After years of anticipation, we at NGOsource were uplifted and proud to hear the U.S. Department of the Treasury and Internal Revenue Service issued final rules on equivalency determinations (EDs), the reliance standards for making good faith determinations about non-U.S. charities, on September 25, 2015.
Advocating for Cost Effective Global Grantmaking
These regulations are a direct result of years of advocacy by the Council on Foundations (the Council), TechSoup Global, and leading foundations on behalf of the charitable sector in an effort to reduce barriers to global grantmaking. The Council’s president and chief executive officer, Vikki Spruill, also shared the Council's positive view of the the new rule and NGOsource in light of our joint advocacy and goals.
The regulations mirror written and oral comments submitted to the IRS and Treasury department by the Council and TechSoup, outlining how an ED repository allows for economies of scale and simplifies international giving to make it more cost-effective for foundations, donor advised funds (DAFs), and charities to give to non-U.S. NGOs.
Affirming the NGOsource Approach
ED repository. These rules finalize the proposed regulations first issued in September 2012, upon which experts have been relying in the interim. Interpreting the proposed regulations as paving the way, TechSoup launched NGOsource as the first-ever ED repository in March 2013. The final regulations further strengthen grantmakers’ ability to confidently rely on EDs provided through our repository because they strongly affirm the unique approach that NGOsource has taken to provide ED repository services from the time we launched.
Qualified tax practitioners. Specifically, the regulations reinforce NGOsource’s decision to staff our ED repository with qualified tax practitioners (QTPs), i.e., the attorneys in charge of our legal review process. Our legal team, led by Sheila Warren, general counsel, and Meghan Hanson, associate general counsel, has advised leading international grantmakers on tax and exemption for decades. They bring unparalleled qualifications to our ED service. We are heartened to see the government deepen its support for reliance on qualified experts to ensure the highest quality in the analysis of EDs.
Donor advised funds. The final rules also confirm that sponsoring organizations of donor advised funds (DAFs) can use these regulations as guidance in making EDs. NGOsource’s DAF members can continue to confidently rely on ED services provided by NGOsource, as they have in the past.
Two years. Moreover, the regulations allow grantmakers to rely on EDs issued by QTPs, such as NGOsource’s attorneys, for two years, confirming our current practice. Robert Wexler, principal with Adler & Colvin, explained the details of the regulatory basis last week.
Questions? Let Us Know
We are excited to share this affirmation of the regulatory context for NGOsource as a shared repository of EDs. We will continue to keep you posted regarding any future developments.
Please don’t hesitate to contact us with any questions. Email us at info [at] ngosource [dot] org or call +1 855-646-7723.