Learn about Funding, Planning, and Budgets
Learn about estimating the costs, assessing funding, and planning budgets for an international program at Columbia University.
When estimating the costs, assessing funding, and planning budgets for an international program, University departments must consider a range of factors beyond those associated with domestic programs. Planning should address:
- Special requirements of gifts and/or grants (sponsored projects) that would support the program;
- How funds will be received from their source and conveyed to the host country and the length of time that funds will be available to support a program; and
- Items and other considerations which are unique to international programs, like currency fluctuations and expenses associated with program closing and exiting the host country. This includes tools that can help with budgeting funds for an international program.
Gifts are voluntary, irrevocable, gratuitous transfers of money or other property to support Columbia programs or activities. Gifts can be unrestricted or restricted. Generally, funds from private, non-governmental sources (including foreign governmental agencies) are to be administered as gifts when the funding source neither expects nor requires consideration in return for the transfer of funds to Columbia.
Grants (or funds for Sponsored Projects)
Sponsored projects include research, instruction and training, public service, fellowships and other scholarly and creative activities conducted under the direction of Columbia faculty and staff and funded by an outside source in accordance with award instruments containing very specific provisions, restrictions, and reporting requirements.
Regardless of the type of funding, the transfer of funds from another country to Columbia could carry requirements or trigger taxes that should be considered before any agreement for the gift or grant is accepted or signed.
For more information regarding the differences between gifts and sponsored projects, individuals should refer to the relevant section of the Sponsored Projects Handbook.
Where assistance is required in making a determination as to whether a particular source of funds is a gift or a sponsored project, University departments should contact their assigned Sponsored Projects Administration (SPA) Project Officer. SPA will work with the Office of Alumni and Development (OAD) in making the determination.
Flow of Funds
When considering applying for a grant (sponsored project) or accepting gifts from U.S. or international sources, it is necessary to understand the logistics and implications for the way these funds might be sent and received:
Origin (U.S. or International)
Funds can be accepted from countries outside the U.S. The University department should vet the origin of funds with regards to legal and regulatory requirements with the Office of the General Counsel as early as possible.
Receiving funds directly in the U.S. ensures that the University can use existing resources to:
- Manage reporting and bookkeeping
- Ensure grant is accounted for appropriately
- Document expenditures
- Ensure payouts are in accordance with process
- Minimize the university’s exposure to sovereign risks
- Minimize vulnerability to political and social events
- Minimize exposure to local bank risks
Absence a compelling reason, it is Columbia's practice to receive grants and gifts in the U.S. and in U.S. dollars (US$).
Funds could be received by the University in several ways.
- The vast majority of federal awards are funded under letters of credit administered by Sponsored Projects Finance (SPF) based on reports of reimbursable charges in the Accounting and Reporting at Columbia (ARC) system.
- Some federal and many non-federal agencies remit payments to the University based on fixed payment schedules.
- Some sources may transfer funds to the University upfront, but funds are replenished to the department's account based on the expenditures and projected needs that are documented through Accounting and Reporting at Columbia (ARC).
The cycle for spending and replenishing funds is established by agreement with U.S. banks and government or donor institutions. Through this cycle, the University recovers administrative costs for the central operations that support these programs. In instances when grants or gifts originate from international sources, the added step of moving funds between countries needs to be incorporated into the regular operational needs of the program (including the lag time due to wiring internationally) and it must incorporate a process to collect the funds to cover both department and central costs.
Receiving the funds in U.S. dollars ensures that the University can:
- Maximize cash and liquidity management centrally
- Minimize the university’s exposure to Foreign Exchange (FX) currency risk
FX and Currency Fluctuation Risks
A sponsored project’s budget is a financial estimate of the project’s statement of work and is recorded in the ARC system in U.S. dollars (USD). However, many expenses will be incurred locally at the host country and in local currency, which will result in variance to the budget.
It is necessary to review foreign exchange rates, for the host country currency on a regular basis in order to anticipate impact to the budget. It is recommended that you create a revised budget closer to award stage (also called “Just-in-Time” stage), as currency exchange rates may have changed since your original proposed budget. Additionally, Departments are responsible to develop and adjust program budgets so that the impact of currency fluctuations are covered through anticipated sponsor payments. Keep in mind that there could be fluctuations after the end of program operations and before the receipt of final sponsor payments, which can take months. Departments are cautioned to monitor fluctuations and adjust budgets throughout the life of sponsored projects.
Long-term projects and sites may have difficulty repatriating funds to the U.S. If it is necessary to fund or capitalize an international project beyond what is necessary for immediate expenses, first consider how to recover any unspent funds that may remain at project’s end. The program budget must include all costs associated with the closing and exit of the program from the host country.
For additional details on these costs, see Special International Costs and Budget Planning on this page.
Costs and budget planning for international programs can vary and must take into account the many legal, tax, and safety implications of moving and spending money across national borders.
In addition, international projects often involve costs associated with obtaining foreign permits and approvals and fulfilling regulatory requirements.
Refer to the Guidelines on Special Costs for International Programs for additional details regarding these and other costs.
The Budget Planning for International Programs tool can be helpful in evaluating a budget in light of these considerations.
When estimating costs for a particular host country, it can be helpful to consult with other University departments that previously implemented programs in the same location or another location with similar characteristics. Contact Global Support if you require assistance in coordinating a meeting.
Contact Global Support if you require assistance.