Beta Learning Phase

The Beta Learning Phase, which concluded in April 2010, provided a rich learning opportunity for the NGOsource team. During Beta, grantmakers and NGOs submitted test equivalency determinations (EDs) through NGOsource systems. Overall, NGOsource processed 31 ED requests for NGOs in 17 countries.

The findings of the Beta Learning Phase have allowed the NGOsource team to increase the usability of the tool, minimize the time it takes to process equivalency determination (ED) reviews, and make enhancements that will further improve the service.

The full Beta report is available here. Highlights include the following:

• The online questionnaire model was used successfully with all NGOs that participated in the Beta Phase.
• The Grantmaker Portal is an effective tool for grantmakers and should remain as simple and easy-to-use as possible.
• Common questions raised by NGOs should be addressed with clearer instructions, detailed FAQs, and expanded Help text.
• Offline application capability is needed.
• NGOsource should further refine the questions asked of NGOs to help them with the challenging task of correctly identifying their organization type.
• The ED process can be better kept on schedule by automating communications and enhancing training for PNGOs.
• The first communication to an NGO regarding NGOsource should come from the grantmaker, as bottlenecks occur when an NGO is not expecting an email from NGOsource.

Over the remainder of 2010, the NGOsource team will focus on implementing these and other enhancements to the service.

June 30, 2010

2010 Update

In winter 2010, the NGOsource team met with Treasury department representatives to identify questions they had concerning the Council’s December 2009 Revenue Procedure request. The team's formal written response to the questions is available here.

In spring 2010, the NGOsource team learned that the Treasury representative who had been handling the Council’s Revenue Procedure request was leaving the Department. Her replacement, who is a seasoned exempt organizations attorney, will begin service in the late summer, and the team expects the Revenue Procedure request to transfer to her desk. The team will ensure that she receives all relevant documentation.

The team has also learned that the Commissioner of the IRS, Doug Shulman, is relying on Nikole Flax, an Assistant Deputy Commissioner for Services and Enforcement, for information on the EDIR issue.

Two-pronged Strategy. In response to these recent personnel changes, the NGOsource team, under the advice of Caplin & Drysdale, has decided to adopt a two-pronged strategy, approaching Treasury and the IRS simultaneously. The recent changes may result in a delay in approval of the PLR and Revenue Procedure as the new personnel educate themselves about EDIRs. NGOsource’s approach is designed to effect as seamless a transition as possible.

IRS Meeting. First, the team has requested a meeting with Ms. Flax and other representatives at the IRS. She has accepted the request, and the team is scheduling the meeting, which it hopes to hold in the late summer or early fall. The meeting will include key members of the NGOsource team, legal counsel, and representatives from two grantmakers with international grantmaking experience.

Treasury Guidance Plan. Second, on June 10, 2010, the Council sent a letter to the Treasury Department requesting inclusion of the Revenue Procedure and EDIR issue on Treasury’s guidance plan, which is adopted annually and amended every three to four months. Inclusion on the guidance plan does not guarantee that a particular guidance item will be adopted and published, nor does it guarantee that a particular item will remain on the plan as it is amended. However, inclusion on the plan does significantly increase the likelihood that an item will be formally addressed by Treasury. The NGOsource team has not yet heard whether Treasury will include the requested items on the plan.

June 28, 2010

COF Proposed Revisions to Revenue Procedure 92-94

The Council on Foundations, with the assistance of Caplin & Drysdale and TechSoup Global, submitted to the U.S. Treasury Department on December 28, 2009, a request for a new Revenue Procedure that (1) authorizes the creation of equivalency determination repositories on which third parties can rely and (2) clarifies certain standards to be applied in the equivalency determination context.

The Revenue Procedure approval process is expected to run in parallel with the IRS private letter ruling previously submitted to support NGOsource. Approval of the Revenue Procedure is expected to facilitate approval of the IRS ruling. Treasury has acknowledged receipt of the Revenue Procedure and accompanying documentation and a meeting with Treasury in February 2010 has been scheduled to discuss the Revenue Procedure. For more information, please visit this link.
December 28, 2009

Equivalency Determination Information Repository Receives IRS Advisory Committee Acknowledgement

Advisory Committee on Tax Exempt and Government Entities, Exempt Organization offers several recommendations to improve the tax rules governing international grantmaking.  Regarding the development of an Equivalency Determination Repository, the report includes:

“We encourage the IRS to facilitate formation of Equivalency Determination Information Repositories EDIRs which would make equivalency determinations in accordance with the requirements of Rev. Proc. 92-94 (as updated from time to time) and procedures approved by the IRS that could be relied on by other charities.

In furtherance of this recommendation, we encourage the IRS to give high priority attention to the proposal of the Council on Foundations and TechSoup Global and any other organization seeking to establish an EDIR. We have not reviewed this proposal and express no views regarding its merits. However, we believe that it presents an opportunity for the IRS to develop standards for EDIRs. Ultimately the IRS should publish guidance regarding standards and procedures for EDIRs to obtain IRS approval.”

Read full report.
June 30, 2009

TechSoup Global submits Private Letter Ruling (PLR) to IRS

June 2009