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Recently our key funder, ACL, released information on using grant funds to purchase incentive items as part of the program of a center. While this FAQ answers the pressing question of incentives related to CDC and ACL funds and COVID-19, the guidance could be considered in other situations as well. You are expected to have a well-designed incentive program, so a written policy and procedure should back up your practice. Some key points:

  • Grantees may use federal funding to establish one or more incentive programs.
  • Incentives should be used in “limited circumstances” to meet program goals.
  • Gift cards, gift items, giveaways and prizes may be used. Cash gifts are not allowed with funding under the CARES Act and from the CDC Vaccine funding
  • When using gift cards you must avoid appearing to endorse, or that HHS or ACL endorses a specific company.
  • Your records must clearly show how each gift card is distributed, verifying that they were used for the purpose of the program and weren’t for example, recycled into petty cash or used for staff or board incentives not related to your incentive program.
  • Your program should address potential ethical considerations, including potential conflicts of interest by board and staff.
  • You must be able to show that the expense charged to your federal grant is reasonable and necessary, and if it supports goals in more than one grant, is properly allocated across your funding sources.

ACL recommends that grantees consider the following seven elements in designing an incentive program:

  1. Proposed Incentive: i.e., what incentive will be provided?
  2. Justification: what is the purpose for the incentive and what is the specific reason for selecting this incentive? What evidence indicates that an incentive is needed, and what evidence suggests that the selected incentive will be effective at achieving the desired result?
  3. Anticipated gains: explain how providing such an incentive will defray societal costs or have a positive return on investment, for example by increasing overall participation. Additionally, describe potential unintended negative consequences and how those are outweighed by the benefits.
  4. Defined amount: cost per person and total allocated funding for the recipient incentives.
  5. Qualifications for issuance: what makes a person eligible for the incentive? Does it take into consideration issues related to equity in your community?
  6. Method of issuance and tracking: how will the incentive be delivered? Does the proposed plan and implementation align with any relevant policies and procedures governing your organization (e.g., procurement, ethics, etc.)? How will the budget and supply be tracked? Can the grantee assure usage will only be for allowable expenses?
  7. Method of evaluation: how will the incentive plan be evaluated for effectiveness?

One last thought. While you cannot guarantee how an individual will spend a gift card incentive, you can communicate your expectations that it will assist them in meeting the unique needs presented by the pandemic.

Can I use grant funding to establish incentive programs? New FAQ released.

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