SPEAKER_00 0:12

You're listening to the Philanthropisms podcast with Roger Davis. Hello, you're listening to the Philanthropisms podcast. This is the podcast where we try to put philanthropy in context. I'm your host, as ever, Rod Davis. And this week we are in conversation with Martha Lachritz-Peltier. Now, Martha is the general counsel of TechSoup, which is an NGO headquartered in the US but operating all over the globe, that's been around for many years now, helping uh organizations in the in civil society, the nonprofit sector, to access uh technology solutions and also sort of providing uh technological solutions to various challenges facing um the sector. Um and I had a really interesting conversation with Martha about uh something that might at first glance seem quite technical, um, which is you know sort of to do with the ins and the outs of compliance and how money works within civil society, and also things like equivalency determination for the status of nonprofits. But I think what we tried to do in the conversation was to zoom out a bit and relate this to some much bigger picture issues about uh international development and the kind of power imbalances um in grant giving and within philanthropy, and also the the desire of many to sort of ensure that money is as localized as possible. Um so yeah, we talked about what Martha does at TechSoup and also um particularly the work she's done with NGOSource, which is a particular service that TechSoup offers. Um we also sort of talked first about um the idea of the UN's grand bargain, which is essentially this pledge that the UN made, I think, back in 2016, um, to try and get more international aid and development money provided by governments and by foundations and other grant makers to be given down to the lowest possible level, essentially to kind of organizations operating in country in in developing economies and in the global south, rather than just being delivered by big international NGOs or INGOs. And we talked a bit about uh why it was that that ambition hadn't really been realized so far and what what the factors were playing into that. And then we talked about how uh NGO source um and and uh TechSoup more broadly uh tries to kind of address that in one particular way by making it possible for people to uh get easy information on the equivalency of NGOs in different countries, essentially sort of saying, look, you want to give from the US to this country in, I don't know, South Sudan or something. But how can you do that in a way that you can have confidence that that organization you're giving to would meet the requirements for giving here in the US? And also, you know, similarly, how would that work in in lots of other places around the world? And we talked a bit about how that worked, you know, very much on the sort of technical side in terms of meeting the requirements of of US tax law, which is the starting point, but also how that uh has expanded into something broader, uh a service that kind of allows funders and individual donors to understand how they might give across border more easily. And we talked a bit about the challenges and responsibilities of operating a platform, how you kind of protect the data that is on that platform, what your responsibility is as a platform operator about what does or doesn't appear on that platform, and whether you have to make uh difficult choices about including some organizations or leaving others out. Um we also talked about governmental attitudes to international development and cross-border giving and whether actually many governments are as enthusiastic in practice about money leaving the confines of their particular tax jurisdiction and going to help other parts of the world as they sometimes, you know, the rhetoric would suggest they are. We talked a bit about um how uh international regulation through organizations like uh FACA, the Financial Action Um uh Group uh that the US operate can impact in quite severe ways the ability of uh charities and INGOs to move money around um and what some of the uh the challenges uh in that are and what some of the solutions might be. And then we talked a bit about the the sort of promises and perils of emerging technology technology and how that might be harnessed by philanthropy and civil society. Um so without further ado, let's go into the conversation. Uh I hope you enjoy it. I certainly did, uh, and I'll be back at the end for the usual bit of housekeeping and tidiness. Okay, great. So I'm here with Martha Laprit Peltier. Hi, Martha. Hi. Uh and Martha, as you might have gleaned from uh the intro to this podcast, is general counsel at TechSoup and also uh works with a particular project of TechSoup called NGO Source, which we're gonna hear plenty more about uh in a moment. Um, maybe the best place to start is just for you to say a little bit about who you are and your background and kind of what brought you to working with TechSoup and indeed what TechSoup is and what it does.

SPEAKER_02 5:40

Yeah, absolutely. And and I'm it's such a privilege to be here on this podcast. So thank you for having me, Rodriguez. So I and I recognize TechSoup is probably a little bit less familiar to people outside the US. Um, but so briefly about myself. Uh I am an attorney. My background is in nonprofit tax-exempt law and international grant making. Um, I joined TechSoup, primarily focused on the NGOSource program, um, leading the legal operations in late 2016. And I um became general counsel of TechSoup, um managing all of its legal operations as well as the NGOSource program a few years ago. So my current role is focused on compliance, risk management, um, all things legal on the TechSoup side. Um, the NGOSource program, which I'll talk about in a moment, is very much based on a tax law standard in the US. So naturally is also under my portfolio. Um and it is also focused on kind of due diligence and how do we effectively um facilitate the flow of resources to civil society globally. So um all of those are within my purview, and thus a big part of what I do has to do with vetting, due diligence, and um the flow of philanthropic aid. So uh briefly about TechSoup or as brief as I can. Um, it's we are a charity that is headquartered in San Francisco. We have offices and operations around the globe. Um I think it often helps to understand um where TechSoup is now, just to briefly introduce kind of its um how it was formed. We were founded in the late 1980s at the nascency of Silicon Valley. It was literally at that time a few people trying to figure out how local nonprofits could benefit from the emergence of uh digital technology. So they were connecting early computer companies with small nonprofits by transform, literally transporting in a truck things like overstocked floppy disk drives and other materials that could benefit uh civil society within the San Francisco community. And the idea was really how do we ensure that civil society isn't left behind as the for-profit sector benefits from this early technological boom, which has really continued, as we know. So fast forward almost 40 years later, and TechSoup now has an online catalog with hundreds of donated and discounted technology offers, largely software, but we also do things like refurbished hardware donations, courses on how to use and benefit from technology, meetups around the globe, cybersecurity tools and resources, and a host of other programs that more broadly leverage technology for the benefit of the nonprofit sector. And really, particularly the smallest organizations most in need with very small budgets around the world who benefit most from, say, you know, a free suite of Microsoft or Adobe. Um, so those other programs that have grown out of kind of what was initially this catalog program is, you know, an Apps for Good program, free digital assessment tools, and other projects that are really hyper-focused on ways to more effectively deliver aid using technology and breaking down barriers to the flow of resources to civil society. And that's really the niche that NGO Source fits into. So it's a program that was launched in 2013 as a digital repository of vetted organizations outside of the US that meet certain US tax law requirements for foundations to make unrestricted overseas grants. Um, it is entirely modeled after tax law requirements. So it's the it's a it's a vetting program that we don't have a whole lot of wiggle room in terms of what we look at. Um, but it's been enormously successful in reducing duplication and resource waste, not only on behalf of the foundations, but in particular on behalf of their grantees. These organizations now have the option of fulfilling a vetting process in their local language, entirely online, and then being able to reissue the outcome of that vetting to multiple funders rather than having to redo it each time a new funder has a need. So this localized repository model at NGO Source is actually what has led us to build versions that are more tailored to just tailored to more than just US funders, but anyone looking to learn more about um an organization's capacity and helping it build that capacity and then get resources to it in a repository format, again, to prevent um to create more of a uniform standard and and and reduce duplication and resource waste.

