulations (29 CFR, Part 3). The Act provides that each contractor or subrecipient shall be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he is otherwise entitled. The grantee shall report all suspected or reported violations to the Federal awarding agency.
  3. Davis-Bacon Act (40 U.S.C. 276a to a 7)
    All construction contracts awarded by the grantee and subrecipients of more than $2,000 shall include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 276a to a 7) and as supplemented by Department of Labor regulations (29 CFR, Part 5). Under this Act contractors shall be required to pay wages to laborers and mechanics at a rate not less than the minimum wages specified in a wage determination made by the Secretary of Labor. In addition, contractors shall be required to pay wages not less than once a week. The grantee shall place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation and the award of a contract shall be conditioned upon the acceptance of the wage determination. The grantee shall report all suspected or reported violations to the Federal sponsoring agency.
  4. Preservation of Open Competition and Government Neutrality Towards Government Contractors' Labor Relations on Federal and Federally Funded Construction Projects (Executive Orders 13202 and 13208)
    Effective February 18, 2001, grantees and subrecipients awarding new construction contracts shall ensure that neither the bid specifications, project agreements, nor other controlling documents for construction contracts shall:
    1. Require or prohibit bidders, offerors, contractors, or subcontractors to enter into or adhere to agreements with one or more labor organizations, on the same or other related construction project(s); or
    2. Otherwise discriminate against bidders, offerors, contractors, or subcontractors for becoming or refusing to become or remain signatories or otherwise to adhere to agreements with one or more labor organizations, on the same or other related construction project(s).
  5. Contract Work Hours and Safety Standards Act (40 U.S.C. 327 330)
    Where applicable, all contracts awarded by grantees in excess of $100,000 for construction contracts and other contracts that involve the employment of mechanics or laborers, shall include a provision for compliance with sections 102 and 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327 330) as supplemented by Department of Labor regulations (29 CFR, Part 5). Under section 102 of the Act, each contractor shall be required to compute the wages of every mechanic and laborer on the basis of a standard work day of 8 hours and a standard work week of 40 hours. Work in excess of the standard workday or workweek is permissible provided that the worker is compensated at a rate of not less than 1� times the basic rate of pay for all hours worked in excess of 8 hours in any calendar day or 40 hours in the workweek.
    Section 107 of the Act is applicable to construction work and provides that no laborer or mechanic shall be required to work in surroundings or under working conditions which are unsanitary, hazardous, or dangerous to his/her health and safety and health standards promulgated by the Secretary of Labor. These requirements do not apply to the purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence.
  6. Rights to Inventions and Materials Generated Under a Contract or Agreement
    Contracts or agreements for the performance of experimental, developmental, or research work shall provide for the rights of the Government and the recipient in any resulting invention in accordance with 37 CFR Part 401 and any implementing regulations issued by the awarding agency.
  7. Clean Air Act of 1970 (42 U.S.C. 7401 et seq.) and the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.) as Amended
    Contracts and subgrants of amounts in excess of $100,000 shall contain a provision that requires the recipient to agree to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act of 1970 (42 U.S.C. 7401 et seq.) and the Federal Water Pollution Control Act as amended (33 U.S.C. 1251 et seq.). Violations shall be reported to the Federal sponsoring agency and the Regional Office of the Environmental Protection Agency (EPA).
  8. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)
    Contractors who apply or bid for an award of $100,000 or more must file a certification with the grantee stating that they will not and have not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant, cooperative agreement, loan, or any other award covered by 31 U.S.C. 1352. Such contractors must also disclose to the grantee any lobbying that takes place in connection with obtaining any Federal award.
  9. Debarment and Suspension (E.O. 12549 and 12689)
    No contracts shall be made to parties listed on the General Services Administration's Lists of Parties Excluded From Federal Procurement or Nonprocurement Programs in accordance with Executive Orders 12549 and 12689. These lists contain the names of contractors debarred, suspended, or proposed for debarment by agencies, and contractors declared ineligible under other statutory or regulatory authority other than Executive Order 12549.
    Grantees are required to obtain a certification regarding debarment and suspension from all subrecipients and from all parties with whom they contract for goods or services when (1) the amount of the contract is $100,000 or more, or (2) when, regardless of the amount of the contract, the contractor will have a critical influence or substantive control over the covered transaction. Such persons would be project directors and providers of federally-required audit services.
Federal Guidance
1. Buy American Act
  Consistent with the Buy American Act, 41 U.S.C. 10a-c and Public Law 105-277, grantees and subrecipients who purchase equipment and products with grant funds should purchase only American-made equipment and products.
2. Welfare-to-Work Initiative
  To supplement the welfare-to-work initiative, grantees and their subrecipients are encouraged, whenever possible, to hire welfare recipients and to provide additional needed training and/or mentoring.
3. Seat Belt Usage
  Executive Order 13043 of April 16, 1997 requires each Federal agency to encourage contractors, subcontractors and grantees to adopt and enforce on-the-job seat belt policies and programs for their employees when operating company-owned, rented, or personally owned vehicles.
