Passthrough Funding

Passthrough funding is the term used to describe scenarios where funds received from a grantor are distributed to a third-party, known as a “business partner”. 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/indirect cost rules do not apply. The terms of the original grant are satisfied by the recipients’ demographics.

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

  • Subgrant Scenario

    The distribution of incoming grant funds to a subgrantee is based on an application. The grantee and subgrantee set up a new grant that inherits the terms of the original grant.

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