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  • A private foundation is a charitable organization that, while serving a good cause, might or might not qualify as a public charity by government standards. The Bill & Melinda Gates Foundation is the largest private foundation in the U.S. with over $38 billion in assets. Most private foundations are much smaller.

  • Generally, organizations that are classified as public charities are those that (i) are churches, hospitals, qualified medical research organizations affiliated with hospitals, schools, colleges, and universities, (ii) have an active program of fundraising and receive contributions from many sources, including the ...

  • Private foundations in the United States are often interested in funding promising organizations and projects that are based outside of the country. When doing so, these foundations are required to follow certain rules and procedures promulgated by the IRS to help ensure that the foreign grantees are properly using those funds for charitable purposes. Currently, when a private foundation engages in international grantmaking, it has two options for complying with these rules: exercising expenditure responsibility or conducting an equivalency determination.


  • NGOsource, a project of the Council on Foundations and TechSoup (both U.S. 501(c)(3) charities), helps U.S. grantmakers streamline and save in their international giving.  NGOsource simplifies the task of evaluating whether a non-U.S. organization is the equivalent of a U.S. public charity — a process known as equivalency determination or “ED” – by making a complicated process easier and more efficient for both the U.S. grantmaker and the non-U.S. grantee. NGOsource currently operates as a program of TechSoup Global.

  • Equivalency determination (ED) is a process dictated by U.S. tax law regulations. It permits a U.S. private foundation or donor-advised fund to make a good faith determination that a non-U.S. organization is the equivalent of a U.S. public charity or operating foundation. When using ED, the payment is a “qualifying distribution,” a grant for which expenditure responsibility (ER) is not required. To make this determination, a qualified reviewer collects and analyzes detailed information about a non-U.S. organization’s operations and finances (when required) and, based upon this information, makes a determination about whether the organization is equivalent to a U.S. public charity.  

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

  • The rules related to ED – the information we collect, and the tests we apply – are taken entirely from the U.S. Internal Revenue Code, Treasury Regulations, and related rulings and guidance issued by the U.S. Internal Revenue Service (IRS). NGOsource neither creates nor modifies these rules, although we have provided comments in limited circumstances.

    To read more about grants to foreign organizations by private foundations, visit the IRS website: 

    • Your organization will receive an invitation from the grantmaker and NGOsource with the information needed to understand and participate in the ED process.
    • Then your organization will complete the NGOsource questionnaire, providing any necessary documentation including governing documents in English.
    • NGOsource will then review the questionnaire and documents and will reach out for more information if necessary.
    • Once the review is complete NGOsource will notify the grantmaker and your organization of the equivalency determination. Your organization’s information is saved to expedite future ED requests from grantmakers that would like to give to you.

    For more information, see our page on How It Works.

  • NGOsource does not provide grants or assist with fundraising. We encourage grantseekers to visit Candid, which offers a wealth of resources for grantseekers, including information about international grants. TechSoup also has tools and resources to assist nonprofits in their fundraising efforts.

  • ED can only be conducted on an independent legal entity. If your organization has not yet been independently incorporated, then we cannot conduct ED on the organization. If requested by the grantmaker, NGOsource may instead be able to conduct ED on your project’s fiscal sponsor.

  • ED can only be conducted on an independent legal entity. If your organization is a department of a university but does not have its own legal existence and governance documents, as well as its own financial accounting, then NGOsource cannot conduct ED on the organization – we will need to conduct ED on the university as a whole.

ED Certification

  • Organizations certified in the ED repository have completed the ED process and have been deemed to be equivalent to U.S. public charities (or, in some instances, are determined to be government agencies or instrumentalities) at a moment in time. This process is entirely dictated by U.S. tax law governing charitable organizations. Once an organization is in the NGOsource repository, U.S. grantmakers can more quickly and efficiently make grants to the organization.

