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| Philanthropy |
Foreign Policies
Matthew Schuerman
06/01/2004
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On the other hand, some foundation professionals say that
navigating these new measures is not much different than following the general
philanthropic mantra: “Know thy grantee.” Due diligence should include
inspecting the charity’s books to see that it spends its money directly on its
own salaries, programs and materials, as opposed to passing it to third parties
that may be fronts for terrorists. A helpful introduction to the legal and
practical aspects of giving overseas appears on the website for the United
States International Grantmaking Project (www.usig.org), established by the Council on
Foundations and the International Center for Not-for-Profit Law.
Because of
these complications, most family foundations prefer to give through intermediary
organizations such as Give2Asia. Intermediaries send their own field advisors
out to conduct due diligence. While they are happy to recommend causes to donors
who have just a vague idea of what they want to fund, a donor who has a specific
charity in mind can ask the intermediary organization to send a field advisor to
investigate. Intermediaries will handle the money transfers and provide status
reports. Donors usually have a choice between contributing to a fund to form a
large grant to one charity, or to be the sole sponsor of an overseas
organization. Whatever you choose, expect to give the customary minimum of at
least $5,000. Of that amount, between 5 percent and 10 percent will be deducted
as the intermediary’s fee.
Many donors find the fee is money well spent. Some
foundations that have tried giving directly to charities abroad end up returning
to intermediaries because they would otherwise have to spend more on due
diligence and compliance than they would spend on fees. One of these
organizations is the General Service Foundation in Aspen, Colo., which recently
returned to using go-betweens for grants to Mexico. While Executive Director
Lani Shaw says that using intermediaries forces the foundation to surrender a
measure of control, the practice makes financial sense. “They just do a better
job,” she told a Council on Foundations audience earlier this year. “They have
the cultural competency and the language skills that you need.”
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