SPEAKER_00 9:48

Great. I think it's a really uh really great run-through of um both uh organizations there. I guess uh what would be really useful, I think you've used you've sort of talked there and mentioned various words that I think might have set off alarm bells in some people's heads uh around you know things like uh equivalency and compliance. And I know that I think they're things that people are aware are very important, but for most people their their sort of eyes glaze over when they hear about this. And I think what I'm really keen to do in this conversation is uh to try and sort of take a step back and put some of that work in context and make people understand why actually it's pretty sort of fundamental to addressing some of the challenges at the moment within kind of global civil society and particularly around kind of international aid and development. And sort of zooming out a bit, um, it'll be really useful to get some thoughts from you on the wider context for the work you're doing at NGO Source. And particularly, I know you're sort of interested in the idea of the grand bargain that the UN has sort of put forward, which is about this idea basically of trying to shift the operations of international NGOs more towards empowering and giving over resources to local partners and whether that has actually happened in practice, whether there's still a gap between the sort of the rhetoric and the reality. Uh you know, what's your sort of take on where things stand there at the moment and how much further there is to go?

SPEAKER_02 11:06

Yeah, I mean, it's a great question. And I and I and I will say you're right. I mean, I think people often hear exactly as you're saying, they're run away from the term compliance. And I spend most of my job as an attorney explaining why it isn't that scary. And that I think what worries me the most is I hear funders get so nervous about it that that there is this impetus to be totally risk averse when there isn't a need to. And um, and you know, I can talk about that a little bit more. Um, but about, you know, the grand bargain, I think probably a lot of your listeners are familiar. It was this 2016 convening of um major development funders, uh, both government agencies, um, you know, UN, six of the largest UN agencies, I want to say, and then a number of large private donors like the Gates Foundation. Um, the impetus was really to agree to certain goals to improve the direction of humanitarian aid by seeking, for example, to drastically increase the amount of aid going directly to frontline organizations and really bringing them more into the conversation. I think the problem that many of us are aware of, um, which is which is not one based on any kind of um ill will or nefarious intent, but is again goes back to the question of risk aversion and compliance in a lot of ways, in my mind. So you have um government agencies who are not willing to accept any kind of liability or risk, and therefore they sort of transfer that risk forward to whoever they're giving the funds to. That necessarily requires that that initial grantee have, you know, be sophisticated enough to have robust compliance mechanisms in place and the ability to shoulder potential liability. So they're able to, which then makes repeatedly the primary recipient of these large development funds to be large international, often northern-based organizations, who are then able to, you know, subgrant or subcontract with smaller entities, who are then, you know, then themselves subgrant and subcontract to other entities until the funds actually end up on the ground with the organizations that are, you know, delivering the aid. Those organizations are often excluded from that direct chain of funding and instead are, you know, end up being three or four tiers down. Um, again, not because anyone is trying to steal money from them, but because essentially it's the only effective way to shoulder the various liable tiers of liability along the way. So this was um something that the grand bargain signatories at the time recognized was a problem. And you know, what happens is there have been lots of studies showing up to at least a year or two ago that of the funds granted at the from the very top from these large donors and development agencies, somewhere between one and two percent is all that is actually sort of landing in the hands of the local actors who are delivering those funds. Again, not because of fraud, but because of the way that the system breaks down, kind of tries to um distribute the liability in different ways, that that's sort of the reality of what ends up happening. And so the idea was how can we make certain commitments to say, for example, by 2020, 20% of our or 25% of funds will go directly from donors to those local organizations, skipping that sort of line. Um, and and that just hasn't happened. You know, we're still at about 2% that actually end up at the at the very core of the organizations that are delivering the aid. And so it's been recognized as as a as a failure that um I think that the grand bargain, even it has gone on to collect many more signatories who have signed on to it and and other foundations who agree that this is a very noble aspiration, um, just sort of rethink why is it that this is still happening and why haven't we gotten there yet?