  • ED is expressly available (per U.S. tax law) for non-U.S. organizations that are equivalent to U.S. public charities. NGOsource will also issue legal opinions – similar to EDs – verifying that an organization is a “foreign government agency or instrumentality,” by applying a set of facts and circumstances promulgated by the U.S. Internal Revenue Service (IRS). For more information on this topic, see our blog on government entities.

  • The validity period is dictated by law and will be clearly shown on the ED Certificate. EDs are generally valid for two years from the last completed fiscal year for which information was made available for review. In practice, therefore, the validity period is usually approximately 1-1.5 years from the date it is completed. For example, if you submit actual financial income information through December 31, 2020, then the validity period of the certificate will be through December 31, 2022.

  • The ED Certificate may only be relied upon by the specific grantmaker who requested it, for a limited validity period. It is not a blanket stamp of approval that allows any entity to fund a non-U.S. organization. The ED certificate indicates the same, and it cannot, by law, be shared among other grantmakers. These are explicit requirements under U.S. tax law. For this reason, the Certificate is only made available to the U.S. grantmaker who requested it. NGOs are nonetheless welcome to inform other U.S. grantmakers of their NGOsource certification. Being in the NGOsource repository means that an organization’s current ED Certificate will be available for reissuance to our member grantmakers for a small processing fee, often with little or no additional effort on the part of the non-U.S. organization.

  • No. The ED is solely valid for the entity that requested it, and its only legal significance is that it permits the named private foundation or donor-advised fund that requested it to make grants to it with fewer restrictions and reporting requirements (than otherwise would be required). Having an ED grants no tax benefits to any individual donors.

  • No. Although an ED is a legal opinion that your organization meets the requirements of U.S. charities under U.S. tax law, an ED is NOT the same thing as a letter from the Internal Revenue Service (IRS) that your organization is a 501(c)(3) public charity. An ED’s only legal significance is that it permits the named private foundation or donor-advised fund that requested it to make grants to it with fewer restrictions and reporting requirements (than otherwise would be required). The ED grants no other special benefits to the non-U.S. organization or to individual donors to it.

  • Please visit one of the following websites to learn more about U.S. funders and funder outreach:

    Additionally, in the certification email from NGOsource, there is sample language that your organization may use when reaching out to other funders, indicating that they have an ED on file with NGOsource. 

  • If you would like to request your own ED we may be able to assist you, but we typically discourage NGOs from doing so for the following reasons: 

    • An ED cannot be shared between grantmakers (though the information can be shared).  Thus an ED is not a “stamp of approval” or open channel to receive U.S.-based grantmaker support. An ED must be from one grantmaker to one NGO. 
    • Per above, every ED must be requested by a grantmaker (even if an NGO requests an ED for itself).  So, if your organization requests and pays for your own ED review and determination, any grantmakers interested in funding your organization would first need to become NGOsource members (if they aren’t already), and then pay an additional fee to request the ED for the organization.  Please be aware EDs are typically valid for two years from the last completed fiscal year for which information was made available for review. In practice, therefore, the validity period is usually approximately 1-1.5 years from the date it is completed. After the validity period has passed, the cost of ordering a renewal ED is higher, depending on the grantmaker’s membership level.

    As you can see, due to the way EDs function and the U.S. tax rules governing them, NGOsource is designed to be grantmaker driven. It is important that NGOs recognize the realities and limitations before investing in this expense.



ED Questionnaire & Governing Documents

  • This language describes activities or programs that are educational in nature. For example, if the organization publishes informational articles, blogs, reports, white papers, or research on its website or elsewhere, or if it offers courses, trainings, lectures, workshops, or similar programs on either a group or individual basis, for a fee or without charge, please respond “yes.”

  • This means at least ten percent of an organization’s income is from a combination of gifts, grants, and contributions from individuals, foundations, companies, other charities, or the government.

  • This is the date on which the organization was legally incorporated or registered in the organization’s country. Typically, the date is on the original Certificate of Incorporation, Articles of Incorporation, or Trust Deed, for example.

