Resources for Internationally Engaged Grantmakers
International Grantmaking: An Overview
Paragon's article in PEAK Insight Journal provides a general introduction to international grantmaking, covering compliance considerations such as Expenditure Responsibility, Equivalency Determination, OFAC compliance and watchlist screening, and meeting foreign country requirements.
Counterterrorism Regulations, OFAC Compliance, and Watchlist Screening
International grantmaking entails an increased risk of diversion of charitable funds by terrorist organizations and their support networks. When making cross-border grants it is important to adopt specific practices that lessen these risks.
Many internationally engaged U.S. foundations, donor-advised funds, and corporations are not fully aware of anti-terrorist financing regulations, nor of the correct steps
to follow, and the potential consequences of not following mandated steps.
Coping With the Disabling Environment for Global Philanthropy
Over the past several years, internationally engaged foundations have faced unprecedented challenges from governments around the world. This is just one element of the ‘closing space’ or the ‘disabling environment’ for international philanthropy. To support Alliance Magazine’s ongoing coverage of this issue, we asked a range of internationally engaged foundations and public charities how their work is being affected and how they are addressing the challenges.
Our article, published in the June edition of Alliance, discusses the rise of philanthropic protectionism, how foundations are supporting grantees in coping with and challenging closing space through both resilience and resistance, the collective action being led by organizations such as Ariadne, the European Foundation Centre (EFC), and the International Human Rights Funders Group (IHRFG), and opportunities for our sector to combat this tendency including, among others, the Sustainable Development Goals (SDGs).
The full June 2016 edition of Alliance Magazine (special feature: Climate Philanthropy after Paris) is available via the website of Alliance Magazine.
Community Foundations and International Grantmaking
Community foundations are expanding the definition of "community" and becoming more actively involved in international grantmaking.
This publication by the Council on Foundations, in collaboration with the Foundation Center, discusses trends in international giving with a focus on larger community foundations. Case studies discuss how five community foundations currently manage their international grantmaking.
What is Expenditure Responsibility?
Expenditure responsibility means that a private foundation exerts all reasonable efforts and establishes adequate procedures to (i) see that the grant is spent only for the purpose for which it is made; (ii) obtain full and complete reports from the grantee organization on how the funds are spent, and (iii) make full and detailed reports on the expenditures to the IRS.
What is Equivalency Determination?
Under the Equivalency Determination (ED) process outlined in IRS Revenue Procedure 92-94, a U.S. grantmaker collects comprehensive information about a foreign grantee’s operations and finances in order to make a reasonable determination as to whether the organization is the equivalent of a U.S. public charity.
Choosing between Expenditure Responsibility and Equivalency Determination
Some circumstances favor Expenditure Responsibility, while others favor Equivalency Determination. Betsy Buchalter Adler and Stephanie L. Petit describe the factors that may lead a grantmaker to choose one approach over the other.