International Grantmaking Repository

Philanthropy In/Sight shows how raw data, when intelligently sorted and engagingly displayed, can enhance understanding, lead to insights and result in better philanthropy. With that sort of project in mind I’d like to point your attention to the Repository Project.

The Repository is a project of Council on Foundations, InterAction, Foundation Center and Independent Sector with the aim of making international grantmaking more streamlined. Private foundations and public charities are allowed to make international grants. However, for international “NGOs” (non governmental organizations) that do not hold 501c3 (nonprofit) status in the United States, grantmakers must document their grantmaking at a higher level than when making grants in the US. They must complete an “equivalency determination” that shows that the international NGO is “equivalent” to a US based 501c3. That is that the organization would qualify as a 501c3 if it were conducting operations in the US. Or the grantmaker must engage in “expenditure responsibility”. This simply means that the foundation is responsible for documenting that the grant it made was indeed spent by the NGO on qualifying activities.

While this process makes sense, it requires that many grantmakers repeat the same process over and over again. The Repository Project, being designed by TechSoup Global, is an attempt to fix this problem by working with the IRS to create an approved database where once a grantmaker completed an equivalency determination, other funders could depend on their finding and avoiding duplicating the process.

At first glance I thought that this all sounded sensible and practical, but mostly just a streamlining of administrative duties. Nothing to get too excited about. But recently it has been brought to my attention that there’s actually a lot more going on behind the scenes. While the direct goal of The Repository Project is as I outlined above, the inevitable side effect will be the creation of a dynamic database of international grantees that are eligible for US grantmaker funding.

Whenever you hear a call for more nonprofit reporting on their activities and impact, you hear the response that this reporting is costly and will be a burden to nonprofits. But in the case of international NGOs, they are already required to report on grants they receive from US based funders. The Repository Project will simultaneously decrease the reporting burden on NGOs, while making the reporting universally accessible.

Now lets be clear here. The Repository Project is under no requirement to make all NGO reporting and funder grantmaking information public. But it will be collecting this data and doing so in a way that brings cost savings to the participants rather than increasing reporting costs.

More importantly, I would point out that TechSoup Global was selected to host the repository. TechSoup is the group behind NetSquared and one of the most socially media savvy nonprofits around. TechSoup is committed to concepts like transparency and knowledge sharing. It wouldn’t surprise me if at some point we see a sort of Repository 2.0 that builds on the administrative efficiencies of Repository 1.0 to help make international grantmaking more effective.

One of the underlying assumptions I made in my post about the value of Philanthropy In/Sight was that it would be valuable for individual donors to “follow the smart money” of foundation funders as a way to identify high impact giving opportunities. I would suggest that the value of this practice in the international space is exponentially higher because of even further lack of transparency compared to the US. As more and more donors become interested in supporting causes in Africa, Asia and elsewhere, the ability to find out where large, well resourced foundations are sending their grants and being able to piggy back on a reporting system becomes invaluable.

The Googlization of Philanthropy marches on…