Ask Us : FAQ

As we refine NGOsource and await regulatory approval, we’d like to share more details about our planned equivalency determination (ED) service. If you have a question that is not answered below, please contact us.

Services and Benefits

When will NGOsource's service launch?

We hope to launch our service in 2012. Launch timing depends on regulatory approval. Currently, we are refining the systems needed to operate the service.

What are the benefits of using NGOsource instead of internal staff?

By using NGOsource, your staff will be able to devote more time and energy to your grantmaking programs and to deepening relationships with your grantees. In addition, because you will pay for ED processing only when you need it, you may be able to lower your internal costs.

With our bench of experts, your EDs will be evaluated in a consistent way and our services will be available year-round, without interruption for staff vacation or turnover. In addition, pending regulatory approval, we expect that the liability for the evaluation will shift from your organization to NGOsource.

What are the benefits of using NGOsource instead of a legal firm or external counsel?

First, because NGOsource is operated by TechSoup Global, a 501(c)(3) nonprofit organization, we focus on keeping the cost of ED to a minimum. And, because NGOsource will process so many EDs, we can take advantage of economies of scale.

Secondly, using NGOsource can also help improve grantee experience because our partners offer superior NGO support, interacting with NGOs in their own language and during their office hours whenever possible.

In addition, by using NGOsource's ED services, you will help us centralize, standardize, and streamline the ED process, which will benefit the entire philanthropic community.

Will NGOsource evaluate the NGO’s effectiveness or the quality of its services?

No. NGOsource will focus on supporting strong relationships between grantmakers and their grantees by facilitating a streamlined ED process. NGOsource will not evaluate the effectiveness or quality of the NGO because this is not part of IRS requirements. Grantmakers should connect with their intended grantee directly to discuss the services they provide and to evaluate their programs.

Will NGOsource review the accuracy of the NGO's financial statements?

Because current IRS requirements do not require audited financial statements for equivalency determination, we will not verify the accuracy of such information provided by the NGO. However, we will review the financial information provided by the NGO, checking that the 5-year financial numbers provided in the NGO Questionnaire correspond with the organization's annual budget number and appear to be reasonable. We will also review the sources of the NGO’s reported grants and funds to ensure that each grantor organization is properly classified under the rules for publicly supported organizations.

Will NGOsource conduct OFAC list or terrorism checks?

No. USA PATRIOT Act OFAC list and terrorism checks are not IRS requirements for equivalency determination, though they should be conducted by the grantmaker before making international grants. Grantmakers’ risk assessment and due diligence standards vary considerably in this area, so agreement on a universal standard is unlikely. That makes it challenging for NGOsource to standardize an appropriate level of service. Finally, a grantmaker's staff are in a better position to research, determine, and decide on false positives. For more information, visit the USIG anti-terrorism compliance section.

What can be done to encourage grantmakers to fund NGOs that are not yet certified by NGOsource?

We expect grantmakers will continue to fund foreign NGOs, as they do now, based on the strengths of their programs and leadership and their fit with the grantmaker's funding strategy. We believe that grantmakers will make their funding decisions regardless of whether a foreign NGO has already been certified by NGOsource.

In our 2009 survey, 83 percent of international grantmakers said their international grants would increase or stay the same if an equivalency determination service like NGOsource were available. We hope this projected increase in funding will include a larger number of organizations.

In addition, we expect that grantmakers will continue to fund organizations and programs for which ED is not ideal or possible.

Why won't NGOsource provide expenditure responsibility?

Expenditure responsibility, also called ER, is simply too specific to each grantmaker's particular grant agreement with an NGO. Thus, there are few economies of scale that could effectively reduce costs to the grantmaking community.

Can I get a grant from NGOsource?

No. NGOsource does not provide grants or assist with fundraising. We encourage grantseekers to visit the Foundation Center, which offers a wealth of resources for grantseekers, including information about international grants.

