Charity Validation & Due Diligence

Before any grant is made, whether domestically or internationally, it is essential to conduct proper due diligence to ensure regulatory compliance, to mitigate risk, and to protect the donors’ reputation. The IRS has approved two methods for making tax-effective cross-border donations: Expenditure Responsibility and Equivalency Determination.


EXPENDITURE RESPONSIBILITY

Expenditure Responsibility (ER) is a process through which a grantor establishes the charitable purpose of a specific project.

Enhanced Expenditure Responsibility (EER) is our unique protocol, and our default validation protocol for vetting previously-ineligible organizations. Our proprietary Enhanced Expenditure Responsibility (EER) process provides us with the unparalleled ability to guarantee that the organizations we support are operating in compliance with all relevant US, international, and local laws


EQUIVALENCY DETERMINATION

Equivalency Determination (ED) is the method used to collect information on a foreign charitable organization in order to make a good faith determination as to whether or not it is the equivalent of a US 501(c)(3) public charity.  If equivalency is determined, the foreign charity becomes eligible to receive tax-effective donations from US donors.

We offer two ED services:

Internal Review – We manage both the ED and the grantmaking process.

ED Certificate – Should a donor wish to make the grant themselves, we can issue an equivalency determination certificate in the donor’s name.


VALIDATION SERVICES FOR US NONPROFITS

US Standard Validation
All domestic charities are automatically eligible to receive tax-effective charitable donations from US donors. Nevertheless, we take the extra steps of conducting a reputation review on the organization (including using official watchlists and news searches), verifying the organization’s charitable status, and collecting banking details.

US Enhanced Validation
Some donors seek to have additional layers of due diligence conducted on US charities. Our Enhanced Validation goes deeper, looking at board members and senior staff, and collecting a grant purpose for the use of potential funds.


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NGO America is a project of CAF America, a global grantmaking organization founded in 1991 and part of the CAF Global Alliance. CAF America was the first to answer Secretary of State Hillary Clinton’s call in 2012 to help U.S. donors take advantage of reduced barriers to international philanthropy. An expert in theoretical, legal, and practical challenges of cross-border giving, CAF America established NGO America to share its expertise and to provide simple solutions to this complex process.