NPOs are attractive partners because of their structure, expertise, outreach and implementation capacity. Given the wide variety and numbers of NPOs, it is important to assess whether an NPO partner is reliable or not. There are millions of NPOs in Europe for only over 60,000 public benefit foundations [1]
The database “Giving in Europe” developed by the King Baudouin Foundation provides an overview of the non-profit sector in Europe (see section “Beneficiaries across Europe) and short country profiles that describe the operating environment for NPOs and provide links to national databases with potential beneficiaries.
Foundations need to examine various factors before engaging in cooperation with an NPO. Some relate to the nature of the organisation, others to the nature of the activities in which in the NPO is involved.
One prerequisite in particular as far as grantmaking is concerned can be to check if the NPOS would qualify as a “public benefit” / public good / charitable NPO. Some tax regimes in Europe prevent public benefit foundations from funding commercial organisations, or commercial projects undertaken by NPOs, which would jeopardise the tax status of the public benefit foundation.
The EFC provides information on the legal and tax regimes governing foundations in the EU.
The European Centre for Not-for-profit Law produces similar information on other non-profit organisations (associations, charities etc.).
Restrictions can also be found as to the type of activities: e.g. political activities or political affiliations of the NPOs.
Other factors to consider in partnering with an NPO will include its governance, resources, staffing, standards, track-record, and impact. Foundations should be careful in their assessment of the NPOs’ performance: which should be determined and interpreted within the particular context of the NPO, its environment and the constituencies the NPO aims to serve.
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[1] Source: EFC Research Task Force Survey on the Dimensions of the Foundation Sector in the EU 2004.