4 Questions you Should Consider Before Giving Abroad
Tags: impact, Giving Abroad, Donate, 501(c)(3), Rules, Tax Benefits
Whether you’ve traveled to distant parts of the world and were inspired by the inventiveness of the communities you visited, read about an issue in a news article, or maybe just feel a special kinship with a given place, the desire to help somehow can quickly move to the top of your priority list. Supporting the efforts of nonprofits working on issues you most care about is a great way to take action. But giving across the world can also be daunting. Luckily there are lots of resources to help make sure you’re achieving what you want with your generosity.
Regardless of whether you’re considering a one-time donation or sustained support to a charity across the world, there are a few questions you should consider before giving abroad:
Where would you like to donate?
There are plenty of issues around the world that could use, and are deserving of, your help. But which of those do you feel passionately about? Rainforest conservation in Brazil? Great! Schools for girls in Kenya? Fantastic! The first step is narrowing it down.
Do some research to find out which charities might align with your giving goals. A quick glance at most charities’ websites will tell you the impact the charity has had in the past and how it is working toward its mission today.
This research can sometimes be more challenging than a simple web search. Some foreign organizations have a great online presence with translations into English and clear information. However, this is not always the case. In these instances donors can rely on a few resources:
- There are a number of 501(c)(3) organizations that facilitate international grantmaking and who provide extensive databases of organizations eligible to receive funding through them (see, for example, the CAF America Database).
- Some countries have national registries of charities such as the UK Charity Commission and the CRA List of Charities in Canada that can serve as good country-specific resources.
How do you make sure you’re not breaking any rules?
As you might imagine, giving to charity across borders⎯like any financial transaction⎯is subject to specific regulation and oversight from the US and foreign governments, which makes cross-border giving more complex than simply writing a check and dropping it in the mail. There is a complicated matrix of regulations that donors are required to follow. These regulations are designed to defend people and organizations who donate against money laundering, terrorism and organized crime.
While you might think most of these regulations exist on the receiving end of charitable contributions, these responsibilities impact the donor—whether an individual, a corporation or an organization. The bottom line is that if you are initiating the financial transaction, you are responsible for making sure that funds are used appropriately. This seems intimidating, but working with an intermediary grantmaker or another US public charity can take the guesswork out of following the rules. An experienced intermediary organization can conduct the necessary due diligence and protect the donors reputations, ensure regulatory compliance and eliminate possible risks.
Are there tax benefits to giving abroad?
When you’re passionately looking for a solution to support the charity that impressed you with their work on ocean conservancy, getting a tax break is probably the last thing on your mind. But it is not a bad thing to consider, because a tax deduction ultimately means that more funds are available to donate and more good can be done.
Not all charitable donations are tax-deductible, and in fact donations made directly to charitable organizations outside of the US do not qualify. That said, there are several US charities that can allow you to receive a tax deduction while supporting charitable work overseas. For example, you can opt to support the international projects of US charities that run programs abroad. If you would prefer that your donation be directed to the foreign charity, you can opt to make your gift through a US intermediary organization. Intermediary organizations are US public charities that often assume the inherent risks in making donations to organizations outside of the US and allow the donor to receive a tax receipt at the time of their donation. Your gift is to the intermediary; however, you will be able to recommend a specific foreign charity to be supported with your donation.
- Donors should check how the specific intermediary organization they choose to work with operates, as there will be differences among them regarding the due diligence they perform, the fees they charge, etc.
What impact would you like to make with this donation?
Whether you’d like to effect change with a long-term impact like paying for a child’s education or in a more immediate way like supporting a community after a disaster, it is important to think about your expectations at the outset. Clarity about what you’d like to accomplish with your donation helps set expectations between you and the charity.
Giving outside of the US is complicated, but luckily there are a number of organizations that specialize in cross-border giving, making it accessible for Americans to support charitable causes in nearly any country. With the assurances of a comprehensive due diligence and foresight, giving internationally can be a fulfilling experience. By considering the needs on the ground and the goals of your own good intentions, you can take full advantage of the immense capacity to do good provided by charities around the world.
Interested to learn more about supporting causes abroad? We recommend checking out our book, Cross-Border Giving: A Legal and Practical Guide, Workbook Edition (Charity Channel Press, 2019)