Give Anywhere Safely

CAF America has solutions for working under the strictest charity laws in the world

Guided by CAF America’s 3Rs of International Grantmaking—regulatory compliance, risk mitigation, and reputation protection—our services ensure safe and effective international giving.

Taking a Risk-Based Approach
CAF America takes a risk-based approach to charity validation and grantmaking. This allows us to manage risks rather than avoiding them altogether, and leads to more flexible, innovative, and ultimately accessible grantmaking. Our team leans on our 30+ years of experience to evaluate each of our grantees individually and determine how we can approve their support.

Support for Grassroots Organizations
Our Board of Directors and Staff strongly feel that it is important and necessary to support local, grassroots organizations where possible, and in many of cases, these types of organizations are either not registered as charities in their countries or cannot fulfill all documentation requirements, such as having audited financial statements. Our review process will flag these differences as potential risk indicators and will work with both the donor and the grantee to mitigate those risks through a variety of tools, but we do not immediately dismiss them as viable grantees when these types of indicators are identified.

Enhanced Expenditure Responsibility
CAF America’s Enhanced Expenditure Responsibility service provides unparalleled assurance that your gifts are used for their intended purposes. We go above and beyond the IRS requirements of Expenditure Responsibility (ER), which is one of two tools the IRS provides for cross-border giving. ER enables US grantmakers to grant funds to charitable projects or organizations not recognized as 501(c)(3) public charities.

CAF America’s Global Charity Database

Once a charitable organization becomes eligible with CAF America, it is added to the CAF America Global Charity Database. The beneficiary in question can then receive grants from CAF America at the recommendation of any CAF America donor during its eligibility period. Eligibility with CAF America lasts for three years for UK, Australian, and Canadian charitable organizations and up to two years for charitable organizations from all other countries.

If an organization’s eligibility expires, it must renew its status in order to receive future grants. The CAF America renewal process is shorter and organizations are only required to submit an updated Grant Eligibility Application (GEA), a copy of updated financials, current board of trustees/directors, and any new or updated governing documents.

The IRS has designated two tools for US foundations to use when substantiating the charitable purpose of grants made to support non-US charities and charitable activities.

Expenditure Responsibility (ER)

Expenditure Responsibility involves CAF America funding a specific charitable project that our grantee is delivering, one that we can determine is in line with the IRS definition of ‘charitable purpose’.

ER can be used to fund:

• Specific charitable projects
• Charitable projects of for-profit entities

ER cannot be used to fund:

• Purchases of capital assets, construction, or general support
• Organizational Endowments
• Regranting (sending funds to a further beneficiary), in most cases

Equivalency Determination (ED)

Equivalency Determination involves CAF America making a good faith determination that the entire grantee organization is governed in a way that would otherwise be considered as equivalent to a US Public Charity under Sections 501(c)(3) and 509(a) of the Tax Code. Any grants made under an ED can be considered unrestricted, although CAF America may choose to enter into a grant agreement for accountability purposes. IRS Revenue Procedure 92-94 provides a specific procedure for making this determination, including a list detailing information that must be obtained from the foreign charitable organizations.

CAF America makes grants to charitable organizations pursuant to an in-house expenditure responsibility review process. Foreign charitable organizations that are currently not registered with CAF America must first complete our Grant Eligibility Application (GEA). Once CAF America receives a completed, signed GEA and all required supporting documentation, we initiate a three-tiered review process. The review process typically takes between 4–6 weeks.

Although our exact process is proprietary, some of the enhanced features of CAF America’s Enhanced Expenditure Responsibility method include:

1) Making a “pre-grant inquiry”: CAF America requires all foreign charitable organizations applying for eligibility to complete a Grant Eligibility Application (GEA). In addition to completing the GEA, applicants must submit select supporting documents for the review; the table at right lists the typical documents requested.

After the Grant Eligibility Application has been submitted and the beneficiary has been approved, CAF America proceeds with the final two steps of Expenditure Responsibility:

2) Executing a written grant agreement: Grantees must enter into a grant agreement with CAF America containing specific terms that limit and restrict how grant funds may be spent and monitored, and sets forth the specific circumstances under which grant funds must be returned. The terms of the CAF America grant agreement are based upon those required of private foundation expenditure responsibility grant agreements.

3) Grantee reporting: Grantees must submit an annual report on all grant expenditures. In addition, the grantee must report on compliance with the grant agreement terms, progress towards achieving the grant purpose, and any changes to the information submitted on their GEA. The annual report is due at the end of the grantee’s fiscal year.

Supporting Documents Required for CAF America’s Review Process

Document Needed	How CAF America Uses Them
	Organizational test: Are the purposes for which the organization was organized all considered charitable under section 501(c)(3)? Board election process, quorum and power structure Confirmation of non-profit status Review board remuneration policies Confirm dissolution clause
	Review Auditor Opinion for any identified issues Income: Is it diverse, sustainable, and supporting their operations? Expenditures: Do they seem reasonable based on their operations? Evaluation of surplus or deficit, and seeking needed explanations
	Each board member’s name and the organization’s name is run through Thompson Reuters World Check, a database of 400+ watch lists that includes all of the required US lists, such as OFAC and SDN. On a bi-weekly basis after the organization is eligible and throughout the duration of their eligibility, we run the organization name and all board member names through Lexis Nexis Bridger. This database includes all of the required lists under US law. A list of these databases can be given upon request.