What is equivalency determination (ED)?

Equivalency determination (ED) is a process dictated by U.S. tax law regulations that 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. An equivalency determination permits the private foundation or donor-advised fund to make a grant to such non-U.S. organization such that the payment is a “qualifying distribution,” and 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, may make a determination that the organization is equivalent to a U.S. public charity.  

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