SPEAKER_00 14:32

Yeah, absolutely. And I I wanted to ask, because I think you know, you said they're like part of the problem is is just that that risk appetite or sort of perception of risk on the part of funders. What do you think it is? What's the nature of that risk? I mean, is it a sort of reputational risk that they're worried that something will go wrong and they'll they'll get criticized for it? Is it kind of fear of falling foul of regulation and and and kind of legal requirements? Is it a fear, perhaps an unfounded one, that the money will be misspent or misappropriated in some way if they pass it on to smaller organizations in country? Or is it is it in part just sort of sheer force of inertia and force of habit where they do kind of want to do this stuff in theory, but they just don't really know how to do it in practice? I mean, what do you think is the biggest barrier?

SPEAKER_02 15:22

Oh, no, that's a great question. Each time you said something, I thought, yes, yeah. And then you can no, it's also that. Um, you know, I do think in terms of the risk, I think a lot of the of course it's not entirely unfounded. I do think that it's it's um often exacerbate, blown up beyond the reality, right? I think that the so starting with kind of the reputational side, um, you know, there is this the reality is that fraud and instances of abuse, no matter how small a percentage of the overall sector, do exist, and when they're uncovered, are widely reported, right? So we always hear about these scandals if something happens within a large organization or a small organization. And that then sets off a whole bunch of alarm bells and new regulations and new procedures and processes and policies that have to be put in place to ensure that this doesn't happen again. Um, so I think there's a lot of fear around the reputation, the giant news stories that will go out and the people that will lose their jobs and the politicians that will be blamed. Um, so I think that's a part of it. And I don't think, and I think those are really fear-driven by some instances that have gotten a lot of attention. But when you look at the, if you really are, you know, spending all day in the sector and going through these organizations, you see what a small percentage that is of the overall, um, of the overall sector, which is not to say we shouldn't be focused on that and trying to fight that, but I think that that's really blown out of proportion and that reputational fear has um a big impact on the risk appetite of of both governments and private funders. The the other thing is, you know, the basically since 9-11 in the States, all of the anti-terrorism um regulations that have come out of the US and then also out of EU countries as well, which are really aimed at how do we fight terrorism and I don't think have been particularly successful, but that doesn't keep them from sort of expanding the those regulations and trying to sort of implement them in all aspects of an organization's of really legislation and regulation, right? So a good example of that is um at Ingiosource, we do these tax law opinions that are typically very separate from anti-terrorism regulations. And in 2017, they added a new requirement that we also start running anti-terrorism checks on these tax opinions, which is a little bit unusual, but you can see how it starts sort of adding these new processes and regulations into all aspects of due diligence and of nonprofit operations in a way that makes it kind of omnipresent and continues to add one burden on top of another, um, both for the funder and and in particular for the grantee. So I think for me, I'm seeing like this this reputational kind of prevalence of when a single episode kind of blows up, as well as the anti-terrorism, anti-money laundering regulations that, you know, they're they're largely antiquated, um, haven't been proven to be particularly effective. Nonprofits are, you know, sort of wrongly targeted often as potential for abuse, without there being a lot of evidence that that is the case. Um, and so I think there's a lot of misinformation about um about the risk that is actually there. And that that has just taken a really long time to kind of break down where that's coming from. And, you know, and there have been some great organizations out there starting to collect data around whether that is an actual risk and and whether the kind of you know new measures that are being put in place are even effective or whether they're actually just exacerbating the problem of getting getting aid to the right places. So, I mean, a a long way of saying, I think it's a little bit of everything. Um, I I'll add to your last point about, you know, not having a good solution. I think that is a big one. I think, you know, we talk to a lot of foundations that are very heartfelt belief that we need to be able to locate local actors that can accept funds and that can have and can grow and that we can trust. And even if the funds aren't, you know, if if if they end up having blocks along the way or obstacles, that we can help them grow from it and learn and build up their own compliance and risk management processes, but we don't even know how to identify them in the first place, much less how to kind of help them figure out the kind of risk management compliance processes that they need to have in place for us to have enough faith to get them those funds. So I do I do think the, you know, it's been about 10 years of beating the drum of we need a better way to do this. And it's so complicated, you know, I and because there are existing paths in place, you know, you can just give to a large INGO who will manage the compliance risk, um, there there just hasn't been enough of an impetus to put something in place to sort of resolve that, which is what we've been working hard to try to do.

SPEAKER_00 19:38

And yeah, and I guess that brings us on to neatly to the work of NGO source and kind of why that is at least uh, you know, if not a solution to the entire problem, because as I think we've kind of made clear there are sort of multiple different factors at play here. But it it does provide at least a sort of partial practical solution to some of it. Maybe you can just say a bit more about kind of how the work you do in providing kind of equivalency determinations actually helps to sort of overcome some of the blockages that there might be to funders shifting some of that money to kind of smaller organizations uh in kind of recipient countries.

