Type of International Grantmaking Intermediaries

  • “Regranting” - Intermediary organizations that “regrant” support offer a simple and flexible way to put resources to work in other countries. Defined as charities under the U.S. Internal Revenue Service regulations, intermediaries based in the United States are able to receive tax-deductible donations from U.S. funders. Regranting intermediary organizations are also increasingly common overseas. For funders new to international grantmaking, regranting intermediaries offer a good way to get their feet wet in a new country or issue area.
  • Local, or “indigenous,” philanthropies - Donors based in the United States sometimes partner with philanthropies located elsewhere. A local funder may serve as an on-the-ground source of information, a funding partner, a passthrough intermediary, a grantee, or some combination of those. The African Women’s Development Fund, for example, solicits funding from foundations and other donors worldwide, coordinates their participation in a range of high-priority projects, and works closely with African NGOs to develop programs and build institutional capacity.
  • Venture philanthropy funds - Venture philanthropy funds attempt to apply the assumptions and language of venture capital investing to philanthropy — both in their own operations and in their expectations for grantees. Typically, for example, they offer funders several “portfolios,” each containing a mix of grants and investments addressing a particular social issue. The founder of the Acumen Fund, established in the spring of 2001, explained how “founding partners” invested in the development of a low-cost hearing aid, now being distributed in South Africa, India, and other countries: “Our goal — and we actually met it — in our first eight months was to start with 20 founding partners who would each contribute $100,000. We had $2 million in our first portfolio, which was in health technologies. People literally at the beginning would say, ‘I don't really care about hearing aids, but I like the model.’ There's enormous excitement about how this approach lets us think about how the health market is structured and how we actually might innovate to make it more effective and bring change to the fore.”
  • Donor-advised funds - Individual donors are increasingly turning to donor-advised funds, often coordinated through an established public charity, a commercial financial services company, or even a local community foundation, as mechanisms for work overseas. To open a fund, a donor makes an irrevocable contribution of cash or securities to the public charity, which is then legally responsible for managing the investment, usually for a nominal administrative fee. Most allow funders to recommend grants at any time, although they usually require donors to maintain a minimum balance in their funds. The Tides Foundation and Charities Aid Foundation-America are two of the organizations through which U.S. funders can establish donoradvised funds for international giving.
  • “Friends of” funds - These funds, established in the United States, channel support to specific overseas institutions, such as a school or university, foundation, arts organization, or museum. To locate a “friends of” fund affiliated with a particular institution or working in a country or region, consult GuideStar, a national database of more than 850,000 IRSrecognized charitable organizations in the United States.

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This takeaway was derived from International Grantmaking.

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