Global Grantmaking Made Easier

For too many grantmakers, the cost and complexity of vetting organizations around the world has restricted the scale or ambitions of their international grantmaking programs. Perhaps the expense of using outside counsel has made certain grant opportunities cost prohibitive. Or, the organization may have worried about the risks of funding grantees in countries with ill-defined rules on charitable activities.

For other grantmakers, the complexity of such vetting may have kept them from making international grants at all. Perhaps their staff didn't have the capacity, legal expertise, or language skills needed to pursue documentation from grant candidates in a variety of countries. Or, the organization may have only been able to award grants in amounts large enough to justify the cost of hiring an intermediary to assess if a foreign organization were qualified to receive the grant.

Your grantmaking — and, really, all grantmaking — shouldn't be held back by those kinds of limits.

Changing regulations to streamline international grantmaking

International grantmaking poses challenges not found in domestic giving. In the U.S., grantmakers are required to comply with IRS regulations. These rules often lead U.S. grantmakers to make an equivalency determination (ED) to assess whether an intended foreign grantee is equivalent to a U.S. public charity. To complete an ED, the grantmaker must collect a set of detailed information about the grantee's operations and finances and make a reasonable determination of its equivalency, based on U.S. federal tax law.

Until recently, the ED process had been subject to rules that had been unchanged for 20 years. Often expensive, complicated, and duplicative, the ED process could be a burden on both grantmakers and their global grantees.

In 2012, as a result of efforts led by the Council on Foundations and TechSoup Global, the U.S. Department of the Treasury and the IRS proposed significant rule changes to make international giving easier, more cost effective, and less redundant for both U.S. grantmakers and non-governmental organizations (NGOs).

Concurrently, TechSoup Global and the Council on Foundations worked together — alongside other leaders in the philanthropic community — to create NGOsource, which today helps grantmakers streamline their international giving through efficient equivalency determinations. While NGOsource is specifically designed to address U.S. tax law requirements, its collaborative methods and high standards of diligence are a model for the entire sector.

Where streamlined global grantmaking leads

When global grantmaking is easier, it becomes more accessible to grantmakers of all sizes and at all levels of experience. Additionally, more NGOs around the world may qualify for grants from U.S. grantmakers, a chance to increase the diversity of innovative solutions brought to address pressing global issues. By streamlining global grantmaking, NGOsource aims to inspire a significant increase in cross-border philanthropy. The NGOsource team is honored to announce some of the inaugural members:

• The Rockefeller Foundation 
• Intel Foundation 
• The William and Flora Hewlett Foundation 
• Give2Asia 
• The Greenbaum Foundation 
• Schwab Charitable 
• Aimee and Frank Batten Jr. Foundation 
• Carnegie Corporation of New York 
• Open Society Institute 
• MetLife Foundation 
• National Philanthropic Trust 
• The San Diego Foundation 
• The Institute for New Economic Thinking 
• The Summit Charitable Foundation 
• V. Kann Rasmussen Foundation 
• Unbound Philanthropy

This distinguished group is among the first to benefit from NGOsource. A fast-growing membership means expedited and easier international giving as our repository of certifications grows and certifications can be used again by different members. Already, both NGOs and grantmakers have minimized the administrative overhead and hassle of their grants processes.  In fact, even though NGOsource just launched in March 2013, its innovative approach has already resulted in NGOs themselves encouraging adoption of the service by all of their grantmakers. NGOs quickly realize the significance of the cost and time savings they experience by submitting their information once to a centralized repository, rather than multiple times, in multiple formats, to multiple grantmakers.

What does streamlined global grantmaking look like for your organization?