SPEAKER_02 20:13

Yeah, absolutely. So I think you know, the the first few years, a few years of NGOSource's launch, I wouldn't, I would say that the majority of the grantees benefiting were more large grantees that had been, you know, traditional recipients of aid. As the program really kicked off, and you know, we have over, we've had over 600 members, um, we've issued over 20,000 of these equivalency determination opinions. Um, as we become more of a standard within the sector, it also gives us the leverage to help sort of explain and standardize the way that funders view the giving process. So, you know, I spent a big part of my job, as I said, is just sort of talking down people that are new to philanthropy about what they don't need to be afraid of. You know, sometimes it's very often that we'll have a large company foundation that wants to do good, doesn't know enough about it. And so the easiest path forward is just to say, I'm only going to give in those countries where there are no sanctions and there's no risk and nothing has ever happened, right? And it's a lot of kind of like, oh, that's not even your, you know, first of all, there can be just as much risk in, say, the UK as there is in in, you know, Ghana. So I wouldn't necessarily just assume, you know, that one is less risky than the other. So, but I think um sort of solidif bringing all of these parties together to kind of understand and learn from each other where there is risk and where there isn't, and helping to set that standard and educate the sector overall has been, I think, really big. Um, our our more ambitious approach to this is um is an aspect of NGO source that we are calling um STEP. And it is a it is a tech suit program, um, but it follows the NGO source model. And this is a program that that does a couple of things. One is we are trying to identify those local civil society organizations. And in fact, we're very careful with our language here. In the in the case of the STEP program, we don't usually say NGO because that's often limiting, right? And in many countries. That explains a very specific kind of entity. And not all entities meet that definition. You can have an organization maybe that is established in a country where they would be persecuted if they register as an NGO, so they form under a different kind of entity type. So it's it's intended to be more inclusive of the kind of organizations that are serving their communities. But what it does is it um works with our local partners around the globe. Um, TechSoup has 63 um independent NGO partners that help us deliver services. So we work with them to help identify local organizations on the ground that are delivering aid in any kinds of, you know, not necessarily your traditional humanitarian organizations. They may be just community benefit organizations. Um, but identify who they are, then put them through kind of a basic vetting program that not only kind of puts them on the map for funders so that funders can easily find them, but also serves as a roadmap for the organization itself to better understand why it has it not received funds from international funders in the past and what might it do in order to be more eligible. So it essentially says we're putting we're giving you this kind of diagnostic of your current um, you know, uh risk management profile. Do you have what does your board look like? Do you have more than one board member? Do you have, you know, what kind of financial controls do you have in place? What kind of safeguarding practices do you have in place? So we give a very holistic review of all of its operations and its compliance processes. And so, and then it is included in the repository as an example of an organization that is doing good and that has been vetted to some extent. And then we sort of send, we send to the organization a tailored outline of what it could do in order to be more eligible for funds. So that may be go take these courses on safeguarding and understand why it's important to have a safeguarding policy in place. And then we'll connect you with, you know, local pro bono attorneys who can help you draft a policy. So it's really going through the entire trajectory of an organization's vetting and potential for grant for a grant from an international funder, showing them what is normally required because they've been, you know, largely excluded from this process in the past because they've been traditional sub-grantees. Um, and then giving a path both for the organization to build up its own profile to earn, to sort of earn that trust, if you will, but also just getting them in front of more funders so that funders can say, oh, I actually am familiar with this organization and can make more nuanced funding decisions based on the information that we have sort of called for on those organizations.

SPEAKER_00 24:25

That's yeah, it's really interesting. Because I was going to ask actually whether your the equivalency determinations you do were were largely driven by demands from funders, because it seemed to me that might be a challenge in that if they aren't already looking to towards smaller organizations, then it's sort of hard, you know, there's a kind of chicken and egg problem. But if you're able to more proactively go out and do those determinations on organizations that might not be on the radar of large funders, that's uh that's really interesting. How is that how is that funded? Because I'm assuming that the work you do where a funder comes to you asking, look, can you do an equivalency determination for us? There is that sort of a fee associated with it. But if it hasn't been driven by a funder coming and asking for it, but you're doing it because you know you kind of believe in in the greater good of kind of making it possible for people to give to these smaller organizations. Do you have core cost funding that that sort of goes towards that work?

SPEAKER_02 25:18

Yeah, absolutely. And you know, we've been primarily so far as we've been piloting the program, um, because we're rolling it out in various regions and local languages. And each time, you know, something that's another important distinction between this STEP program and NGO source is NGO source, because it is a product of the US tax code, we're actually required to draft these opinions by a US attorney. Whereas this STEP program, again, we're trying to break out of that kind of the prison of that um process and say, wouldn't it be better if it's actually a local evaluator who better understands the landscape of the nonprofit sector within their communities? And so one important distinction is, you know, I'm not the one doing the vetting. It's one of our partners in a local country. And so this is why it's take, you know, it's it's a long process to pilot the program overall because we're introducing it in different regions. And each time we introduce it to a region, we train a partner who picks up the standard and then learns and adapts how to vet within that global partner's own region. So this work has been primarily um funded by foundations who have looked to us to help, who I think are excited about the idea of a solution possibly being put forward. As part of that, then we're also um covering payments largely to our global partners who are conducting the evaluations, as well as sometimes payments to local organizations to incentivize them to go through the process and help us learn from it as sort of test users. You know, this is not forever sustainable in my mind. This can't be, but likely will not be forever um funded by grantmakers. The idea is that organizations should be able to order this kind of process on their on themselves. Um, I think what makes that tricky, obviously, is we therefore need to keep it as a low cost as possible. And the lower cost we make the actual process, you know, the less stringent it is going to be because we have, you know, as as a as the practical reality of scaling, we're not doing site visits, for example, right? Because that is much too expensive. Um, and so there's there's a little bit of a tension there is how can we keep it as low cost as possible without sacrificing the quality of the review? Um, the other aspect of it is though, that, you know, as I mentioned, we're building this resource portal, which is the other side of it, you get vetted, and then you receive these tools, sort of free or very low-cost resources that will help you actually build up your risk management profile. So our hope is that for certain organizations, if we can keep the cost low enough for them to go through the process for the benefit of learning from it, of being part of the repository, and of then getting access to all of these resources might be enough impetus for them to pay for it themselves. Now, I think this has to be tested. Um, you know, and I think another part of it is we'll probably always hope to ask foundations for their support as well. I could imagine, you know, one of the things we're talking with various foundations about is um if you want us to help you identify a bunch of organizations, then you can pay for their individual due diligence assessments and you know, you're benefiting the sector as a whole because we're building up the repository. One other benefit, large benefit of the repository model is once an organization has been vetted, renewing that that you know evaluation is a much lower cost endeavor going forward. Obviously, an evaluation isn't going to be perpetually valid. And so just like in GeoSource, um, the first time an organization is vetted, there's a certain fee associated with it. But in order to renew that that assessment is much lower cost and can be done at a at a much lower price point, which overall should you know sort of save time on the part of the organization who might choose to fund that value evaluation on itself.

