International grantmaking — making grants to organisations in other countries — adds a layer of complexity beyond domestic grant programmes. The additional requirements include foreign legal entity verification, multi-currency management, sanctions and anti-money laundering screening, and, for US foundations, IRS expenditure responsibility obligations. These requirements are not hypothetical: the consequences of funding a sanctioned entity or failing to exercise required oversight are significant.
This guide covers the specific requirements of cross-border grantmaking and what grants management software should support.
IRS expenditure responsibility (US foundations). When a US private foundation makes a grant to a non-public charity — including most foreign organisations — it must exercise expenditure responsibility. This requires a pre-grant inquiry into the grantee's governance and finances, a written grant agreement specifying the charitable purpose and usage restrictions, annual reports from the grantee on how funds were used, and inclusion of the grant in the foundation's Form 990-PF. Software that supports the expenditure responsibility workflow — pre-grant inquiry documentation, grant agreement generation, and periodic reporting requirements — is important for US foundations with international programmes.
Equivalent distribution (EQ determination). An alternative to expenditure responsibility for US foundations is an EQ determination: a documented finding that the foreign organisation is equivalent to a US public charity. EQ determinations require legal counsel and due diligence, and must be documented. Maintaining a register of organisations with current EQ determinations is a practical necessity for frequent international grantors.
Sanctions screening. Grants to sanctioned individuals, organisations, or jurisdictions violate anti-terrorism financing and sanctions regulations in most markets. Pre-award screening of applicant organisations and their principals against relevant sanctions lists (OFAC in the US, DFAT in Australia, FCDO in the UK, UN Security Council lists) is required. The frequency of rescreening — on application, on award, before each payment — varies by funder policy. Software that integrates with or supports structured sanctions screening workflows reduces manual overhead.
Anti-money laundering. Some jurisdictions require AML checks on grant recipients above certain thresholds. This is more common in banking than in grantmaking, but large grantmaking organisations and those distributing government funds may have AML obligations.
Foreign charities verification. Verifying that a foreign organisation is legally constituted as a charitable or non-profit entity in its home jurisdiction is more complex than verifying a domestic charity registration. Some jurisdictions have public charity registers (ACNC in Australia, Charity Commission in England and Wales, IRS tax-exempt database in the US); others do not. Software that maintains a record of verification outcomes for foreign entities — what was checked, when, and by whom — creates a defensible due diligence trail.
Multi-currency management. International grants are often denominated in one currency but paid in another. Exchange rate management — recording the rate used, tracking exposure, and reconciling grant payments with financial accounts — requires more than a single-currency system.
International payment support. SWIFT transfers, SEPA payments, and other international payment mechanisms have different processing requirements, fees, and timelines than domestic payments. The grants management system should integrate with payment systems or support handoff to finance systems that manage international payments.
Time zone and date management. International programmes span multiple time zones. Application deadlines, reporting milestones, and communication timestamps should be clear about the reference time zone — or manage timezone conversion.
Multi-language support. Applicants and grantees in other countries may not be primary English speakers. Application and reporting forms in relevant languages increase accessibility and data quality.
Reporting against multiple frameworks. International funders may need to report against both domestic and foreign regulatory frameworks — for example, a New Zealand foundation that makes grants in Pacific island nations may need to report against NZ Charities Act requirements and separately demonstrate due diligence for overseas programme activity.
Due diligence record management. The platform should allow attachment of verification documents — foreign charity registration certificates, EQ determination memos, audited accounts, sanctions screening records — to the applicant or grant record. These should be searchable and accessible for audit purposes.
Expenditure responsibility workflow. For US foundations, this is a specific compliance sequence: pre-grant inquiry → grant agreement → periodic reporting → 990-PF inclusion. The platform should support tracking the status of each element for each international grant.
Sanctions screening integration or structured process. Either native integration with a sanctions screening service, or a structured process within the platform for recording screening outcomes and triggering rescreening at appropriate intervals.
Multi-currency recording. Grant amounts, exchange rates used, and payment amounts in both originating and receiving currencies should be recordable in the platform.
Grantee portal accessibility from the destination country. Grantees in other countries must be able to access and use the platform. This sounds obvious but has practical implications: the platform must be accessible without a VPN, must load acceptably at lower bandwidth, and must not have geo-blocking that prevents international access.
The consequences of compliance failures in international grantmaking are asymmetric. A sanctions violation can result in significant financial penalties and reputational damage. Failure to exercise required expenditure responsibility can jeopardise the foundation's tax-exempt status. These risks are substantially larger than the operational inconvenience of running international grants through a spreadsheet — which is why funders who operate internationally should view proper documentation infrastructure as a risk management investment, not an optional efficiency improvement.
Tahua supports international grantmaking with due diligence record management, multi-currency tracking, and structured documentation workflows.