International Organization PLUS

Documentation of an organization’s designation under 22 U.S.C. § 288, with grant payment safeguards.

For U.S. grantmakers

Some of the largest recipients of cross-border charitable funding are international organizations rather than charities. Several dozen such bodies, the United Nations and the World Health Organization among them, were created by agreements among governments rather than by incorporation under the law of any one country.

The International Organizations Immunities Act, 22 U.S.C. § 288, allows the President to designate by Executive Order a public international organization in which the United States participates, and to limit or condition the privileges, exemptions and immunities it receives. For purposes of Treas. Reg. § 53.4945-5, paragraph (a)(4)(iii) treats a foreign government, an agency or instrumentality of a foreign government, or an international organization designated under 22 U.S.C. § 288 as an organization described in section 509(a)(1), even if it is not described in section 501(c)(3). Any grant covered by that paragraph must be made exclusively for purposes described in section 170(c)(2)(B).

That treatment appears in the private foundation regulations. How it applies to a particular grantmaker, including a donor-advised fund (DAF) sponsoring organization, and to a particular grant is a question for the grantmaker and its counsel.

Compliance support

The IO PLUS Service

IO PLUS comprises two service components:

Documentation of the designation

Documentation for International Organization (IOD). Paragon assembles the file a grantmaker’s counsel can review in deciding whether the grantmaker may rely on an organization’s designation for a proposed grant. Paragon handles all communications with the organization, documents the designation by reference to 22 U.S.C. § 288 and the Executive Orders issued under it, and obtains the organization’s founding convention or agreement and, where the grant is directed to a branch or sub-unit, the document that places that unit within the designated organization. Whether a designation extends to a branch or sub-unit is a legal question for the grantmaker’s counsel.

Additional safeguards

PLUS services deliver a targeted set of safeguards for the payment itself: anti-terrorist financing screening, facilitation of grant agreement signatures when required, and verbal verification of wire details with confirmation of receipt. Together these steps protect charitable assets, reduce the risk of fraud or diversion, and keep the grant file complete and well organized.

What’s included

PLUS Service Components

Anti-Terrorist Financing Screening (ATFS) is part of every IO PLUS engagement. The other components are included in the service and applied as each grantmaker’s needs require.

IO PLUS does not include a Foreign Country Requirements Review. That review covers registration, reporting and approval requirements that a country imposes on civil society organizations receiving funds from abroad. A designated international organization operates under its founding instrument and its agreements with host states rather than under those laws.

Anti-Terrorist Financing Screening (ATFS)

IO PLUS includes ATFS, Paragon’s baseline anti-terrorist financing screening service and Tier 1 of the Four-Tier Framework, scoped to a designated international organization. Paragon screens the organization and, where the grant is directed to one, the receiving branch or sub-unit; the persons with operational authority over the receiving unit; and the financial institutions through which funds will be received. Names are screened against U.S. and international sanctions and watchlists (including OFAC, UN, EU, UK, FBI, and Interpol), potential matches are followed up, and the results are delivered in a written screening report with supporting documentation for the grant file. The screening included in IO PLUS covers the first grant payment; screening for later payments is engaged separately.

Why

A designation under 22 U.S.C. § 288 says nothing about the sanctions status of the individuals who direct the receiving unit or the banks through which funds pass. Anti-terrorist financing screening reduces the risk that charitable funds are diverted to organizations or individuals associated with terrorism, money laundering, or other sanctioned activities. Risks may arise at any time due to changes in the leadership of the receiving unit or in its banking relationships, and global watchlists are continually updated. By confirming updated information, or that no changes have occurred, and screening before the payment, ATFS reduces the risk of inadvertently transferring funds to a sanctioned party and provides clear, documented support for compliance reviews.

Grant Agreement Signatures and Communications

Coordinating execution of the grant agreement by representatives of the designated international organization and the client through a secure e-signature platform, while facilitating communications between the parties on any questions about the agreement. 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

Treasury regulations require that a grant to a designated international organization be made exclusively for charitable purposes (Treas. Reg. § 53.4945-5(a)(4)); a signed agreement is one way to document that purpose. The agreement also carries the grantmaker’s language on use of funds, anti-terrorist financing and sanctions compliance, and any reporting it requires. Paragon facilitates the exchange so the terms both parties accept are documented before funds move.