SPEAKER_00 28:46

Yeah, absolutely. It's really no, it's really interesting. And and in terms of the sort of, I'm sort of curious about what the you said something there about some of the challenges, but what what really is kind of the if you're trying to gather together this repository of data both on kind of equivalency determinations, but also more broadly on uh organizations in different countries and regions around the world that funders might want to support, what are the the biggest challenges in doing that? I mean, are they kind of uh purely practical ones in terms of it's just quite hard sometimes to get the information that you require to provide a complete picture? Or are there things like sort of uh political challenges because you're operating in multiple different jurisdictions where governments have quite different attitudes towards civil society? Or are there kind of underlying cultural issues? Because in some of what you've said so far, it sort of hinted at uh one of the problems that I think is really interesting here when we're talking about uh giving across borders, which is uh uh people's sense of what is or isn't philanthropic or charitable or non-profit is is quite malleable and kind of definitions of giving and and non-profit activity vary. And so actually finding a common currency between all of these different places in the world is in itself potentially quite a big challenge. I mean, kind of which of those do you do you find actually presents you with the biggest biggest challenge when you're trying to do this work?

SPEAKER_01 30:03

Yeah, you know, actually I think that the technical aspect, um, which in a way is feels more surmountable.

SPEAKER_02 30:10

Um, you know, I think it's one thing to be vetting large INGOs who we know have gone through these processes before and have reliable access to internet. But if you if our your entire vetting process, as this one, is based on largely remote interactions and online interactions, at a minimum, an organization has to have a reliable internet connection. So, you know, this is the this is one major problem because we're purposely sort of seeking out the smaller organizations on the ground who don't necessarily have the infrastructure in place or whose or whose country may not have the infrastructure in place to ensure a reliable internet connection to just complete an entire vetting, right? And that one's very hard. We can do things like, and which we are doing is get on the phone and get answers that way, right? Um, or use mobile applications. But I, you know, I that that is one of the things that ends up taking the longest in terms of just getting the information. I would say another piece that is also very surmountable and that we're learning from is just anxieties about what might, what might be done with the information, which is which is completely understandable. Um, for us, that is actually one of our core obligations is how do we protect this data, right? And it's not just data, you know, personal data as as defined under GDPR, but it's just activity. Like what is the organization doing? There are many organizations that don't want their local government knowing what they're doing for good reason. And when we're going and saying, you know, give us all of this information about your board and about your activities and about your programs and your finances, there is very often a fear, you know, where exactly is this being stored? Who are you sharing this with? So for us, for the program to succeed at all, we have to be not only have really robust mechanisms in place to secure that data, but also really clear definitions that are understandable to those parties that can sort of engender that trust to make them feel that this really is as important to us as it is to you, um, that this information has the utmost security, that no one will ever see it unless you specifically say that they can see it and for what purpose, right? That there isn't kind of a generic, well, anybody can go in their repository and access this information. It is highly consent-based, um really beyond the parameters of what's required under law because of the kind of organizations that that we do encounter and and just protecting them in all ways. So I think those are kind of the two biggest um hurdles that we found. Otherwise, you know, anyone who's done due diligence internationally, there are the more common ones. There are linguistic issues, the way someone defines exactly as you said, what is charitable, right? If you say, are you a charitable organization? Half of the organizations around the world whom we in the US might define as charitable are going to come back and say, no, because we earn money, you know, or no, because we don't only serve the poor. Um, so that much at least we have a good, um, a lot of educational resources to help understand some of those discrepancies and they're sort of known. You know, it's it's I I can't imagine a world where every organization being being vetted, going some kind of undergoing some kind of compliance assessment, would be able to just finish it with no questions in a very short order. That's always our goal. But I also think, you know, have it having a little bit of a patience and patience and understanding that there is an educational component to this, not only for the funders, but very much for the grantees themselves, to even allow them to get comfortable and fully and accurately respond to those questions is always going to be kind of a hurdle in the process. That's just in my mind, I think funders have to sort of know that and build it into their processes.