  • The term “charitable” has a broad meaning under U.S. tax law that does not always align with its definition in other contexts or countries. The U.S. Treasury Regulations explain that:

    The term "charitable" is used in section 501(c)(3) in its generally accepted legal sense and is, therefore, not to be construed as limited by the separate enumeration in section 501(c)(3) of other tax-exempt purposes which may fall within the broad outlines of ‘charity’ as developed by judicial decisions. Such term includes: Relief of the poor and distressed or of the underprivileged; advancement of religion; advancement of education or science; erection or maintenance of public buildings, monuments, or works; lessening of the burdens of government; and promotion of social welfare by organization designed to accomplish any of the above purposes, or (i) to lessen neighborhood tensions; (ii) to eliminate prejudice and discrimination; (iii) to defend human and civil rights secured by law; or (iv) to combat community deterioration and juvenile delinquency.

    A charity may also earn income on its charitable activities, such as a school that charges tuition, a museum that charges entrance fees, or a charitable thrift shop that collects donated items and resells them below cost. For more information on income-earning activities of charities, see our blog on Charitable Income-Generating Activities.

    It is often presumed that being “charitable” is the same as being “nonprofit.” This is not true. A nonprofit organization might include any number of organizations that do not seek to earn a profit, but that are not considered charitable. For example, trade associations, labor unions, homeowners’ associations, political organizations, or social clubs are all typically nonprofit, but not charitable under U.S. law. For more information, see our blog on Nonprofit vs. Charity.
  • “Influencing legislation” is a technical term under U.S. tax law that refers to a charity’s communication (written or verbal) with legislators (and government officials with authority to make, approve, or veto legislation) that refers to and reflects a view on specific (identifiable) legislation (“direct lobbying”). Influencing legislation also includes communications with the general public that refer to and reflect a view on specific legislation and that expressly encourage the public to take action by contacting their legislators (“grassroots lobbying”).

    Specific legislation includes, in any country, action by a federal or state legislature, any local council, or similar legislative body, or by the public in a referendum, ballot initiative, constitutional amendment, or similar procedure. “Specific legislation” includes both legislation that has already been introduced in a legislative body and a specific legislative proposal that an organization either supports or opposes.

    Not all advocacy qualifies as influencing legislation. There are many exceptions to direct and grassroots lobbying, including for example:

    • Attempting to influence decisions of regulatory and administrative bodies such as school boards, housing authorities, sewer, and water districts, zoning boards, and other similar Federal, State, or local special-purpose bodies, whether elective or appointive.
    • Attempts to change laws through litigation or other judicial means.
    • Engaging in nonpartisan analysis, study, or research and making available to the general public or a segment or members thereof or to governmental bodies, officials, or employees an independent and objective exposition of a particular subject matter. Such communication may advocate a particular position or viewpoint so long as there is a sufficiently full and fair exposition of the pertinent facts to enable the public or an individual to form an independent opinion or conclusion. The mere presentation of unsupported opinion, however, does not qualify as “nonpartisan analysis, study, or research.”
    • Examinations and discussions of broad social, economic, and similar problems, even if the problems are of the type with which government would be expected to deal ultimately. This might include public discussion, or communications with members of legislative bodies or governmental employees, the general subject of which is also the subject of legislation before a legislative body, so long as such discussion does not address itself to the merits of a specific legislative proposal and so long as such discussion does not directly encourage recipients to take action with respect to legislation.
    • Providing technical advice or assistance to a governmental body, a governmental committee, or a subdivision of either in response to a written request by the body, committee, or subdivision.
    • Appearing before, or communicating with, any legislative body with respect to possible action by the body that might affect the existence of the electing public charity, its powers and duties, its tax-exempt status, or the deductibility of contributions to the organization.

    For more information, see our blog on Lobbying by U.S. Public Charities and Their Foreign Equivalents.

