What is program income and how is it handled?

• A. Income earned from grant-supported activities; often used for program purposes and program controls
• B. Income generated from investments
• C. Income must be returned to agency
• D. Income is not allowed in grant programs

Answer: (A)

Program income is money earned directly as a result of the grant-supported activities. It’s treated as funds that help support the program itself and the controls around how the funds are used. In practice, you typically use this income to advance the project’s goals and to strengthen program administration and compliance. How it’s handled can vary by grant terms: you may add the program income to the award to fund additional activities, or you may use it to offset the federal share of the project, depending on the specific agreement. The key idea is that income generated by the funded work is allowed and expected to support the program, not simply kept as profit or sent back unreliably.

Income from investments isn’t considered program income for most grant purposes, and program income isn’t something that must always be returned to the agency or is categorically not allowed; those descriptions don’t reflect how program income is used to sustain and expand grant-supported work.