SPEAKER_00 33:34

Yeah, absolutely. I think that's that's really interesting to hear. Uh you you said a bit there about one of the responsibilities or kind of core responsibilities that you bear as a as an organization. I guess you know, to some extent, a platform for information is uh ownership and protection of that data to make sure that it's you know not used in ways um that are inappropriate. I I I wondered also uh sort of in terms of the responsibilities of an organization like yourself when it comes to providing information, whether there you've given there's sort of any thought also or awareness of the wider question of the responsibilities you bear in terms of which organizations do or don't make it onto the platform. Um only I only ask because I think there's some really interesting questions that have been asked in the last few years of uh platforms that seek to kind of provide information on uh charities or the ability to give to certain organizations, where either they have allowed uh organizations onto the platform because they, you know, they meet the requirements of laws in a particular jurisdiction, but people have sort of uh argue that actually they just shouldn't be screened out because what they do is uh is uh you know doesn't meet ethical standards, or vice versa, uh platforms have uh not allowed certain organizations on because they are trying to uh play nice with you know certain jurisdictions or governments around the world, but actually by doing so they're almost kind of complicit in uh in the suppression of civil society. Do you ever find that you have to kind of uh make decisions about uh screening out organizations or kind of more proactively allowing organizations to be on, even if that potentially kind of comes into conflict with the rules of a of a particular country or region?

SPEAKER_02 35:12

Yeah, what a great question. You know, I uh so first let me tell you, uh I can respond with respect to NGO source in step, and then I have some kind of interesting perspective from our larger due diligence programs that have been around for for um you know 30 years now. So I, you know, with respect to NGO source, as I said, the problem with that is there is this US tax law definition of what it means to be equivalent, and you either meet it or you don't, and it's a very strict standard, right? So for that one, and and again, we always are trying to be very clear with the organization and the funder, this is not a reflection on whether or not you are doing good work. This has to do with whether you are structured in such a way that an unrestricted grant could be issued under US tax law rules. Now, STEP, again, we really try to benefit from the fact that we're not bound by these US tax law standards for this particular program and get away from that pass-fail standard. And so, and I'm glad you asked because this is a really important distinction about the STEP program, um, other than, you know, uh apart from the equivalency determination process at NGO source, which is that we don't do kind of a yes-no on an organization. We pay place it on a tier. And so an organization is sort of tiered on its level of, and again, we try not to, we try to position this as a tier in terms of kind of its level of sophistication or risk or how an organization might fit this grantee into its overall risk profile. So an organization could be on, say, a quote unquote lower tier. So right now we have it broken into four different tiers, and those tiers are not intended to be sort of, you know, best to worst, but rather what kind of processes does an organization have in place? So a tier, you know, a tier one organization is essentially just an organization that has a basic understanding of its obligations. It doesn't, it is not, funds are not flowing to private parties, and it it has a basic understanding of the risk that it approaches, and it may have very little other kind of safeguards in place. Um, the idea is you can get in on the ground floor of this vetting process and you use the process as a means to understand how you can, you know, move up those tiers. So again, we're not saying, you know, if you are a funder, you should never fund a tier one or you should only fund a tier four. But what we are looking at is if you're a funder and you're going on to sort of our repository, you're able to glean yourself based on your own risk tolerance, um, what you know, the size of a grant you want to make, you may want to give, as well as the kind of grantee you may want to give to. And so for certain private foundation funders, for example, who may not have the same obligations or risk appetites as, you know, um SCDO or USAID, may say, we're perfectly happy with an organization that only has very basic processes in place. We're only giving them a 10K grant. We're very familiar with them and their reputation. And this gives us what we need to have the basic assurances that they have a bank account in the name of the organization and that there are some protocols in place to ensure that there will likely not be fraud. Whereas a government agency or someone giving a multimillion dollar grant may actually be looking for an organization that meets a higher tier and under that tier are able to verify, oh, great, they not only do they have audited financials, but they have these policies in place that ensure that at least two people have to find off, sign off on funds. They have a whistleblower policy, they have a clear mechanism to report abuse, we've seen their track record. So, really, the idea is that we're we're representing these organizations in a much more nuanced way so that um rather than just saying, yes, they're good to go, or no, no, they're not, and then funders themselves, we we recognize that this places potentially more of a burden on funders, but we also want it to be an opportunity to educate funders, that there is very good reason that you might, this organization may be very small and unsophisticated, but wow, they have amazing safeguarding protocols in place. And if that's your biggest concern, then you should have no problem funding them, is kind of that kind of educational piece. Really briefly, without going on too long about this, I uh, you know, TechSoup has more basic vetting procedures for any nonprofit organization around the world to gain access to this catalog of donated technology resources. And that is over a million organizations have gone through that process. It is a very basic standard of whether you're registered within your local country as a nonprofit operating for the public benefit. One of the things that we've um encountered there is, which I think answers a little bit more directly your question, is organizations that may be discriminatory or organizations that otherwise are engaging in conduct that is so deeply offensive or potentially criminal or fraudulent that even though they technically meet the standard, we don't feel that they should be on our platform, right? Now that's a relatively small number, but we have over the years built up a process for determining when and how to screen those organizations out. And that process is a multi-level standard. So for example, we have an anti-discrimination policy. Um, organizations are escalated to for review by external and internal parties. We have sort of a three-tiered review that goes through and says, you know, are they are they violating our anti-discrimination policy? Or are they violating what we refer to as our community standards policy, which again looks at a number of factors and requires really multiple people from different jurisdictions to review it and say, this conduct is so egregious that we are absolutely not comfortable keeping them on the platform. Now, that's a relatively small percentage of our um of the organizations that we serve for a couple of reasons. One is that, like I said, we really implement a practice where it has to be multiple layers of review that all agree that this is the case, right? Because we want to avoid potentially penalizing actors for having opinions that are different from our own, or actors that are maybe accused of doing something but not yet charged. So, you know, it's an imperfect system, um, but it is one that that appears to work and you know, where we place as much objectivity as as possible in the review process and ensure that it doesn't come down to say one person or or even one jurisdiction that is able to say, able to say, well, this seems awry of our own policies or processes, but really requires kind of a community review, um, using as objective of standards as possible.

