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INTERNATIONAL GIVING BY CORPORATIONSrecognition of tax-exempt status (Form 1023), because the foundation itself isassuming the burden of determining with convincing documentary evidencethat the prospective grantee meets the essential requirements for public charitystatus. This includes evidence of the prospective grantee’s nonprofit status andcharitable purposes, copies of organizational documents, relevant statutorydecrees, evidence (if any) of local tax standing, description of the intended usesof the grant, identification of the organization’s directors and officers, and certificationby an officer as to the correctness of the information (and compliancewith the standards listed above). This documentation must be retained by thegrant-maker to defend the grant in the case of an audit by the IRS.According to U.S. law, if a grant is made to an organization that does nothave a ruling or determination letter that it is a public charity, the grant will beconsidered as made to a public charitable organization if the grantor foundationhas made a “good faith determination” that the grantee organization is a publiccharity. 40 The determination is based on an affidavit of the grantee organizationor an opinion of either the grantee’s counsel or the grantor’s counsel that thegrantee is a public charitable organization, setting forth sufficient facts concerningthe operations and support of the grantee for the IRS to determine that thegrantee would be likely to qualify as a public organization.If an organization has been determined to be organized for charitable purposesand to be a public charity under U.S. law, there will be a strong presumptionthat grants to it are made for charitable purposes. Thus, a private foundationis allowed to rely on the IRS letter of determination in satisfying this portion of itsinquiry. The presumption also follows when the foundation has made a goodfaith determination that the organization is organized and operated for purposesthat render it equivalent to a public charitable organization.U.S. law requires expenditure responsibility concerning grants made to charitableorganizations and their equivalents unless these organizations can be classifiedas public charities. 41 Several categories of public charitable organizations areembraced by this section, including various educational organizations, hospitalsand medical research organizations, churches and associations of churches, organizationsthat receive sufficiently wide financial support from a governmentalunit or from the “public,” and organizations that support one of the above typesof organizations and meet certain other criteria. 42(f) IRS Simplified ProcedureThe IRS developed a simplified procedure enabling private foundations in theUnited States to make grants to foreign charitable organizations, relying solelyon an appropriate affidavit. 43 Essentially, this simplification is accomplished byeliminating the need for a lawyer’s opinion as to the tax status of the foreigngrantee. 44 This procedure is not available when the grant is a transfer of assets40 Reg. § 53.4945-5(a)(5).41 IRC § 4945(d)(4).42 See § 3.4.43 Rev. Proc. 92-94, 1992-2 C.B. 507.44 See § 20.4(d), text accompanied by note 31. 576