ED Standards and Liability

How can we assure our lawyers and auditors that EDs issued by NGOsource can be relied upon?: Pending regulatory approval, we expect the liability for the evaluation will shift from your organization to NGOsource. Also, the regulatory changes we have requested articulate clearer standards for the conduct of EDs. NGOsource will at all times adhere to all IRS requirements for ED.

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What standards of diligence will NGOsource use to complete an ED?: NGOsource will adhere to the IRS equivalency determination standard for a U.S. public charity as prescribed by the applicable IRS regulations. This will include the pending NGOsource IRS Private Letter Ruling and Revenue Procedure 92-94, as it may be amended by the U.S. Department of the Treasury. What is — and isn't — included in NGOsource's equivalency determination services will be largely determined by the IRS and U.S. federal law.

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Who will make the equivalency determination?: NGOsource's team — comprised of qualified, highly trained professionals — will review and analyze the NGO's information and issue the equivalency determination.

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Will NGOsource be audited?: Yes. Independent auditors will conduct annual audits.

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The ED Request Process

How long will an ED by NGOsource take?: Our average turnaround time is 4 to 6 weeks. This time is primarily determined by the responsiveness of the NGO, which varies widely. For this reason, we will ask grantmakers to introduce their intended grantees to NGOsource as part of the ED request process. Re-determination of NGOs that have been previously certified by NGOsource will take significantly less time. In contrast, our research indicates that the average ED processing time without NGOsource ranges from several weeks to a few months.

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What could delay my ED request?: Typically, lack of responsiveness by your intended grantee causes the greatest delay.

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If I'm on a deadline, will you be able rush my ED request?: Expedited ED requests will not be available. If you are interested in NGOsource offering this service in the future, please contact us.

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How will you keep me updated on the status of my ED request?: NGOsource members will be able to log in to the Grantmaker Portal at any time to check the status of their ED requests. Statuses are shown in aggregate format in a graph, and you may drill down to see further details about individual ED requests. Additionally, NGOsource will send your primary contact an email whenever your attention is needed, such as if one of your intended grantees has been consistently unresponsive.

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How will I know when you've finished my ED request and made a determination?: Grantmakers will receive an email when the determination is made. Grantmakers will also be able to check the status of their ED requests anytime using the Grantmaker Portal.

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I already have EDs for my grantees. Will I be able to give them to NGOsource to add to the database?: Unfortunately, no. Under U.S. law, we will not be able to indicate that an NGO is ED "certified" unless NGOsource has conducted its own review. You'll need to request a new ED through NGOsource. But, in some cases, we may be able to use grantee information that you provide. Please contact us to discuss your particular situation.

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Will you be able to tell me if NGOsource already has an ED on a specific NGO?: NGOsource members will be able to search our online database at any time to find out if a specific NGO has an equivalency determination and if it is currently certified.

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Will I be able to I see a list of all the EDs that are in process?: NGOsource members may see the status of their EDs requests as they are being processed but not the status of EDs requests by other grantmakers. Once an ED has been completed by NGOsource, the new certification status and expiration date will be visible to all NGOsource members (but not the general public). For privacy reasons, members will not be able to see which grantmakers initiated the ED request.

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The NGO's Experience

What will the NGO need to do during the equivalency determination process?

After receiving an introductory emails from the grantmaker and NGOsource, the NGO will first log in to the questionnaire using the username and password provided in the email. Then, it must complete the questionnaire, which collects information required by U.S. law and is helpful in the analysis for ED. The NGO must also provide certain legally required documents, which include governing documents and financial information.

The NGO will be supported during the process by one of our partners around the world. Upon completion of the questionnaire, the NGO will receive an email verifying that NGOsource has received the information. The NGO will be contacted after this point only if its submission was incomplete or if our experts determine that further information is required.

How will NGOsource help my intended grantee?

Your intended grantee will be assigned to one of our partners, who will provide customer support by email and phone and, whenever possible, in the NGO's language. The NGO may also refer to our online FAQ about the ED process, deadlines, completing the questionnaire, and the documentation requirements.

If your NGO's email or internet access is unreliable, we will provide other options to help it complete the questionnaire.

What languages are spoken by NGOsource's partners?

