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§ 20.4 GRANTS OF FUNDS FROM U.S. CORPORATION-RELATED FOUNDATIONIf the determination is made that expenditure responsibility must be exercised,the foundation must conduct a pregrant inquiry of the potential grantee.This requirement entails a “limited inquiry . . . complete enough to give a reasonableman assurance that the grantee will use the grant for the proper purposes.”30 The following data is usually sufficient to satisfy the pregrant inquiry:• Basic institutional character (such as educational institution and researchinstitution)• Names and titles of officers and managers• Tax status of the proposed grantee in its country of origin• Any previous grant history with the private foundation• Summary of information reflecting the proposed grantee’s accountability• Private foundation’s analysis of the suitability of the proposed grantee forthe requested fundsWhen a foundation is satisfied that the grantee will use the grant for its statedpurposes, the actual grant must be accompanied by an agreement to be signedby an officer of the grantee organization, specifically covering limitations on thegrant and providing the grantee’s assurance of its intended compliance with allconditions.(d) Overseas Grantee CategoriesFor both the charitable purpose determination and the analysis as to whetherexpenditure responsibility is necessary, the character of the grantee organizationis important. Fundamentally, four categories of grantee organizations maybe recipients of grants from U.S. private foundations:1. Foreign governmental units that do not have the status of tax-exemptcharitable entities under U.S. law2. Foreign organizations that have obtained recognition as tax-exempt charitableorganizations under U.S. law3. Foreign organizations that are recognized as “equivalent to” Americantax-exempt charitable organizations4. Foreign organizations that are within none of the above categories.Governmental units are entities such as agencies and instrumentalities of foreigngovernments and other international agencies. 31 The terms foreign governmentand agency of a foreign government are used throughout U.S. tax law in theirgenerally accepted sense, including a state or local ministry or department, or abureau or office of a ministry or department. An instrumentality of a governmentunit is slightly more complex. Taken in its generally accepted meaning, an30 Reg. § 53.4945-5(b)(2).31 Reg. § 53.4945-5(a)(4)(iii). 573