Aid Grant Assets: Who Owns NGO Equipment at Closeout

A vehicle bought with grant money may carry the NGO's logo, be registered in the NGO's name and have been maintained by the NGO for five years. None of those facts necessarily answers the legal question of who may keep, sell or transfer it when the grant ends.

The same problem applies to laptops, generators, solar systems, laboratory equipment, medical devices and furniture. Programme teams tend to think in terms of use: "we bought it for the project." Finance teams think in terms of the asset register. Donors may think in terms of the grant agreement. Local authorities may look only at the name on a registration certificate. Close-out becomes difficult when those answers point in different directions.

The first task is to separate possession, registration and ownership

Possession means who physically holds the asset. Registration means whose name appears on a government or other formal record. Ownership or title is the legal right to the property. They often sit together, but not always.

A donor may require a locally registered NGO to register a vehicle in its own name because only that entity can complete local registration, insurance or customs procedures. The grant agreement may nevertheless reserve title to the donor or require donor approval before disposal. Conversely, a donor may describe equipment as "donor-funded" without actually retaining ownership after purchase.

The NGO should therefore avoid conclusions based only on stickers, invoices or registration cards. The legal answer usually begins with the grant terms and then has to be tested against mandatory local property, registration, customs and tax law.

Read the asset clause before the budget line

Modern grant agreements can be very specific. The Cabinet Office's December 2025 model agreement, for example, requires specified property to be entered in an asset register with acquisition, cost, location, identification and disposal information. Under that model, the public authority can retain title to property acquired or improved with grant money unless the parties document a transfer or another ownership arrangement. Disposal is also subject to advance written approval.

USAID's Standard Provisions for Non-U.S. Nongovernmental Organizations likewise contain a mandatory provision on title to and use of property. The detailed rule depends on the award and property category, but the wider lesson is the same: grant-funded property is governed by more than the organisation's ordinary purchasing policy.

An NGO should therefore identify the property clause before the first major purchase. If the agreement requires donor title, approval or post-project transfer, the finance and logistics systems should capture that requirement from the beginning.

The asset register is evidence, not just inventory

An asset register should do more than prove that the laptop exists. At close-out it should help answer who funded it, which agreement governs it, where it is, who has custody, whether it is insured, whether it was imported under a tax or customs exemption, and what approval is needed for disposal.

The Cabinet Office model's asset register requirements are useful because they include acquisition date, description, cost, location, serial or identification numbers, title documents, disposal date, proceeds and transferee. Those fields turn a spreadsheet into a legal trail.

For vehicles, the file should also contain registration and logbook records, insurance, import documents and any donor correspondence about title. For IT equipment, serial numbers and data-erasure records matter. For medical or laboratory equipment, maintenance status and the capacity of a proposed transferee to use the item safely may be as important as market value.

Donor-funded does not always mean donor-owned

The phrase "donor asset" is often used too casually. Some grants transfer title to the recipient when the property is purchased but restrict use or disposal. Others retain donor title until close-out. Others require the recipient to hold property for programme purposes and later request disposition instructions.

The organisation should therefore use precise language in its own records. An asset can be "purchased with Donor X funds" without the record declaring that Donor X is the legal owner. The ownership conclusion should be supported by the agreement.

This precision also prevents accidental promises. A staff member should not tell a local ministry that "the NGO will donate all project vehicles" before checking whether the donor must approve the transfer.

Disposition is a process, not a final-day decision

Recent events provide a strong practical warning. In 2026, the USAID Office of Inspector General published a series of audits on assets under terminated awards. Its Southern Africa audit identified unapproved disposition plans and limited controls over high-value assets. Reports concerning Egypt and Haiti examined plans to donate, transfer or retain assets and found problems involving incomplete disposition or uncertainty about whether some assets could be used as intended. A July 2026 OIG review highlighted incomplete inventories, unclear guidance, sensitive and high-value property, limited staff capacity and the value of close-out audits.

The lesson for NGOs is not limited to USAID awards. When funding stops quickly, assets become vulnerable to loss, informal transfer and poor documentation. The correct response is to freeze disposal until the applicable rules are identified and approvals obtained.

