Definition of external funding

Section 20 of the University Act states that Aarhus University may receive grants and gifts from sources other than the appropriation acts, and may engage in income-generating and grant-financed activities. These grants and funds are referred to as external funding.

External funding is used for financing of projects::

  • of research-related interest
  • of non-research-related interest
  • involving cover of expenditure for performed commissioned activities


Externally financed projects are subdivided into:

  • non-commercial activities wholly or partially financed by an external funder
  • commercial activities wholly financed by the client


If you are about to start a new externally financed project and are in doubt as to whether it is a commercial or a non-commercial project, you can find information and guidance in the Miniguide: Commercial or non-commercial activity (In Danish).

It is important to establish whether your project is a commercial or a non-commercial activity, as this has an influence on the rules applying in relation to:

  • rights to research data
  • compensation claims
  • calculation of overheads
  • co-financing options
  • VAT liability


The project is defined as either a commercial or a non-commercial activity, based on information in the application and the contract on the nature of the project and on project-related rights and finances.

The aim of the miniguide (in Danish) is to ensure that you and your department avoid major financial surprises during the course of the project and that AU complies with the external regulations in the field.

Income-generating activities (IV) or commissioned activities

  • research-related DFS 2
  • non-research-related DFS 2


Income-generating activities include projects of a commercial nature fully financed by the client.

The project must be a natural offshoot of the university's ordinary activities, and depending on the circumstances, it can be of research-related interest or purely commercial exploitation of the university's expertise or equipment.

The following conditions must at the same time be met for it to be an IV project:

  • The circle of clients must not be obliged to take delivery of the goods or services in question.
  • The institution must be able to separate the production of goods or services, which is performed as part of income-generating activities, from the institution’s other assignments.
  • The areas of income-generating activities must derive naturally from the institution’s general activities (i.e. they must fall within its natural area of expertise).
  • • The price of individual goods or services must be such that it does not constitute distortion of competition with private or public-sector competitors, and such that long-term average costs are covered. The established overhead rate and price calculation form must be used.


As income-generating activities must be fully financed by the client, co-financing via ordinary funds cannot take place.

For VAT-related questions, please see guidance on VAT at Aarhus Universitet (in Danish).

Detailed rules on income-generating activities can be found in section 2.6.8 of the budget guidelines (in Danish), and in the price calculation guidelines (in Danish).

At Aarhus University, the regulations are described under income-generating activities (in Danish), and in the leaflet miniguide on commercial or non-commercial activities (in Danish). 

Grants - External funding

  • research-related DFS 4
  • non-research-related DFS 5


Grant-financed funds are subdivided into:

  • Grant-financed research activities
  • Grant-financed activities


The financing sources are subdivided into:

  • EU framework programmes

    • EU framework programmes

      All relevant parts of the instructions apply to EU framework programmes, but help is available from the Research Support Office, incl. guidance on special procedures and standard information in connection with applications, preparing contracts, signing contracts, submission of accounts and auditing concerning EU framework programmes.

      In connection with EU framework programme projects, the project creation form is initiated by the Research Support Office. The Research Support Office then sends the form to the project finance administrator, and then the form is sent to the Projects unit in Financial Control for central project creation.

      More information on how to create H2020 projects in the financial management system (for project finance administrators) is available here (in Danish).
       

  • Private contributions (donations with an application)

    • Private contributions (donations with an application

      Private donations and grants are defined as funding from private individuals, private companies and self-governing institutions, whose capital base does not originate from the state, organisations and non-state funds and scholarships. Scholarships set up for private grants but managed by Aarhus University are also included.

      Please be aware of donations, i.e. funding, for which there is no requirement regarding the purpose of the use, or any subsequent requirement regarding academic or financial reporting. These donations are recognised as income directly under ordinary funding - read more under guidelines on gifts & scholarships.
       

  • Public foundation and programme funding

    • Public foundation and programme funding

      Public foundation and programme funding is defined as public funding, e.g. from research and innovation programmes such as Independent Research Fund Denmark.

      These are funds normally assigned following an application, i.e. in competition with other institutions.
       

  • Cooperation agreements

    • Cooperation agreements

      Cooperation agreements are defined as agreements entered into between Aarhus University and public institutions and/or private companies, with both parties putting resources into the project. The external party's contribution should not be regarded as payment for an actual service/product but as a subsidy for the activity.

      In accordance with the guidelines, a cooperation agreement is an agreement between the university and an external partner on a joint research project characterised by:

    • both parties contributing services of financial value

    • the external party also contributing with knowledge within the specific field

    • the parties retaining the rights to their own results

    • the university's input constituting a continuation of the normal research activities within the subject area or research environment in question

      all the above items being simultaneous conditions that must be met for it to be classed as a cooperation agreement.

      Read about AU's guidelines on cooperation agreements..
       

  • Gifts & scholarships – with and without a specific purpose

    • Gifts & scholarships – with and without a specific purpose

      In a small number of instances, Aarhus University (AU, faculty, department/school or centre) receives grants and gifts for which the donor does not require anything specific in return and where the grant/gift is not intended to cover a specific project or topic during a given period.

      In some instances, researchers at Aarhus University also receive personal grants, gifts, prizes and scholarships that they wish to transfer to the university, with or without stating any specific purpose.

      Read about AU's guidelines on receipt of gifts and scholarships.
       


In grant-related research activities, Aarhus University must have a research-related interest in participation in the project.

Distinction between the various grant-financed funds takes place in Aarhus University's accounting system.

Divisional financial statement 4 in the accounting system includes projects of research-related interest to Aarhus University, while divisional financial statement 5 comprises projects of interest to Aarhus University.

Overall, the same rules apply to the grant-financed activities as to the grant-financed research activities.

There is a possibility of co-financing from Aarhus University's ordinary funds.