Understanding Equivalency Determination: The Public Support Test

The legal team at NGOsource works hard to certify as many non-U.S. NGOs as possible in order to streamline and increase international giving. Our equivalency determination (ED) process has certified over 700 NGOs in 96 countries to date as equivalent to 501(c)(3) organizations in the United States, allowing them to receive funding from U.S. grantmakers. One of the primary requirements for most international NGOs seeking equivalency is that they satisfy one of two public support tests. In order to “pass” either of the tests, NGOs must generally prove that at least one-third of their support comes from the public.

The first test requires that NGOs receive at least one-third of their support from contributions from the public.  Support most commonly includes gifts, grants, and contributions from governmental agencies, the general public, other public charities, or any combination thereof. If an NGO’s public support percent does not reach 33.3% but exceeds 10% of total support it receives, there is a “facts and circumstances” test in which the specific facts and circumstances of an NGO are analyzed to evidence that it is sufficiently supported by the public.

The second test requires that NGOs receive at least one-third of their support from contributions, membership fees, and/or from gross receipts from activities related to their charitable mission (such as admissions, sales of merchandise, performance of services). For this test, the 10% facts and circumstances test is not available and no more than 33.3% of an NGO’s support can come from gross investment income and net unrelated business income.  

NGOsource regularly analyzes public support for NGOs under both of these tests. To learn more about how these components of support are evaluated or if you have any other questions, please contact us.

Image via Gawad Kalinga, an NGO that was certified by NGOsource. Read about the impact that the ED certification has had for Gawad Kalinga.