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Finance record 2017/18 - Notes on research income from charities for all Research England-funded HEPs (and HEPs in Northern Ireland) receiving recurrent funds for research

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Finance record 2017/18 - Notes on research income from charities for all Research England-funded HEPs (and HEPs in Northern Ireland) receiving recurrent funds for research

Version 1.1 Produced 2018-11-15

Contents:

  1. The following notes of guidance are to assist all Research England funded HEPs and HEPs in Northern Ireland (receiving recurrent funds for research) in completing information on research income from charitable foundations and trusts for the following columns on Table 5:
    • UK-based charities (open competitive process),
    • EU-based charities (open competitive process),
    • Non-EU-based charities (open competitive process).
  2. Research England will be using research income from charities collected in the HESA Finance record to inform the charity support element of its quality-related research (QR) allocations.
  3. Eligibility criteria

  4. Two main eligibility criteria apply to the income underpinning these allocations:
    • Research income which is awarded through open competition, excellence and priority using a method of external peer review.
    • Research income which is awarded by a charity registered in the United Kingdom or an overseas body with exclusively charitable purposes.
  5. Open competition and external peer review

  6. For income to be treated as awarded through open competition and peer review, there needs to be evidence that a particular income stream or grant was available to more than one higher education provider (HEP) through direct competition, within a process where no credible candidate was excluded, and awarded to the HEP which demonstrated the highest-quality research proposal according to external peer review. However, grants will also be accepted as complying with open competition and external peer review in circumstances where it can be shown that the charity took external expert advice on its choice of HEP to receive a grant, and either:
    • The charity had made it known that it was open to grant applications from other HEPs and these would present a competing call on the funds, even though the charity did not issue an open invitation to bid for the particular grant in question.
    • The charity restricted the funding opportunity on a reasoned basis that there were particular requirements of the project that could only be met by a limited number of HEPs. This could arise, for example, where a project required highly specialist expertise or facilities, or a specific regional focus.
  7. A long-term grant or funded programme awarded in open competition will be eligible under these columns for a maximum of seven years. Thereafter, it will only continue to be eligible under these columns if the grant competes with other demands on the charity's funds and is subject to external peer review at intervals of no more than five years.
  8. Where the length of a research grant or contract awarded in open competition is extended by more than a year part way through the project, the following criteria should be met at the point at which the contract is extended for the grant to continue to be eligible under these columns:
    • Any extra funding awarded for that project should compete with other demands on the charity's funds, and there should be an external peer review process to agree that the project can be extended.
    • Where no additional funding is awarded there should be an external peer review process to agree that the project can be extended.
  9. For income from endowments given to an HEP for the purpose of research to be treated as awarded through open competition and peer review, there needs to be evidence that the donation was made following some reasonably rigorous process taking expert advice and comparing the merits of the receiving HEP to others.
  10. Charitable purposes

  11. Only research income which is awarded by a charity registered in the UK (these are charities registered with the Charity Commission for England and Wales, Scottish charities registered with the Office of the Scottish Charity Regulator and charities in Northern Ireland recognised as having charitable status by HM Revenue and Customs or registered with the Charity Commission for Northern Ireland) or an overseas body with exclusively charitable purposes, consistent with the definition set out in the Charities Act 2011 and which exists for the public benefit in a manner which is consistent with the Public Benefit Guidance published by the Charity Commission for England and Wales is eligible.
  12. In practice, determining whether or not each and every grant from an overseas body satisfies this test may be unduly burdensome. It is therefore recommended that HEPs begin by identifying whether the awarding body has charitable status in its home jurisdiction. In most cases this will serve as an adequate proxy for the criteria described above. However, HEPs should pay close attention to any bodies which seem to be in danger of not satisfying the test of eligibility in England and Wales, either because their objectives appear to be on the margins of the definition described above (for example, groups campaigning for political change) or because they are based in a jurisdiction where the definition of charity may be significantly different to that which prevails in England.
  13. Charity funding derived from government sources

  14. The charity support element of Research England and DfE(NI) funding is not intended to support research that is already funded from public sources. Where a charity exists to allocate public funds, or where a charity allocates funds which come wholly or mainly from public sources, this income is not eligible.
  15. So, income awarded by the Royal Society and the British Academy from grants made to them by the UK government to be disbursed on its behalf should be returned under Table 5 Column 1h (BEIS Research Councils (other)). However, income awarded by these bodies and funded from non-government sources should be returned under Table 5 Column 2 (UK-based charities (open competitive process)) or Column 3 (UK-based charities (other)) where the HEP has received confirmation from the awarding body that the grant or contract was not government funded. Similarly, income awarded by the Education Endowment Foundation, from grants made to them by the UK government to be disbursed on its behalf should be returned under Table 5 Column 4 (UK central govt bodies/local auth, health & hospital authorities). However, income awarded by this body and funded from non-government sources should be returned under Table 5 Column 2 (UK-based charities (open competitive process)) or 3 (UK-based charities (other)) where the HEP has received confirmation from the Education Endowment Foundation that the grant or contract was not government funded.
  16. Other factors

  17. Where a grant or contract is held across more than one HESA Cost Centre, its value should be divided in proportion to the number of grant or contract holders.
  18. Though HEPs in the UK have charitable status, they should not be regarded as charities here. Likewise, overseas HEPs should also not be regarded as charities. Research income from other UK HEPs should be returned under Column 7 (UK other sources) in Table 5. Research income from overseas HEPs should be returned under one of the following columns in Table 5: Column 11 (EU (excluding UK) other) and Column 14 (Non-EU other).
  19. Income awarded through initiatives funded jointly by Research England/HEFCE and UK-based charities, such as the UK Research Partnership Investment fund (UKRPIF) or Catalyst fund, should not attract additional financial support from Research England's charity support element of research funding. Research England decides its level of contribution to these initiatives at the time of their establishment, taking sustainability into account. In order to identify the co-investment from charities that should be deducted from the calculation of Research England charity support funding, HEPs should return any co-investment from charities on these projects, (that has been included in Heads 1 to 4 of Table 5), under Head 5 (Co-investment from external sources on funding council-funded projects) of Table 5.
  20. For universities in Northern Ireland, the elements of grants awarded from the Support Programme for University Research that are provided from Atlantic Philanthropies should not be returned under any of the charity columns for grants awarded through an open competitive process.
  21. The charities listed below provide very substantial amounts of research funding across a number of HEPs and their grants were found in all Research England's audited cases to have met the eligibility criteria:
    • Arthritis Research Campaign
    • British Heart Foundation
    • Cancer Research UK
    • Diabetes UK
    • Leukaemia Research Fund
    • The Health Foundation
    • The Leverhulme Trust
    • The Wellcome Trust.
  22. Research England will seek assurances directly from these charities that their grants in general continue to meet the criteria for open competition and external peer review, and that they will make known any potential exceptions to this. In order to improve the efficiency of administering the charity element of Research England research funding and the associated data audits, HEPs should generally regard income from these charities to meet the criteria for open competition and external peer review. HEPs will remain responsible for ensuring that all returned income is eligible.
  23. This is not intended to be an exhaustive list of charities whose grants generally meet the criteria of open competition and external peer review, and Research England would normally expect that members of the Association of Medical Research Charities would meet these criteria.

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