Equivalency Determination (ED)

Equivalency Determination is a legal procedure whereby a non-U.S. organization is determined to be the equivalent of a U.S. 501(c)(3) public charity. When done properly, this procedure allows private foundations like OSI and FPOS to treat these organizations as if they were public charities and to make grants to them without exercising Expenditure Responsibility. Longstanding OSF grantees receiving at least $100,000 in grant funds per year that have been in existence for at least five years and that receive a substantial amount of financial support from the general public make ideal candidates for ED. (Organizations must have broad public support to qualify as Equivalents, and five years of financial data is required to make the determination, if the organization is not an educational or religious institution.) Candidates are identified by OSF Program and/or Grants Management staff.

An ED pre-screening form should be submitted to Grants Officers for review

That form will be forwarded to the ED team, if the Grants Officer determines that the organization makes a good candidate for ED.

NGOSource

The Equivalency Determination process is outsourced to an external service provider called NGOSource (source: http://www.ngosource.org/Home). OSF pays NGOSource an annual membership fee as well as a fee for each organization for which an ED is requested. The ED fee still must be paid if the organization is ultimately determined not to be the equivalent of a U.S. public charity, although if another foundation has already performed an ED on the organization, the ED can be transferred to OSF for smaller fee than that required for do an ED from the beginning.

ED Renewal

Equivalency Determinations are only valid for 1 to 2 calendar years, and need to be renewed when expired.

If the organization does not qualify as an equivalent to a U.S. public charity during the renewal process, the grantee will be subject to Expenditure Responsibility (ER) for any new grants or payments from private foundation funds.

More information about EDs can be found at the Equivalency Determinations community on KARL.

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