At launch, NGOsource will support English, Spanish, Hindi, Mandarin Chinese, and French. We will add additional languages in the future, based on international grantmaking trends and on demand from NGOsource members.

Why do the NGO's governing documents need to be in English? Will NGOsource do the translation ?

U.S. law requires that the NGO's governing documents be in English. We will not provide translation services, but NGOsource members and their NGOs will be able to access a complimentary list of referrals to translation resources for the most commonly used languages. However, you may use any translation service you prefer.

Due to the high variability of translation costs, grantmakers or their NGOs will need to hire a translation company directly and cover the costs of the translation themselves. As is required by the IRS, NGOsource will conduct its ED review based solely on the translated governing documents provided by the NGO and will not be responsible for verifying the accuracy of the translation.

Will the NGO be able to modify its answers to the questionnaire?

Once the NGO's staff have confirmed that its questionnaire is complete, it will not be able to go back and edit the responses. In rare cases of obvious error, we may allow corrections to be made.

How long does the NGO have to fill out the questionnaire and submit its documents?

After we send the NGO its introductory email, it will have up to 2 weeks to complete its initial login to the NGO Questionnaire. This time frame takes into consideration the technological limitations that many NGOs face. During this period, the partner assigned to the NGO will send it regular reminders to log in. Once the NGO has successfully logged in, it will have an additional 2 weeks to begin and complete the questionnaire and submit the required documents. Our partner will be available to provide continual support throughout the process.

During these critical pre-login or post-login phases, if the NGO is persistently unresponsive, NGOsource will contact the grantmaker to let them know about the situation. We will usually ask the grantmaker to help by reaching out directly to its intended grantee to encourage the NGO to take action.

How will you help my intended grantees if they have unreliable email or internet access?

Whenever possible, we will ask the NGO to complete its questionnaire online. However, we do not want unreliable, infrequent, or slow email or internet access to negatively affect an NGO's ability to successfully complete its questionnaire or its opportunity for ED certification.

An NGO with limited internet access will be able to go online to print the questionnaire after answering a few screening questions. Or, if internet access is nonexistent, the NGO may ask its NGOsource partner to mail or fax the questionnaire. In either case, the NGO can complete the questionnaire by hand and mail or fax it to the partner, along with the required documents. The NGO may also ask the partner to take down its answers to the questionnaire by phone.

Grantmakers will be able to help by letting us know if the NGO has unreliable internet or email access when making the initial ED request. They can also encourage such an NGO to use the print or mail option to return the questionnaire. It is possible that these types of ED requests will take longer than the typical average of 4 to 6 weeks.

What will happen to the ED request if my intended grantee is unresponsive?

We consult with the grantmaker extensively before deciding to end an ED request. We expect termination of an ED request to be very rare. NGOsource will end an ED request only after the NGO has not responded in any way over a 2-week period and despite multiple attempts to contact the intended grantee by NGOsource, its partner, and the grantmaker.

The grantmaker may arrange for NGOsource to continue our efforts to reach the NGO after this 2-week period for an additional fee. Or, the grantmaker may later make a new ED request if it believes the NGO is now able to be responsive. Alternatively, the grantmaker may choose to use the expenditure responsibility (ER) process themselves.

Making the Determination

How difficult is it for a foreign NGO to qualify as equivalent to a U.S. public charity?

While there is no guaranteed outcome, we anticipate that most ED requests will result in successful certification. NGOsource will educate members about the criteria for ED so that they can determine which NGOs are not likely to qualify as equivalent to a U.S. public charity.

Why would a foreign NGO be "not certified" as equivalent to a U.S. public charity?

The four most common reasons that an NGO cannot be certified under U.S. law are: (1) political activity, (2) excessive lobbying, (3) improper dissolution clauses, and (4) failure to meet public support requirements. In addition, NGOsource will be unable to issue an equivalency determination if the NGO is not responsive to our requests for information or fails to provide all the required materials.

What will happen if my intended grantee cannot be certified as equivalent?

