To be classed as a donation or grant, a receipt of funds or assets must have been freely given, with no consequent obligation on the University to provide goods or services to the benefit of the donor.
Income is often described as a 'donation' when in reality, if you look a little deeper into where it has come from and why you may find that it is not. Therefore, in deciding whether income may be treated as donation income, Departments need:
It is not always easy to differentiate a donation from a research grant. As a general rule, a research grant will be for a specific piece of research activity e.g. to examine the relationship between shark migration and global warming, whereas a donation will be much more general e.g. to fund the research and other activities of Professor Plum.
Additionally a research grant:
Trading income is income earned by a department from either another university department or an external customer, for the provision of goods or services, or for the use of space or facilities. Therefore, for the income to be a donation it is important to ensure that a funder, or provider of a grant, receives nothing in return.
The provision of regular reports to the funder of how their donation is being invested/used does not in itself constitute a supply of services. Similarly, it is acceptable for the donor to be recognised for their gift e.g. a small plaque mounted on a wall, or a building named after them. However if the donor's logo is on constant display, or other benefits are received, then the income starts to move away from that of a donation and into the region of sponsorship/advertising.