FAQ on Use of Older Americans Act Funding for Incentives

July 20, 2021

Businesses, non-profit organizations, and research entities have long used incentives to raise awareness and 

encourage participation in their programs and services. Incentives such as gift cards, vouchers, giveaways, or 

prize items can motivate an individual to take action when they may not have otherwise.

Within the aging network, incentives can be a useful tool. When used thoughtfully, they can increase the 

success of many programs. State Units on Aging (SUAs), Area Agencies on Aging (AAAs), and tribal 

organizations may use incentives to:

• Promote awareness of programs and services within the community.

• Increase participation in programs and services (e.g., congregate meals, physical activity classes, 

nutrition education workshops, caregiver support groups, and evidence-based disease prevention and 

health promotion programs).

• Increase participation in research or evaluation projects that show the value of the SUA, AAA, or tribal 

organization’s work.

The purpose of this FAQ is to provide Older Americans Act (OAA) grantees with a basic understanding of the 

most common types of incentives and how to use them effectively.

Q: Can an SUA, AAA, or tribal organization use OAA funding to establish one or more incentive 

programs?

A: Yes. Gift cards, gift items, giveaways, and prizes may be used in limited circumstances to meet the 

programmatic goals of the OAA. If an SUA, AAA, or tribal organization chooses to allow and implement an 

incentive program:

• All costs of the incentive program must meet Federal Cost Principles when purchased with OAA funds 

(i.e., costs are reasonable, allowable, and allocable).

• The program must adhere to all Uniform Administrative Requirements, Cost Principles and Audit 

Requirements for HHS Awards found at 45 CFR 75 and other applicable federal laws and regulations.

• State, local, and tribal policies, procedures, and requirements may be more restrictive than OAA and 

other federal laws, regulations and policies, and these state and local restrictions must be adhered to.

• Consideration should be given to purpose of the incentive, how it will be used effectively, sustainability, 

evaluation, and equity.

Q: Can the incentive be cash?

A: No.

Q: Can the incentive be a gift card?

A: Yes. While gift cards are allowable, they can present several challenges in security and accounting. In 

addition, such incentives are not and should not be portrayed as an endorsement by HHS or ACL of any 

company (or its goods, services, or policies) associated or affiliated with the incentive. For example, if an 

incentive is funded by grant funds, a general purpose pre-paid card (e.g., one issued by a credit card network 

brand) would more clearly separate the incentive from appearing to be an endorsement vs. a card to be used

only at a specific store or with a specific company. To the extent practicable given the proposed incentive, such 

non-endorsement should be clearly articulated.
Q: Is there a limit to how much the incentive can be?

A: While there is no specific dollar amount limit, the amount of the incentive must be allocable and reasonable. 

Policies and procedures should be developed to ensure adherence to 45 CFR 75 and other applicable laws 

and regulations. A policy related the maximum amount of an incentive should be included in the policies and 

procedures developed.

Q: What, if any, reporting must an SUA or tribal organization do if it chooses to provide incentives?

A: ACL requires the SUA or tribal organization to report information related to the use of OAA funding in its 

annual programmatic reporting. Incentive programs may be mentioned in the reporting categories according to 

the programmatic guidance provided on expenditures. Financial reporting is also required as outlined in the 

grant’s terms and conditions included in the Notice of Award.

Q: Specifically, what should an SUA, AAA, or tribal organization think about and plan for before 

implementing an incentive program?

A: ACL recommends that SUAs, AAAs, and tribal organizations consider the following seven elements in 

designing an incentive program: 

a. Proposed Incentive (i.e., what incentive will be provided?) 

b. Justification (i.e., 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?)

c. Anticipated gains (i.e., 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)

d. Defined amount (e.g., cost per person and total allocated funding for the recipient incentives)

e. Qualifications for issuance (i.e., what makes a person eligible for the incentive? Does it take into 

consideration issues related to equity in your community?) 

f. Method of issuance and tracking [i.e., 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?] 

g. Method of evaluation (i.e., how will the incentive plan be evaluated for effectiveness?)

Q: Can an SUA or AAA use ARP Title III-B funding to incentivize older adults to be vaccinated (first 

shot, second shot, or potential booster)?

A: Consistent with the purpose of the ARP Title III-B funding that allows for vaccination activities, the terms of 

the ARP awards as provided in the Notice of Award, and applicable grants regulations and policies, non-cash 

incentives may be considered to encourage participation in COVID-19 vaccination.