Passthrough Funding 

Passthrough funding is the term used to describe scenarios where funds received from a grantor are distributed to a third-party “business partner” – that is, the funds are not consumed directly by the grantee.

There are two main scenarios in passthrough funding:

·        Recipient Scenario

The funds can be expended by recipients who may or may not have to pay them back. Recipients apply for the money, but do not report back their expenses. Cost sharing/IDC rules do not apply. The terms of the original grant are satisfied by demographics of the recipient.

Examples include welfare grants, student loans, and small business loans.

·        Subgrant Scenario

Incoming grant funds are distributed to subgrantees based on an application. The grantee and subgrantee set up a new grant that inherits the terms of the grant. 

The SAP solution for passthrough funding includes an Object Mapper. You use this to assign Grantee Management account assignment elements to each other for the purpose of defining a passthrough relationship.