Equivalency Determination PLUS
Available in both standard and higher-risk service levels.
Equivalency determination (ED) confirms that a non-U.S. organization is the legal equivalent of a U.S. public charity under Internal Revenue Code §§501(c)(3) and 509(a). With a valid ED, U.S. private foundations and donor-advised funds can treat grants as qualifying distributions, eliminating the need for Expenditure Responsibility. This allows them to fund global partners with confidence and speed.
- Regulatory assurance: EDs prepared to IRS Rev. Proc. 2017-53 standards provide an accepted alternative to Expenditure Responsibility.
- Flexibility: Enables general support and capital grants without ER oversight and reporting.
- DAF-friendly: DAF sponsors commonly rely on EDs to extend the same compliance protections to donor-advised grants.
- Faster access to partners: Using grantees with current EDs (including from reputable repositories) streamlines approvals.
The ED PLUS Service
ED PLUS comprises two service components:
- The Equivalency Determination (ED) itself is issued by a Supported ED Provider (SEDP). Paragon facilitates the process as the SEDP’s authorized agent for document collection, client and grantee communications, delivery of the ED, and collection of SEDP fees. Paragon provides administrative coordination of the process, including end-to-end grantee communications and document collection.
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PLUS services deliver a targeted set of safeguards, including anti-terrorist financing screening, facilitation of grant agreement signatures when required, verification of wire instructions, and a review of basic foreign country requirements. By combining these steps into one service, PLUS supports consistent oversight, reduces the risk of fraud or diversion, and helps maintain audit-ready documentation.
For ED PLUS Higher-Risk, additional anti-terrorist financing steps are applied through Paragon’s enhanced ATFS-HR service.
Four-Tier Framework >
Paragon’s four-tier framework helps funders align vetting depth with risk.
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PLUS Service Components
ANTI-TERRORIST FINANCING SCREENING (ATFS)
Standard ED PLUS includes ATFS, Paragon’s baseline anti-terrorist financing screening service. Paragon manages all communications with the foreign grantee; collects and verifies core organizational documents; confirms current legal registration status; and obtains either a certified list of key staff, board members, founders, controlling entities, and financial institutions, or formal confirmation that no changes have occurred. Paragon verifies updates to banking relationships, screens all relevant names and entities against U.S. and international sanctions and watchlists (including OFAC, UN, EU, UK, FBI, and Interpol), conducts follow-up analysis on potential matches, secures additional information from the grantee as needed, and generates a written screening report with full supporting documentation for the grant file. Higher-Risk ED PLUS also includes Paragon’s enhanced anti-terrorist financing screening service (ATFS-HR).
Why
Anti-terrorist financing screening is essential in cross-border grantmaking to ensure charitable funds are not diverted to organizations or individuals associated with terrorism, money laundering, or other sanctioned activities. Risks may arise at any time due to changes in leadership, board composition, controlling entities, banking relationships, or registration status. Global watchlists (OFAC, UN, EU, UK, FBI, Interpol, and others) are continually updated. By verifying updates, confirming no changes, and re-screening the grantee before each disbursement, ATFS protects funders against inadvertent transfers to sanctioned entities and provides clear, documented assurance for due diligence and institutional accountability.
GRANT AGREEMENT SIGNATURES AND COMMUNICATIONS
Coordinating execution of the grant agreement by the grantee and client representatives through a secure e-signature platform, while facilitating communications between the parties to address any questions that may arise regarding the agreement. This process helps ensure that signatures are secure, time-stamped, and verifiable, creating a clear record for compliance and audit purposes. This service expressly excludes any legal review or analysis of the grant agreement.
WHY
A signed agreement allows the grantor to reaffirm protective language around the charitable use of funds, compliance with anti-terrorist financing and sanctions laws, and adherence to reporting obligations. An agreement ensures that funds are disbursed only under enforceable terms, protecting the grantor against misuse, diversion, or reputational risk while aligning with compliance expectations.
WIRE INFORMATION AND CONFIRMATION OF RECEIPT
This service includes the following steps:
- Securing wire information via secure e-signature platform
- Verbal verification of wire details
- Confirming receipt of funds by the grantee
Paragon compiles these steps into a report, creating a clear record that the payment was authorized, transmitted, and received as intended.