SPEAKER_00 41:12

Yeah, it's it's really interesting. And yeah, I mean, I'm unsurprised to hear that it's sort of an issue that have been been dealing with. Um, because it, yeah, it just, I mean, as you say, that the gap sometimes between what is there on paper or in legislation and the reality of some of these sort of very complicated ethical questions, particularly when you're operating across multiple jurisdictions. Unsurprisingly, there's a lot of grey error and it can be very difficult to navigate. Um I I'm aware I'm in danger of taking up altogether too much of your time. So um, I just I really wanted to ask a question that kind of uh zooms out even further, I guess, to a sort of fairly fundamental theoretical point about all of this, which is we're kind of we're kind of talking about the ability of uh institutions, funders, uh, uh individual donors to some extent, I guess, as well, to give across borders and to support organizations in other countries, and presumably to do so in a way where they are able to take advantage of kind of tax incentives that are available for for giving. I I wondered what your sense was of whether there's ever a gap between the the what is allowed on paper and the fact that equivalency determinations allow you to do that and to sort of give money that is then passed on to another part of uh an organization in another part of the world and to get a tax benefit in your your home country. And the the actual um uh enthusiasm that governments have for that happening. I I only ask, because in my experience, having sort of worked in this area a little bit for a decade or so, I always felt as though that they were somewhat grudging because actually, when you think about it, the reality is that they probably don't necessarily want to make it as easy as possible for people to uh reduce the the amount of tax they're paying in that home country and thereby kind of reducing the overall tax take and the benefits accruing somewhere else. And that's understandable. Do you ever sort of feel that reluctance? And what do you think is the compelling case for governments being enthusiastic or at least kind of acknowledging the value of supporting cross-border giving?

SPEAKER_02 43:11

Yeah. And you know, it's hard to know whether the kind of lethargy is just a natural part of government bureaucracy, or if it really does have to do with, you know, not wanting to lose those tax dollars or having other fears or or or you know the complications of setting up a system like that. And you know, in in Europe, obviously there's been a call for this for so long and it hasn't come to fruition. And I and I wish I knew more about what those obstacles are all about. And and like most things, I imagine it's a combination of various factors. Um you know, I it it seems to me there are several things here that are that would just be enormously benefit, beneficial from a government perspective. And one of them is just making cross border philanthropy easier. Is, you know, theoretically, and I personally believe, um, relieves burdens on local governments for around public services and meeting the needs of, say, you know, if a great example is immigrant communities and refugees, where governments are just completely overwhelmed. And I can't even imagine if we were to pull out the kind of private actors and philanthropy from this picture, that it would be, you know, so much worse even. So I think, you know, there is a there is a lack of perhaps adequate recognition of the role that philanthropy pays and plays in solving real government public needs within their communities that I think is, you know, a larger, and obviously there are studies about this, but I think a larger quantification of of how that relieves how it relieves government burdens could be compared to kind of potential tax losses or other complications around that. I also think it fits into this larger picture of um, you know, we are just much more, and particularly since the pandemic, um, much more mobile than we've ever been in the world, right? I think people can now work from anywhere and many places. And um the flow of funds between countries for philanthropic and for, you know, commercial purposes is just not keeping up to speed with the reality of our current workforce. Um and so I think that there's a real interplay there between we need to make it easier to comply with things like tax filings, um, you know, regardless of whether there is um, you know, the the philanthropic tax incentives connected with it or not, that are just all governments are are terribly behind on. And I and I and I don't, you know, it's it's enormously complex and requires enormous amounts of coordination. I would also, I know, however, that the philanthropic sector is very eager and willing to help solve that problem, right? And I think in a lot of ways, governments, again, fall back on this fear of how philanthropy and the nonprofit sector can be misused. And I think that in a way can become a crutch for um actually solving the problem in a way that ultimately I think would actually save money and resources for governments that are trying to sort of figure this problem out. So, you know, I don't envy the governments that have to figure it out, but I also um I think, you know, I feel I feel very strongly that it is within their best interest, both from a financial perspective and obviously from their community's perspective as well.

SPEAKER_00 46:26

Yeah, I know I absolutely agree. I would I yeah, always feel as though a very large part of the the battle would be for governments just to have a clearer narrative in their own minds and that they can kind of present to the public about the role of philanthropy and the value of it, because I think without that, then it becomes very easy to to to leap to conclusions about it, you know, just being money lost that could be there in tax take and not recognizing actually the the role it is playing in strengthening communities or taking the burden off uh off the state. Um I I just wanted to to ask kind of a uh a final question, looking ahead a bit. I mean, obviously the work that you do at TechSoup has always been very much driven by using uh technology to try and kind of address uh issues and blockages within in civil society. Uh looking ahead to the future, do you see any promise in kind of newer and emerging technologies to kind of uh boost the work that you do even further? I mean, is are there you know possibilities around you using machine learning, for instance, to get kind of new insights from the data you're using or to automate processes even further or to make it easier to gather data in in the first place? Or do you think that's trying to run before we can walk?

