Establishing a Centralized Repository
of Information on Non-U.S. Based NGOs

Project Status Report - May 2, 2008

Request for Proposal for an NGO repository host organization
Interactive map of direct grants by U.S. grantmakers to NGOs
Slide show of May 2008 Project Status Report made at COF

The Council on Foundations, the Foundation Center, Independent Sector, and InterAction are collaborating to explore the feasibility of creating a centralized repository of information that could assist U.S. grantmakers to determine if a non-U.S. based NGO is equivalent to a U.S. public charity.

The Need
Equivalency determination (ED) of U.S. charity status is one of the two options provided for under IRS rules that enable U.S grantmakers to make direct grants to non-U.S. based NGOs. Obtaining information to meet the ED rule is both time-consuming and expensive. Currently, each grantmaker collects this information individually, thus duplicating the process which in many cases has already been carried out by other grantmakers. This is done at considerable time and expense since NGOs are asked to provide variations of the same information over and over to multiple potential U.S. donors.

This has occurred because IRS regulations currently prohibit grantmakers from using another organization’s “good faith determination” and, to date there has been no broad-based agreement on standards or a process. These challenges have caused many international grantmakers to seek ways to improve and centralize the ED process so that more resources can be dedicated to helping NGOs rather than on administrative expenses.

Project Launch
In the fall of 2005 the GE Foundation initiated discussions with the Council on Foundations about the possibility of establishing a common repository of information on non-U.S. grantee organizations that could result in a more efficient way of facilitating equivalency determination by U.S. grantmakers. Subsequently the GE Foundation made a grant to the Council for a feasibility study.  

Wishing to ensure that other key segments of the philanthropic community would be involved in this effort, the Council on Foundations invited representatives of other leadership organizations to join an advisory committee to oversee the initiative. 

In Spring 2006 Information Age Associates was engaged to conduct the feasibility study, develop a written report and make a presentation to the project’s advisory committee and manage the project. 

Study Shows Strong Support for a Centralized Repository
During 2006 surveys of U.S. international grantmakers, non-U.S. NGOs and international giving service providers were conducted to identify current attitudes, practices and concerns about international grantmaking and the potential benefits of a centralized repository.
We received 79 survey responses from U.S.-based international grantmakers, 56 non-U.S. NGOs, and 8 U.S.-based international giving service providers.

In general, the survey results indicate a high level of support for the idea of creating a centralized repository that would provide a more efficient system for assessing equivalency determination.

•  86% of grantmakers and 75% of service providers report that “The availability of a centralized repository of vetted non-U.S. based NGO information would be a significant benefit to U.S. philanthropy.”

•  76% of grantmakers and 74% of service providers would favor establishing a centralized repository of non-U.S. based NGO information.

•  87% of NGOs, 79% of grantmakers and 75% of service providers agree that “The existence of a centralized repository would streamline the process of NGOs becoming eligible to receive grants.”

•  98% of NGOs report that “We would submit key information about our organization and officers to a central repository and keep it up-to-date.”

•  86% of NGOs report that “We would prefer to submit our NGO information to a centralized repository rather than to each grantmaking organization individually.”

• 77% of grantmakers agree that “An IRS letter ruling that would approve the centralized repository would be a key factor in our decision to become a member.”

Naturally, that support is tempered with many questions about the workability, reliability and sustainability of such a centralized repository.

Click the links below for a copy of the feasibility study's December 2006 report, the detailed survey results, and recommendations.

NGO Repository Feasibility Study - Findings and Recommendations
Appendix A - International Grantmaker Detailed Survey Results
Appendix B - NGO Leader Detailed Survey Results
Appendix C - Service Provider Detailed Survey Results

To view this report you'll need the free Adobe Acrobat Reader.

Project Phase Two
On the basis of the positive response to the surveys, the advisory committee is now actively engaged in the second phase of the initiative in 2007 that will address the critical operational issues identified in the report and implement the next steps recommended at its conclusion.  

The first phase of the initiative during 2006 was funded by a $50,000 grant from the GE Foundation. In addition to receiving continuing support from the GE Foundation, the second phase of the project is also being funded by the F.B. Heron Foundation and the Firelight Foundation.

Developing Consensus on Key Requirements
In May 2007 a meeting was conducted with the legal counsel of many of the largest international grantmakers to identify their key requirements for a centralized repository. In June 2007 an Exploratory Committee was established to assist in recommending key operational requirements. Members currently include:

To date the committee has been very successful at developing consensus on key requirements for a repository.

Meeting with the IRS
On September 12, 2007, representatives of the Council on Foundations, Independent Sector, and the Foundation Center, as well as the Kellogg, Rockefeller and GE foundations, met with officials of the IRS Exempt Organizations Division to discuss the Centralized Repository Project.

The participants explored operational and legal issues related to establishing a centralized repository of information on foreign non-governmental organizations. Such a repository could help grantmakers in making equivalency determinations of foreign grantees. The discussion focused on how the repository would work and how it might be sustained.

The IRS representatives raised no objections to the project and indicated a willingness to review a more detailed plan for the repository at the appropriate time. They also noted that they had envisioned creating just such a repository when Revenue Procedure 92-94 was issued 15 years ago to describe how a grantmaker might craft an affidavit to establish equivalency for a foreign grantee. IRS officials indicated that, should the agency approve the repository, grantmakers could rely on the equivalency determination information stored there. The officials also said they would consider various means of communicating that fact to grantmakers.

Request for Proposal (RFP)
The project has now published a Request for Proposal (RFP) for a repository host organization that could serve as the repository’s host and to provide all of the necessary services on an ongoing basis. This is described in a joint press release. 

Interactive Map of Direct Grants by U.S. Grantmakers to Non U.S. Recipients
As part of our work on this project, the Foundation Center has created an interactive map showing more than 20,000 grants totaling over $5 billion awarded to more than 9,000 non-U.S. recipients. The map is available at http://kdg.fdncenter.org/international/IntlNumber.php.The map includes a sample of the grants awarded between 2003-2008 by more than 600 larger independent, corporate, or community foundations and grantmaking public charities.

The vast majority of grants included in this sample are over $10,000. While this sample includes only a portion of the direct cross-border grants made during this period, it provides a picture of giving to non-U.S. recipients. Included are grants reported to the Foundation Center by the foundations themselves or captured from public records.
 

Providing Report and Project Feedback
We are very interested in getting your feedback on this report's findings, recommendations and next steps so that we can continue to make informed decisions.

Click here to share your comments and feedback.
If you provide your contact information we'll then
keep you updated on the project's progress in 2008.

 

For more information contact:

Martin Schneiderman
Project Director
Information Age Associates
47 Murray Place
Princeton, NJ 08540 USA

Tel:  609 924 6936
Fax: 609 924 6993
E-mail:
Web: www.iaa.com

Search iaa.com Search WWW