WHY
Reconfirming and verifying wire details prior to each payment helps prevent costly errors and fraud, such as misdirected or spoofed wires, and ensures funds are documented as received as intended. By securing wire instructions in writing, verbally confirming no changes, and obtaining confirmation of receipt from the grantee, the client reduces diversion risk and maintains clear, defensible records for compliance reviews.
BASIC FOREIGN COUNTRY REQUIREMENTS REVIEW
This is a three-step review: (i) check the ICNL Civic Freedom Monitor for the relevant country; (ii) review the Council on Foundations (COF) Country Note; and (iii) request that the grantee identify which requirements apply when receiving foreign funding. Because these rules can change between payments, the review reconfirms applicable obligations each time. Information is included only if published by ICNL or COF. For countries not covered by these sources, clients may request Paragon’s Enhanced Foreign Country Requirements Review (EFCR). This review is informational only and does not constitute legal advice.
WHY
Many jurisdictions impose registration, reporting, or approval requirements on nonprofits receiving foreign funding—and in some cases on U.S. grantmakers as well. Because these rules can change quickly, reviewing them before each disbursement provides an important safeguard. Noncompliance may delay transfers, expose the grantee to penalties, or risk suspension of operations. By consulting authoritative sources (ICNL, COF) and confirming requirements with the grantee, this review provides current reference points on restrictions that may affect a grant’s legality or safety, helping protect both funder and grantee.
Documentation Provided
- ED Written Advice and supporting records (provided by the SEDP)
- Anti-Terrorist Financing Screening (ATFS) report with screening logs and exhibits.
- If requested, secure e-signature facilitation of grant agreement signatures
- Verified wire instructions, and confirmation of receipt.
- Foreign Country Requirements Summary with supporting evidence.
All deliverables are compiled into a package structured to support board oversight and regulatory review. Paragon Philanthropy is not a law firm and does not provide legal advice; our services are administrative, risk-screening, and facilitative only, and EDs are issued by independent SEDPs.
Related ED Services
ED Re-Certification
This involves renewal of an expiring or expired ED through the original issuing SEDP, with Paragon coordinating updates and providing the same “PLUS” safeguards described above.
Repository ED with Updated Watchlist Screening
A repository equivalency determination (“repository ED”) is an active, unexpired ED held in the issuing SEDP’s repository that can be newly issued to a different requesting grantmaker by that same SEDP. As part of this service, Paragon coordinates the reassignment, performs an updated Anti-Terrorist Financing Screening (ATFS), and directly contacts the grantee to confirm that no changes to legal status, governance documents, or other key facts have occurred; where needed, Paragon obtains updated information and supporting documents.
Higher-Risk Screening Option
For grants involving larger award amounts, higher-risk geographies, government-linked entities, or other elevated risk indicators, Paragon offers an enhanced due diligence tier: Equivalency Determination PLUS Higher Risk (ED PLUS HR). This service integrates Paragon’s Higher-Risk Anti-Terrorist Financing Screening (ATFS-HR)—a Tier 2 procedure within the Four-Tier Framework—into the standard ED PLUS process. ATFS-HR adds national and local sanctions screening via Dow Jones RiskCenter, terrorism-focused adverse media searches, verification of banking good standing, and assessment of ownership, control, and government or political affiliations, alongside review of the grantee’s anti-terrorism and downstream-partner oversight policies.
Timeline and Delivery
Paragon prioritizes efficiency while maintaining excellence, accuracy, and documentation integrity in facilitating the delivery of Equivalency Determination (ED) projects. Upon receipt of all requested documentation and information from the grantee, ED projects are generally completed within two weeks, depending on attorney follow-up and grantee responsiveness. Timelines may vary if translation, additional verification, or further coordination is required. Paragon provides clients with status updates at each stage, from document collection through delivery of the final ED package, to ensure transparency and predictable completion.
Proven Track Record
Founded in 2012, Paragon has facilitated the vetting of thousands of grantees across more than 100 countries, including higher-risk jurisdictions identified by FATF, the OECD, and Transparency International. Our analyst-led process delivers practical cross-border due diligence and risk screening that evaluates mission alignment, governance, financial controls, sanctions and watchlist exposure, and country risk to help protect funder reputation. We provide structured, defensible documentation to support board oversight and strengthen cross-border giving.