SPEAKER_02 47:37

Yes. The short answer is yes. Um, you know, I think not surprisingly, the area where I think there's the most potential right now and where we're actually seeing a lot of momentum, it would be FinTech, right? Um, which is a which is a critical component of this. And not just blockchain, but all kinds of, you know, the kind of mobile applications and mobile banking that we're seeing prop up. I mean, it has a long way to go, but the fact that it's becoming more a part of the regular discourse and and and beginning to be accepted even by by a number of banks, I think is a really promising sign. And I would say that on the technology front, that's probably where we're seeing the biggest lag and where we'll see the most movement now that that that it's starting to kind of catch up and gain traction. In terms of other technology innovation, you know, I think that there's a big, you know, I paused because, you know, when you said is it, is it um learning to walk before we can crawl, or or the um expression that you used, it's I mean, there that that is the reality. I think that right now we're seeing a lot of nonprofits who are um still being very much left behind and civil society overall. And, you know, I shouldn't say nonprofits because I'm also thinking of activists and informal groups and again, sort of using the broader term civil society, where, you know, basic access to internet is still a problem, right? Or um I, you know, having moving their um information to the cloud is still a long way away. And yet the technology sector, the the the commercial sector is is full force ahead, right? And so the longer we allow that gap to kind of linger, then the harder it's gonna be to catch up. And so I do think that even though there's there's a lot of positive um, you know, technological innovation happening, and as I said, particularly on the fintech front, and in part because there is, there's a market there for that, right? I think that it has the sort of capitalist impetus behind it as well, um, which is a little bit less so for smaller organizations just trying to kind of reach a digital maturity of a sort. I think we've got a lot of work to do still there, which is a big part of what TechSoup is doing, just on basic technological infrastructure, access to the internet, um, access to, you know, move moving software to the cloud, um, ensuring that organizations have a basic um understanding of how to use technology and notably how to avoid fraud, right? I mean, I think the cybersecurity risks are massive. Um, and so helping organizations um combat that is is is such a is such a critical component before we can move forward on some of the bigger innovations, I think.

SPEAKER_00 50:06

Yeah, absolutely. That sounds uh exactly right to me. That that balance of not being Luddite or sort of assuming that technological processes uh progress is irrelevant to the sector, but recognising that there is a lot of work to be done in capacity building and as you say, around things like uh cybersecurity, which I do think will be a huge issue for civil society in coming years, as as everybody sort of naturally does pile into the digital space. I think if that's done at such a speed and in ways where people aren't aware of some of the the potential challenges and risks, then we will sort of see unfortunately kind of uh problems emerging. Um before I finally let you go, just wanted to say you know thanks ever so much for finding the time to come on the podcast. Uh it's been great to have the chance to to talk. And hopefully we've managed to convince everybody that uh you know equivalency determinations and uh and things like that are actually genuinely interesting and very relevant to some pretty sort of fundamental questions around you know philanthropy and the role of giving at a global level. Um, is there anything you kind of want to flag up that you've got coming up or things that you want uh to point people's uh attention towards?

SPEAKER_02 51:11

Yeah, thanks for asking. Well, you know, we are continuing to pilot forward on this program um step that is a part of NGOSource. I would um urge your listeners to check out our website, um, and I will pull the name, um, but uh specifically our our landing page for the STEP program. And the reason is that we're still doing a lot of information gathering um from local organizations to determine whether this meets their needs, as well as from funders to see whether this is something that would serve their needs and their grantees. And so even if you know someone is not interested in necessarily using the service at this point because it is at its very early stages, we are really interested in talking to anyone who cares about this issue at all. If you're a funder who is concerned, if you're an organization who feels that you have been excluded from the funding path, we are we are seeking your opinions and and hoping to serve you in particular. Um, so I would encourage uh listeners to go to step.techSoup.org. That's s-t-e-p.t-e-c-h-s-o-up.org. Um, and you'll see there a little bit about our program as well as opportunities to engage with us because we are conducting a number of interviews to make sure that the standard is really fit for purpose and that we're hearing from all kinds of actors in the field to make sure that the standard can really be as globally accessible as possible. So um that would be my big ask. We want to hear from you. And even if it's a complaint, um we want to try to meet that. And so um would love to hear from anyone who hears this.

SPEAKER_00 52:38

Great. And I'll yeah, I'll make sure to put link to that in the show notes so people can access that easily. Um well, thanks ever so much again, Martha, for coming on the podcast. Uh, and you know, hopefully I can convince you to come back on uh at some point in the future and we can kind of catch up on how your work's going.

SPEAKER_02 52:53

What a privilege that would be. Thank you so much for having me.

SPEAKER_00 53:04

Okay, great. Well, my thanks again to you, Martha, for finding the time to come on the podcast. It was great to connect with her and have a chance to talk. And as ever, I'll put links in the show notes to uh relevant things that we discussed where you can find more information on Martha's work and any things that I can think of that I've uh written or said that might be of interest and relevance. Uh if you want to check out more writing, talking, audio, video, uh, and whatever about philanthropy and civil society issues, do check out uh my website at www.yphilanthropymatters.com. Uh if you want uh more bite size and slightly more name stuff, do follow me on Twitter at Rodery underscore H underscore Davis or at for literacy if you want more of the sort of uh uh historical stuff. Uh if you like this podcast and you want to leave us a review on iTunes or any other platform where you get your podcasts, please do. That'll be very helpful. Uh and the other thing you can do is just spread the word. You know, tell anybody um that you think might be interested in particular episodes or in the podcast in general about it, and uh kind of share the love. Uh other than that, I will see you next time. Bye.