NGOsource will provide you with a report that explains which equivalency determination provisions were not satisfied. You may notify your intended grantee directly or can ask NGOsource to explain the decision to the NGO.

Although our decision is final, the grantmaker may later make another ED request for the same NGO if it believes the NGO has been able to rectify the stated problems. Alternatively, a grantmaker wishing to make a grant to an NGO that could not be certified may still consider using the expenditure responsibility (ER) process. NGOsource does not provide ER.

The information about non-certification is kept confidential from the general public and other NGOsource members. No one will know that the NGO went through the ED process with NGOsource. However, in the rare case that another grantmaker requests an ED for the same NGO shortly after non-certification, we may need to disclose to that grantmaker the reasons the NGO was not certified. For example, if the NGO reported fraudulent financials to us, we would inform a new grantmaker of this once it formally requested an ED. In such cases, we will in no way identify the grantmaker that made the initial request.

Since the NGO was determined "not certified," do I get a refund?

Unfortunately no. The cost is the same, regardless of outcome. To reach the determination, NGOsource and our partners apply the same quality of research, analysis, and support to all requests.

ED Certificate and Documentation

What will a grantmaker need to document NGOsource's equivalency determination?

Upon regulatory approval of NGOsource, we anticipate that an electronic or hard copy of the ED Certificate will be the only record that a grantmaker needs for legal purposes and regulatory compliance. The certificate will be issued in the name of the NGOsource member and cannot be shared outside the member organization.

Certificates will be available through the Grantmaker Portal as a PDF and may be printed, downloaded, or integrated with your grants management software. You will not need to keep other diligence materials, though you may refer to them via the Grantmaker Portal

How long will my ED Certificate be valid?

It will vary, depending on many factors. The validity period will be what is allowed by the law and will be clearly shown on your ED Certificate. Typically, the certificate is valid for 1 year after the end of the NGO's previous fiscal year.

Will I be notified when my ED Certificate is about to expire?

Yes. Both the primary and secondary contacts on your grantmaker account will receive multiple emails well in advance of the expiration. You will need to keep your contact information up to date so you do not miss these important emails.

Once the ED Certificate has expired, if you visit the Grantmaker Portal, you will see an "expired ED certification" status next to the NGO's name.

After the ED Certificate expires can I still make a grant payment to my NGO?

According to U.S. law, unless the ED is certified and valid at the time of your grant payment, you will need to use another grantmaking method. If your ED Certificate will expire before you need to make your next grant payment, we recommend that you request an ED renewal at least 2 months in advance of your next grant payment.

Will I be able to get a copy of the supporting documentation used in the ED?

Grantmakers may choose to access the governing and financial documents of their NGOs via the online Grantmaker Portal. Because you are legally responsible for all information about the NGO you receive, you may prefer to turn off access to this information.

Can we transfer the ED Certificate to another grantmaker?

Unfortunately, no. Pending regulatory approval, each ED Certificate will be valid only for the NGOsource member named on the certificate and will not be transferable. If the ED certification in NGOsource's database is valid at the time of their request, other grantmakers may be able to get their own ED for the same NGO for the "currently certified" ED processing fee.

Membership

Who can be a member of NGOsource?

NGOsource is primarily designed for U.S. grantmakers that give international grants. These grantmakers include public charities, private foundations, corporate foundations and donation programs, independent foundations, community foundations, donor advised funds, family foundations, re-granting organizations, philanthropic service providers, "friends of" organizations, U.S. government agencies, and individual donors.

If you are a grantmaker that does not fit the types above, please contact us.

Can philanthropic service providers join NGOsource?

Yes. However, please bear in mind that ED Certificates can only be issued in the name of the organization that is the NGOsource member, which should be the payer of the grant funds. Therefore, if you are a philanthropic service provider that will not make the grants to NGOs yourself, you will need to set up an NGOsource membership for each grantmaker you serve, even if they are making grants to the same NGO. On the other hand, if you are the payer of the grant funds, you will only need one membership in your name.

We recommend that philanthropic service providers contact us to discuss their interest in NGOsource or subscribe to our newsletter. We will send an email when NGOsource's service launches.

