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4 Questions You Should Consider Before Giving Internationally

March 08, 2019

512x512bbWhether 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 an article, or maybe just feel a kinship with a special place, the desire to help others 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 outside the U.S. can be daunting. Luckily, there are lots of resources that can help you achieve what you hope to with your generosity.

Whether you're considering a one-time donation or providing sustained support to a charity somewhere else in the world, there are a few things you should consider before taking the plunge.

1. 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 align with your giving goals. A quick glance at most charities' websites will give you a good idea about the impact the charity has had in the past and how it is working toward its mission today.

This kind of research sometimes can be more challenging than a simple Web search. Some foreign organizations have a great online presence with lots of good information translated into English. When this is not the case, donors have some options:

There are a number of 501(c)(3) organizations that facilitate international grantmaking and also provide extensive databases of organizations eligible to receive funding (the CAF America Global Database is one).

Some countries also maintain national registries of charities. The UK Charity Commission and Canadian Revenue Agency List of Charities are both good country-specific resources.

2. 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 oversight by both the U.S. and foreign governments, which makes cross-border giving more complex than simply writing a check and dropping it in the mail. In many cases, there's a complicated matrix of regulations related to money laundering, terrorism, and organized crime that donors are required to follow.

While you might think most of these regulations apply to entities on the receiving end of a charitable contribution, they impact the donor — whether it's an individual, corporation, or nonprofit organization. The bottom line? If you're initiating the financial transaction, you are responsible for making sure the funds are used appropriately. This might seem like a bridge too far, but working with an intermediary or other U.S. public charity can take the guesswork out of it. An experienced intermediary organization will be able to conduct the necessary due diligence and protect a donor's reputation, ensure regulatory compliance, and eliminate any risks.

3. Are there tax benefits to giving abroad? When you're looking to support a charity that impressed you with their work on, say, ocean conservancy, getting a tax break is probably the last thing on your mind. But it's not nothing and it's not a bad thing to keep in mind, because being able to claim a deduction for your gift means you'll have more funds available to donate to other causes.

Not all charitable donations are tax deductible, and in fact donations made directly to charitable organizations outside the U.S. do not qualify. That said, there are several ways to receive a tax deduction while supporting charitable work overseas. For example, you can opt to support a U.S. charity that operates programs abroad. Or, if you prefer that your donation go directly to a foreign charity, you can opt to make your gift through a U.S. intermediary organization. Intermediary organizations are U.S. public charities that often assume the risks inherent in making donations to organizations outside the U.S. and make it possible for the donor to receive a tax receipt at the time of their donation. The donation is made to the intermediary, but you'll be able to recommend which foreign charity is supported by your gift.

Donors should check how the intermediary organization they choose to work through operates, as there are differences among intermediaries with respect to the amount of due diligence performed, fees charged, etc.

4. What impact would you like to make with your donation? Whether you'd like to effect change over the long term by paying for a child's education or would like to help in a more immediate way by supporting a community after a disaster, it's important to be clear about your expectations. Clarity about what you'd like to accomplish with your donation is key to establishing reasonable expectations that both you and the charity in question are comfortable with.

Giving outside the U.S. is complicated, but there are a number of organizations that specialize in cross-border giving and have made it relatively simple for Americans to support charitable causes in nearly any country. With the assurances provided by a comprehensive due diligence process and some patience, giving internationally can be a fulfilling experience. By being realistic about the needs on the ground and your own good intentions, anyone can take advantage of the capacity and efforts of charities around the world to do good.

Headshot_ted_hartTed Hart (@cafamerica), ACFRE, CAP®, is the president and CEO of CAF America and has over thirty years' experience in global philanthropy. He is also the editor of Cross-Border Giving: A Legal and Practical Guide, Workbook Edition (Charity Channel Press, 2019).

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