Wire Information and Confirmation of Receipt

This service includes the following steps:

Securing the international organization’s wire information via secure e-signature platform
Verbal verification of wire details
Confirming receipt of funds by the international organization

Paragon compiles these steps into a report, creating a clear record that the payment was authorized, transmitted, and received as intended.

Why

Verifying wire details before a payment prevents misdirected and spoofed wires. Large multilateral organizations hold many accounts across many banks and currencies, and a contribution routed to the wrong account can take months to trace. Written instructions, a verbal confirmation that they are correct, and the organization’s confirmation of receipt close that gap.

Documentation Provided

At the close of each IO PLUS engagement, the client receives the International Organization Packet, compiled into one package with a table of contents and structured for review by counsel and oversight committees:

Designation and founding documents

Executive Order

A copy of the Executive Order designating the organization under 22 U.S.C. § 288

Founding Instrument

The convention, agreement or other instrument establishing the organization

Sub-Unit Documentation

Where the grant is directed to a branch or sub-unit, the document identifying that unit as part of the designated organization

Where applicable

Correspondence and Backing Documents

Correspondence with the organization on key clarifications, and documents it supplies, such as audited financial statements or annual reports

Due diligence

ATFS Report

Anti-Terrorist Financing Screening (ATFS) report with screening logs and exhibits

ATFS-HR Report

Higher-Risk Anti-Terrorist Financing Screening (ATFS-HR) report, provided when the Higher-Risk screening option is requested

If requested

Grant execution

Grant Agreement E-Signatures

Secure e-signature facilitation of grant agreement signatures

If requested

Wire Verification Record

Wire instructions secured in writing, a record of the verbal verification of wire details, and confirmation of receipt

If requested

Who it is for

When Grantmakers Use IO PLUS

IO PLUS is available to U.S. grantmakers only, because the designation and the treatment described above arise under U.S. law. It is for grants to a public international organization designated under 22 U.S.C. § 288, or to a branch, office or program of one.

Whether a grant may proceed on the basis of the designation, or through an Equivalency Determination (ED) or Expenditure Responsibility (ER), is decided by the grantmaker and its counsel. IO PLUS does not include an ED or an ER procedure. Where the grantmaker proceeds through an ED or ER, Paragon’s ED PLUS and ER PLUS services apply instead.

Higher-Risk Screening Option

For grants involving larger award amounts, higher-risk geographies or other elevated risk indicators identified in the client’s own assessment, Paragon can integrate its Higher-Risk Anti-Terrorist Financing Screening (ATFS-HR), a Tier 2 procedure within the Four-Tier Framework, into the IO PLUS process. ATFS-HR adds national and local sanctions screening via Dow Jones RiskCenter, adverse media searches covering terrorism, sanctions exposure, financial crime, corruption and misuse of funds, and review of bank-issued account status documentation. Politically Exposed Persons Screening (PEPS) and Adverse Media Screening (AMS) are also available with IO PLUS.

Where IO PLUS sits in the Four-Tier Framework

Tier 1ATFSAnti-Terrorist Financing ScreeningIncluded in every IO PLUS engagement Tier 2ATFS-HRHigher-Risk Anti-Terrorist Financing ScreeningAvailable on request Tier 3IRIntegrity ReviewAvailable on request Tier 4IDDIntegrity Due DiligenceAvailable on request

Delivery

Timeline and Delivery

Timing depends chiefly on how quickly the organization supplies its founding instrument, any sub-unit documentation, and the disclosures needed for screening. Requests for founding instruments and legal-status documentation are often answered by an organization’s legal or partnerships office rather than by the program contact, and Paragon directs its requests accordingly. Paragon provides status updates at each stage, from document collection through delivery of the International Organization Packet.

Rush Order Option

When a grant deadline requires it, clients may elect rush handling for an individual IO PLUS project. Rush handling accelerates the whole project, including collection of the organization’s documentation, which is usually the longest stage. Paragon sets a firm deadline with the organization at the outset, increases check-ins, keeps the project at the top of its queue, and reviews it internally twice a week. The organization’s responsiveness remains outside Paragon’s control, and rush availability depends on current workload and is limited during the holiday season.

Limitations

Paragon Philanthropy is not a law firm and does not provide legal advice; its services are administrative, risk-screening and facilitative only. IO PLUS documents an organization’s designation. Whether the designation, and the treatment described in Treas. Reg. § 53.4945-5(a)(4)(iii), applies to a particular grantmaker or grant, and whether a designation extends to a branch or sub-unit, are questions for the grantmaker and its counsel.

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