Can donor advised funds (DAF) join NGOsource?

Yes. Using NGOsource's ED service will help you determine with confidence the eligibility of a foreign NGO. However, please bear in mind that ED Certificates can only be issued in the name of the organization that is the NGOsource member, which needs to be the payer of the grant funds. Therefore, if you are a DAF that does not disburse funds, you will need to set up an NGOsource membership for each donor you serve, even if they are making grants to the same NGO. On the other hand, if you are the payer of the grant funds, you will only need one membership in your name.

We recommend that DAFs contact us to discuss their interest in NGOsource or subscribe to our newsletter. We'll send an email when NGOsource's service launches.

Can individual donors join NGOsource?

Yes. We will welcome individuals who would like the extra level of diligence that equivalency determination provides. Subscribe to our newsletter and we'll send you an email when NGOsource's service launches.

How will NGOsource help small grantmakers?

NGOsource's cost-effective ED services will help make it possible for grantmakers with few or no staff to make grants to the NGOs that matter most to your donors and trustees, regardless of where they are in the world. NGOsource will allow you to keep your operational overhead to a minimum while enhancing your philanthropic efforts by making grants to non-U.S. NGOs.

Subscribe to our newsletter and we'll send you an email when NGOsource's service launches.

I work for a U.S.-based nonprofit or public charity. Can we join NGOsource?

Yes. Equivalency determinations can provide an extra level of diligence for your nonprofit's grantmaking activities. We recommend that you contact us to discuss your interest in NGOsource or subscribe to our newsletter. We'll send you an email when NGOsource's service launches .

Pricing

How much will NGOsource cost?

Grantmakers will pay an annual membership fee based on the number of EDs they expect to request in a year and an ED processing fee each time they request an ED.

We are focused on keeping your costs to a minimum. Fees cover the actual costs of processing your ED request, including the cost of supporting your NGO as it completes its NGO Questionnaire. More information is available on our Pricing page.

How does the cost of NGOsource's EDs compare with other providers?

NGOsource is operated by TechSoup Global, a 501(c)(3) nonprofit organization, with a focus on keeping the cost of an equivalency determination (ED) to a minimum. Our fees are competitive and significantly less than the typical cost of external legal fees, which can range from to $5,000 to $10,000 per ED, according to our 2009 survey. While EDs may be available at lower prices, such EDs may not be fully compliant with IRS regulations, do not account for the costs of your program and finance staff's time, and often provide little to no NGO support.

How do I figure out the right membership tier for my organization?

The appropriate membership tier is based on the number of EDs you expect to request in a year. The average of the non-U.S. grants you made over the last 3 years can usually provide an accurate estimate of the number of EDs you will need. Once you have this estimate, refer to the Membership Fee information on our Pricing page to find the membership tier that best corresponds to your estimated number of EDs.

What will happen if I exceed the number of EDs allowable in my membership tier?

NGOsource will notify you before you exhaust the volume-discounted EDs you are allotted in your membership tier. You may upgrade by paying the incremental fee to reach the next membership tier. If you have reached your allotted number but not upgraded your membership tier, you will still be able to request EDs but they will be charged at the non-discounted rate.

I'm making a multi-year grant. Will I be able to pay up front for the first ED and also the renewal EDs?

No. Although a grantmaker may intend to renew a grant over multiple years, that decision may change. Also, we hope that the notification to renew the ED will encourage those grantmakers who may be less familiar with international grantmaking requirements to conduct other diligence steps before renewing a grant. However, if there is enough demand for this service from NGOsource members, we may add this feature in the future. If you are interested, please contact us and let us know.

If two grantmakers support the same NGO, will we be able to split one ED processing fee?

Because EDs cannot be shared under U.S. law, pending regulatory approval, NGOsource can only issue an ED Certificate in the name of one organization. Each ED Certificate will be valid for only the named NGOsource member. Other grantmakers may join NGOsource and request a ED for the same NGO in their name at any time. The fee for the subsequent request will be either the "currently certified" or the "re-determination" ED processing fee, depending on the timing of the request.