  • In order to be recognized as a public charity in the U.S., an organization’s governing documents must contain a clause that requires it (or it must be legally obligated by law) to guarantee that if it is ever dissolved its remaining assets will be distributed for charitable purposes or to a government for public purposes (“dedication of assets” requirement). The idea is that, in order for a charity to be truly charitable, its assets must be permanently dedicated to charitable purposes. If an organization’s assets are required to be distributed to another charity or government, then such language in a dissolution clause is usually sufficient. Alternatively, if an organization’s governing documents or local law expressly requires that it apply its income and property exclusively and solely toward its own charitable purposes, then this might also meet the “dedication of assets” requirement.

    For more information, see our blog on Dissolution.

  • Governing documents are those documents that were used to establish, incorporate, or register your organization (Certificate of Incorporation, Articles of Incorporation, Trust Deed, Certificate of Registration, Recognition Letter, etc.), as well as those documents approved by your organization’s governing body that explain the mission, governance, rules, and restrictions that apply to the organization (Trust Deed, Constitution, Memorandum and Articles of Association, Bylaws, Statutes, Charter, etc.). Your organization’s audited financial statements are NOT governing documents. You do not need to submit those as part of the ED process.

  • U.S. law requires that we review complete governing documents in English. Translations need not be certified or “official.” You may use any translation tool available to you, including Google Translate or DeepL. Translations do not need to be official or certified. NGOsource cannot accept excerpts from governing documents. Your organization must submit the entire governing documents translated into English.

  • Because the governing documents are shared as part of the ED file with any grantmaker who requests an ED, we must ensure that no personal data of third parties is inadvertently disclosed without their consent. For this reason, we request that you completely redact any names, signatures, identification numbers, photos, addresses, or any other information that identifies an individual in any way. For more information on what must be redacted and how you can do so, see our article on the topic, here.

Financial Information

  • NGOsource prefers that organizations submit financial information in the currency in which it currently operates. The organization may submit information in any currency; however, it is simpler for all involved if the organization uses a currency that matches its own financial statements and does not require conversion to USD.

  • NGOsource does not require audited financials. However, we do require that the financial information be accurate, current, and complete. We do not accept estimates (for any completed financial years), or figures that have been rounded up or down.

  • If the organization’s fiscal year is on a non-calendar basis, then the reporting year should correspond with the year in which the organization’s fiscal year ends. Therefore, if the fiscal year runs from April 1 to March 31, then the organization’s “2021 fiscal year” is from April 1, 2020, to March 31, 2021.

  • For organizations fewer than five years old, NGOsource requires actual financial information for any completed fiscal years, as well as estimated financial income for any future fiscal years, totaling five fiscal years. The anticipated financial income should include good-faith estimates of what the organization hopes and realistically expects to receive. It should include revenue from grants and activities that the organization plans to solicit, for example, not just those funds already committed or guaranteed.

  • Income earned from activities that are related to an organization's charitable purposes is often referred to as "gross receipts from related activities," or “mission-related income.” The income-earning activity itself must further one of the organization’s charitable purposes. Typical examples of gross receipts from mission-related activities include ticket earnings at museums, zoos, symphonies, operas, theaters, ballets, and similar institutions, as well as tuition fees from educational programs, or sales of educational publications. See also our blog on Characterizing Income of 501(c)(3) Public Charities and on Charitable Income-Generating Activities.

  • A private foundation is a charitable organization that receives its funds from a single or small number of donors (such as a family or business) and that typically is primarily engaged in grantmaking rather than direct programs. For more information see our blog on The Difference Between Public Charities and Private Foundations.

  • A U.S. public charity is a charity that has been recognized by the U.S. Internal Revenue Service (IRS) to be organized and operated exclusively for charitable purposes, and that also meets either a public support test (most charities) or that qualifies by virtue of its activities (such as churches, hospitals, or schools). For more information see our blogs on The Difference Between Public Charities and Private Foundations and Public Charity Classifications.

  • A foreign publicly supported charity is either a non-U.S. charity that has received a determination letter from the U.S. Internal Revenue Service (IRS) that it is a 501(c)(3) public charity or that has been deemed equivalent to a 501(c)(3) public charity.