There are so many great causes private foundations want to support, and with such a globalized society, those causes are often based in international territories. Though a bit trickier than giving grants to a domestic organization, there are luckily still ways to contribute to international efforts.
Take, for instance, the hypothetical private foundation JiJi for a Better World. They are looking for new opportunities to give and they think they have found a great option, there is just one issue: JiJi for a Better World wants to support an organization that is foreign called Kitties Incorporated. JiJi believes that the cause and mission statement of Kitties Incorporated align with the core beliefs of their foundation. Unfortunately, foreign corporations cannot be confirmed as public charities by the IRS. Fortunately for JiJi for a Better World, there are multiple alternate methods for making this charitable donation a possibility.
In the past, attorneys could prove an international organization qualified to receive contributions as a public charity under IRS regulations for a specified time period. Tax reform now allows Certified Public Accountants and Enrolled Agents to do the same.
Another viable option for JiJi for a Better World is to donate to a non-profit that is a “friends of” organization. For example, the organization can donate to another non-profit that works directly with Kitties Inc., such as “Friends of Kitties Inc.” These types of organizations work side by side with the target foreign charity to support its mission. Another viable option is if Kitties Inc. has a subsidiary that has a U.S. domestic base of operation such as US Kitties Inc. They would have a direct relation to the official Kitties Inc. and thus be a channel JiJi for a Better World could utilize. Both of these options are supported under IRS legislation and can easily be a donation-ready option for JiJi for a Better World. These methods would be a donatable option for JiJi for a Better World without the tax liability risks associated with giving grants directly to a non-public charity. The organizations themselves bear the responsibilities, regulations, and risks of sending the donations to the main foreign organization.
This is great news for JiJi for a Better World and also for you! With multiple safe and effective options available to private foundations, there are many opportunities to donate outside traditional domestic channels. Hopefully, you will not feel limited in your generous philanthropic expenditures to better the world.
If you would like more information on this topic or others, or to look at potential international charities you would like to make grants to, please do not hesitate to contact our office at (858) 558-9200.