Privacy and Data Security

How secure is NGOsource and its data?

NGOsource is hosted on secure enterprise servers. All internet data transmissions are implemented with Secure Socket Layer (SSL). You are welcome to contact us if you have specific questions.

Who will be allowed to see an NGO's information?

NGOsource recognizes the legitimate safety and security concerns of NGOs and grantmakers due to the nature or location of their work. We are committed to protecting the information entrusted to us.

We use a secure technical infrastructure and restrict access to data. Only NGOsource members will be able to access our information about NGOs we have certified. To ensure that only legitimate grantmakers become members, all membership applications will be reviewed by NGOsource staff. Unless they request an ED for a specific NGO, members will only be able to see an NGO's name and country. An NGO's detailed information — such as contact information, list of activities, and budget — will only be available to grantmakers who request, pay for, and receive an ED for that NGO.

Any statistics we share publicly about our ED services will express data in aggregate only. Only personnel at TechSoup Global, which operates NGOsource, will have regular access to an NGO's information. The NGOsource partner assigned to an NGO will have access to the NGO's information only while it is supporting that NGO as it completes its questionnaire.

An NGO also has the right to decline to provide information for an ED request; however, this will prevent NGOsource from making the ED decision.

Please contact us if you have specific concerns.

Definitions and Terminology

What is an NGO?

NGO stands for non-governmental organization. While there is no universally agreed-upon definition of an NGO, typically it is a voluntary group or institution with a social mission, which operates independently from government.

NGOs or similar organizations exist in all parts of the world. What is considered an NGO in one country may not qualify as an NGO in another, as legal definitions, permitted activities, monitoring, and oversight differ from country to country. The term can encompass many types of organizations.

Although these terms are not necessarily interchangeable, an organization similar to an NGO may be called: nonprofit, a charity, non-profit organization (NPO), civil society organization (CSO), citizen sector organization (CSO), social benefit organization (SBO), advocacy organization, voluntary organization, grassroots support organization (GSO), and non-state actor (NSA). You may also hear the terms independent sector, volunteer sector, and civil society during discussions about NGOs.

What is equivalency determination?

Equivalency determination (ED) is a process by which a U.S. grantmaker evaluates whether an intended foreign grantee is the equivalent of a U.S. public charity, as required by the IRS. If the foreign grantee is equivalent, the grantmaker may lessen or eliminate restrictions on the use of grant funds by that grantee.

Read "What is equivalency determination?" for more details.

What is expenditure responsibility?

Expenditure responsibility (ER) is a set of grantmaking and monitoring procedures and requirements designed to ensure that grant funds are used for charitable purposes. These procedures and requirements enable U.S. grantmakers to make grants to foreign organizations that are neither recognized as 501(c)(3) public charities by the IRS nor the equivalents of U.S. public charities.

Read "What is equivalency determination?" for more details on ER.

What is an equivalency determination information repository (EDIR)?

The equivalency determination information repository (EDIR) concept was presented to the IRS by the Council of Foundations in December 2009 in the request "Proposed Revisions to Revenue Procedure 92-94" (PDF). Upon approval of the proposed revisions, EDIRs would be authorized, IRS-reviewed bodies that would help ensure that charitable grants abroad are used exclusively for exempt purposes.

EDIRs could collect information on non-U.S. organizations and issue equivalency determinations (ED) upon which third parties could rely. EDIRs would use a rigorous methodology that would remain in compliance with applicable regulations and laws.

NGOsource would be such an EDIR.

What is the Grantmaker Portal?

The Grantmaker Portal is the entry point for members into NGOsource. This easy-to-use online system allows members to request and manage their equivalency determinations in a central location.

What is the ED Certificate?

The ED Certificate will be NGOsource's legal record that documents that a specific NGO is certified as equivalent to a U.S. public charity under the IRS' equivalency determination standards. The ED Certificate will be specific to one NGOsource member and has a set validity period.

You can learn more in our FAQ section on the ED Certificate and documentation.

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