Opinion: Bridging the verification gap between corporate philanthropy and NGOs

How does India authenticate NGOs? Is there a list of standards for nonprofits in Croatia? Does the U.N. Application Form for Non-Governmental Organizations cover NGOs working in Algeria? What is the IRS Form 990 equivalent in Gambia?

For too many multinational corporations, these questions and many more are at the center of a vexing problem that may be slowing corporate giving programs. As they seek to match corporate philanthropy — such as grants, product discounts, or pro-bono services — with their international footprint, corporations are moving forward with an abundance of caution, often to the detriment of global development organizations.

Their wariness is warranted. Without a universal global philanthropic standard, validating the nonprofit or charity status of the world’s estimated 12.3 million NGOs is fraught with challenges. Local laws and regulations governing nonprofit organizations change constantly and can be difficult to track and decipher. In this environment, determining the bona fides of an organization can be difficult, particularly if it is operating in a country outside of where a company is headquartered.  

The lack of clear standards cuts both ways. For many NGOs in need of products, support, and funding, getting the attention and trust of corporate giving programs can be almost impossible. And trust, a critical component for NGOs, is slipping. According to a recent poll fielded by Gallup and Wellcome Trust, only 52% of the global population has confidence in the charities operating within their country’s borders, which may also strain corporate confidence. All told, these factors can lead to missed opportunities for global development and dire consequences for communities around the world.

So, how can we bridge this gap between corporate philanthropy and NGOs and bring greater resources to address today’s problems?

Mapping the NGO ecosystem

While there is currently no one-size-fits-all standard for verifying NGOs globally, there are detailed definitions, processes, and data that corporate philanthropy programs can use to validate an organization’s nonprofit status. One level of verification is to confirm that an NGO based outside of the U.S. meets the standards of a U.S. public charity. A deeper level is to verify if an NGO meets local charity standards of the country where they are located.

Localized eligibility definitions, or LEDs, provide clues to an NGO’s status. LEDs include basic information, such as an organization name and location, to more detailed identifiers such as legal IDs or local government certificates, as well as organization budget information. In most of the world’s 236 countries and territories, the LED information needs to be gathered manually and updated regularly, making it nearly impossible to automate validation at this point — and very challenging for individual corporate philanthropy programs to accurately manage and monitor.

Partnering with experts

That said, groups such as TechSoup have spent years mapping the often-changing NGO ecosystem. Like Darwin on the Galapagos, these organizations have created an extensive taxonomy that validates an NGO’s status for public, private, and philanthropic purposes. TechSoup Validation Services works with more than 70 global partners — experts in the countries and territories — to verify the charitable status of about 150,000 nonprofits annually. All told, the organization has built a database of 1.1 million NGOs.

Choosing to partner with a third-party validator could enable corporate philanthropy programs to scale more rapidly, reduce risk, customize programs to meet an organization’s philanthropic intentions, and build secure and accurate global philanthropy programs.

For example, Airbnb’s launch of its social impact experiences program in 2016 leveraged the TechSoup database to validate its partners, enabling it to expand in two years from 12 cities and 48 NGOs to more than 1,000 cities and over 900 NGOs. TechSoup also works with Okta, Amazon, Microsoft, Google, PayPal, and many other firms to validate corporate philanthropy programs.

Benevity has also helped corporations expand philanthropy through corporate social responsibility and employee engagement software, including online giving, matching, volunteering, and community investment. Benevity’s programs, available in 17 languages, now serve an employee base of 10 million users around the world. Working with such companies as Coca-Cola, Levi Strauss, and Apple, the organization relies on validation services to process nearly $3 billion in donations and 17 million hours of volunteering time to 200,000 charities worldwide.

Unlocking corporate philanthropy

As corporate philanthropy programs discover new tools to validate nonprofits, we envision an unlocking of resources for nonprofits up and down the NGO landscape. Currently, corporate philanthropy only reaches the largest multinational charities because they are deemed the safest. But smaller, country-specific NGOs doing some of the most ground-breaking and effective work are often the ones who need support the most.

Whether it is grant-making, employee programs, or discounted resources, the $1.3 trillion global NGO sector needs critical support. Enabling companies to expand their philanthropy in a sustainable and standardized way is critical to getting NGOs resources and helping them fulfill their own missions by providing resources and tools that otherwise might not have been at their disposal.

Update Aug. 20, 2019: This article has been updated to clarify that LEDs are localized eligibility definitions.