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On Philanthropy: Thinking of giving to an international charity? New IRS regulations clarify requirements

Bruce DeBoskey, Tribune News Service on

Published in Home and Consumer News

Around the globe, many remarkable organizations work to help people at the very bottom of the economic, judicial and environmental pyramids. Each year, U.S. donors contribute billions of dollars to advance causes in other parts of the world -- especially when these people and causes appear in the headlines.

Philanthropist Warren Buffett sums it up concisely: "If you're in the luckiest 1 percent of humanity, you owe it to the rest of humanity to think about the other 99 percent."

International donors include individuals, families, corporations, foundations and donor-advised funds. The reasons that they donate are simple: the global needs are enormous and a donated dollar usually goes much further overseas than it does domestically. Many donors look overseas to see where their philanthropy can have the greatest impact and help repair the world.

International giving is important but not necessarily preferable to giving locally. There is much to be said for addressing issues like hunger, education, housing, disaster relief and environmental protection in our own communities before we look abroad. However, for a variety of good reasons, many donors also look overseas to help others. In an ideal situation, donors with sufficient capacity can do both.

But giving internationally is not the same as giving domestically. Because it is governed by a complex set of U.S. government rules and regulations, certain types of international giving should be undertaken only after consultation with legal and tax experts.

U.S. donors can make tax-deductible donations to fund charitable work in other countries in four principal ways:

-- Donate to U.S. 501(c)(3) nonprofits that work overseas or support international organizations.

Many U.S.-approved 501(c)(3) organizations were formed specifically to advance charitable work internationally. Examples include UNICEF USA, Project CURE, Global Greengrants Fund, Against Malaria Foundation, Africa School Assistance Project, Friendship Bridge -- and thousands more.

Other organizations set up IRS-approved "Friends of" or "American Committee for" 501(c)(3)s that raise tax-deductible donations in the United States for distribution to a specific nonprofit organization working overseas. One example is the American Committee for the Weizmann Institute of Science.

By donating directly to U.S.-approved nonprofits, donors avoid the complicated legal or tax hurdles required for donations made directly to organizations overseas.

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