Intangible Property
1. The grantee may copyright any work that is subject to copyright and was developed, or for which ownership was purchased, under the grant. NEH reserves a royalty-free, nonexclusive, and irrevocable right to reproduce, publish or otherwise use these materials for Federal purposes and to authorize others to do so (see �__36. Intangible Property, OMB Circular A-110).
  "Federal purposes" include the use of grant products in activities or programs undertaken by the Federal Government, in response to a governmental request, or as otherwise required by Federal law. However, the Federal Government's use of copyrighted materials is not intended to interfere with or disadvantage the grantee or assignee in the sale and distribution of the grant product.
  NEH may request copies of a grant product for non-profit use by the state humanities councils if the product forms an integral part of a council conducted program. These copies will be provided to the councils at the cost of reproduction and shipping, and no royalties or other fees will be charged.
2. Grantees that are awarded funds for experimental, developmental, or research work are subject to the regulations governing patents and inventions, including government-wide regulations issued by the Department of Commerce at 37 CFR part 401, "Rights to Inventions made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements."
3. NEH has the right to:
  1. obtain, reproduce, publish or otherwise use the data first produced under a grant; and
  2. authorize others to receive, reproduce, publish, or otherwise use such data for Federal purposes.
  3. In addition, in response to a Freedom of Information Act (FOIA) request for research data relating to published research findings produced under a grant that were used by the Federal Government in developing an agency action that has the force and effect of law, NEH shall request, and the grantee shall provide, within a reasonable time, the research data so that they can be made available to the public through the procedures established under the FOIA. If NEH obtains the research data solely in response to a FOIA request, NEH may charge the requester a reasonable fee equaling the full incremental cost of obtaining the research data. This fee should reflect costs incurred by the agency, the grantee, and applicable subrecipients. This fee is in addition to any fees the agency may assess under the FOIA (5 U.S.C. 552(a)(4)(A)). For additional information and definition of terms, please see OMB Circular A-110, Section.36.d.
  4. Title to intangible property acquired under a grant or subaward vests upon acquisition in the grantee. The grantee shall use that property for the originally authorized purpose and shall not encumber the property without NEH approval. NEH reserves the right to determine the disposition of the intangible property when it is no longer needed for the originally authorized purpose.
Research Misconduct
The NEH will take appropriate action against individuals or organizations upon a determination that misconduct has occurred in proposing, performing, reviewing research or reporting results from research activities funded by NEH in accordance with the NEH Research Misconduct Policy. NEH may also take interim action during an investigation.
Research misconduct is defined as fabrication, falsification, or plagiarism in proposing, performing, or reviewing research, or in reporting research results.
The grantee institution bears primary responsibility for prevention and detection of research misconduct and for the inquiry, investigation, and adjudication of research misconduct alleged to have occurred in association with its own institution.
The NEH Inspector General in most cases will refer an allegation of research misconduct made directly to NEH to the appropriate grantee institution and will rely on the grantee to make the initial response. Circumstances in which NEH may elect not to defer to the grantee institution include, but are not limited to, the following: the agency determines the grantee institution is not prepared to handle the allegation in a manner consistent with this policy; agency involvement is needed to protect the public interest; or the allegation involves an entity of sufficiently small size that it cannot reasonably conduct the investigation itself. At any time, however, NEH may proceed with its own inquiry or investigation. If the allegation of research misconduct is first made to the grantee institution, the grantee institution will notify NEH if the allegation meets the definition of research misconduct given above, and if the grantee institution's inquiry into the allegation determines there is sufficient evidence to proceed to an investigation.
At any time during an inquiry or investigation, the grantee will immediately notify the Endowment if NEH resources or interests are threatened; if public health or safety is at risk; if research activities should be suspended; if there is reasonable indication of possible violations of civil or criminal law; if Federal action is required to protect the interests of those involved in the investigation; if the grantee believes the inquiry or investigation may be made public prematurely so that appropriate steps can be taken to safeguard evidence and protect the rights of those involved; or if the research community or public should be informed.
NEH will make a finding of misconduct or take action on such a finding only after careful inquiry and investigation by a grantee institution, by another Federal agency or by NEH. In the event of a finding of research misconduct, NEH will determine what administrative actions are appropriate.
Administrative actions available include, but are not limited to, appropriate steps to correct the research record; letters of reprimand; the imposition of special certification or assurance requirements to ensure compliance with applicable regulations or terms of an award; suspension or termination of an active award; or suspension and debarment in accordance with applicable NEH and government-wide rules on suspension and debarment. In the event of suspension or debarment, the information is made publicly available through the List of Parties Excluded from Federal Procurement and Nonprocurement Programs maintained by the U.S. General Services Administration. If the NEH Inspector General believes that criminal or civil fraud violations may have occurred, the Inspector General shall promptly inform the Department of Justice.
The NEH Research Misconduct Policy is available online and upon request from the NEH Office of Grant Management at (202) 606-8494. Possible misconduct in activities funded by NEH should be reported to the NEH Office of the Inspector General, 1100 Pennsylvania Avenue, NW, Washington, DC 20506, (202) 606-8350.