Transfer approval should answer more than "to whom?"

A donor may permit a vehicle or laptop to be transferred to an implementing partner, government office or beneficiary institution. The NGO should still ask whether the proposed recipient can legally own and use the asset, whether the transfer creates tax or customs charges, whether insurance can be changed, and whether the asset remains appropriate for the intended purpose.

Sensitive assets require additional care. Armoured vehicles, communications equipment, laboratory devices, medicines or equipment containing personal data may create security, licensing, export-control, safety or privacy concerns. A transfer letter alone may not be enough.

Where the donor approves transfer, the file should record the asset description and serial number, condition, value where required, legal recipient, date, authority for the transfer and evidence of physical handover. The NGO should update its accounts and register at the same time.

Selling an asset can create a second grant issue

A grant may allow sale but require donor consent, market-value procedures or repayment of part of the proceeds. The Cabinet Office model, for example, contains provisions addressing disposal proceeds and the donor's proportionate financial interest.

An NGO should therefore not assume that money received from selling an old project vehicle becomes unrestricted income. The sale proceeds may themselves be subject to the original grant conditions. Tax may also arise, and a vehicle imported under exemption may face customs consequences if transferred or sold before a permitted period ends.

These questions should be resolved before a buyer pays. Reversing an unauthorised sale is far harder than delaying it.

Local title documents and donor terms can conflict

The hardest cases are those where the logbook says the local NGO owns the vehicle but the donor agreement says the donor owns all grant-funded assets. The answer depends on the legal effect of each instrument under the relevant national law. A contract may create obligations between donor and NGO even if local registration is necessary to establish title against third parties. In other cases, mandatory registration law may determine legal ownership in a way the contract cannot simply override.

The NGO should not solve that conflict informally. It should obtain a written donor position and, where value or risk is significant, local legal advice. An amendment, transfer instrument or disposition certificate may be needed to align the records.

The same principle applies where the programme agreement and a subgrant disagree. A prime recipient cannot lawfully give a subgrantee better title than the prime agreement permits. The hierarchy of agreements should be checked.

Dissolution rules can add another layer

If the organisation itself is closing, residual-asset rules under NGO or charity law may apply after debts and donor claims are resolved. Kenya's Public Benefits Organizations Act, for example, requires remaining assets on dissolution to be transferred to another public benefit organisation with similar objectives. That does not mean a donor-restricted vehicle can simply be placed into the residual pool. Donor rights, secured interests, tax obligations and other liabilities must be dealt with first.

The board should therefore separate "grant close-out assets" from "residual organisational assets." They may eventually overlap, but only after the grant restrictions are settled.

A clean close-out file should make the answer obvious

By the final day of the grant, a reviewer should be able to pick any material asset and trace its story from purchase to final disposition. The file should show the invoice, funding source, asset-register entry, title or registration documents, location, donor rule, approval, transfer or sale evidence and accounting treatment. If the asset was lost or damaged, the incident and insurance record should be there as well.

This level of documentation is not bureaucracy for its own sake. It protects the donor, the NGO, the eventual recipient and the staff who handled the property. It also prevents a common governance problem in which vehicles and equipment become disputed precisely because everyone remembers who used them but nobody can prove who had the right to decide their future.

The practical rule is straightforward: never wait until the grant ends to ask who owns the assets. The answer should be built into the procurement and asset records from the day the item is bought.

Source note. This article draws on the UK Cabinet Office Model Grant Funding Agreement published in December 2025, particularly its asset-register and disposal provisions; USAID Standard Provisions for Non-U.S. Nongovernmental Organizations on title to and use of property; USAID Office of Inspector General reports issued in 2026 on asset disposition following terminated awards in Southern Africa, Egypt and Haiti, and its July 2026 key observations on foreign-assistance assets; and Kenya's Public Benefits Organizations Act as amended in 2025. Local property, registration, customs and tax law remain decisive for individual assets.

Suggested citation: 

Ronald Serwanga, “Aid Grant Assets: Who Owns NGO Equipment at Closeout” East Africa Legal Insight (4 September 2026).