Clients have asked me how they could make charitable donations to good causes abroad. Some have discovered schools or clinics or other great organizations while traveling and would like to make tax deductible donations. There are a number of ways to give and make a meaningful difference.
To relieve hunger, support women, help after natural disasters, contribute to development, or support any other general category of need, consider donating to a US charity that provides aid internationally. Such organizations are recognized as 501(c)(3) organizations and donations are tax deductible. Among these are Oxfam America (www.oxfamamerica.org), Global Fund for Women (www.globalfundforwomen.org), The Global Exchange (www.globalexchange.org), International Development Exchange (www.idex.org), Development Gap (www.developmentgap.org), Funding Exchange National Grants Program (fex.org), American Red Cross (www.redcross.org) and Grassroots International (grassrootsonline.org).
For charitable deduction planning at this time without having a particular charity in mind, domestically or internationally, a donor advised fund may be the solution. Assets can be set aside in a donor advised fund for a charitable deduction. A donor advised fund through a national charitable fund, such as Schwab Charitable (www.schwabcharitable.org) or the Calvert Foundation (www.calvertfoundation.org) permits selection of a charity, domestic or international, at a future time. Most donor advised funds require a minimum contribution of $5,000.
Charitable beneficiaries for funds held in the donor advised fund can be identified in two ways. Either find a US based charity that provides services abroad, such as Doctors Without Borders (www.doctorswithoutborders.org), which provides emergency medical services abroad, the American India Foundation (aif.org), which works on social and economic change in India, or the Grameen Foundation USA (www.grameenfoundation.org), which gives micro loans in many countries. Or, use an intermediary organization that provides tools to search for legitimate and effective charities in other countries for a small fee. Among such organizations are Give to Asia (www.give2asia.org), which supports a variety of causes throughout Asia, or Rockefeller Philanthropy Advisers (www.rockpa.org) that works in remote areas of the world. These organization’s websites are impressive planning tools and worth checking out.
Anyone who wishes to set up a new charitable organization that qualifies for 501(c)(3) status and operates abroad needs to consult with an attorney with experience in establishing nonprofit organizations. The US tax policy that underlies the IRS recognition of domestic charities is based on the idea that lost tax revenues are balanced by reduced demands on government funds by social programs that benefit from those charitable donations. Gifts and donations to support foreign charitable organizations or international organizations, on the other hand, don’t have that impact within the United States, and the income tax deduction is more difficult to get. Non-profit law can be confusing and the attorney can navigate you through tax treaties and Treasury regulations.
In summary, there are ample choices for general gifts to international causes through established US charities, there is the option of making targeted grants with the help of planning tools offered by intermediary organizations, and there is the option of establishing a new charity with the advice of an attorney.