Donors with international interests inevitably come up against a rule that dates back to 1938, which allows a charitable income tax deduction only for a contribution to a charity organized under the laws of the United States or any state or any possession of the U.S. As a result, individuals cannot claim charitable deductions for gifts to charities organized under the laws of other countries and so will look for ways to meet those interests through U.S. charities.
One way individuals may support international programs while claiming an income tax deduction is to identify a U.S. charity carrying out programs overseas. Another way is to support a public charity that makes grants to foreign organizations. This column will examine foreign grantmaking by U.S. public charities.
U.S. charities may easily approve grants that benefit foreign programs if made to a U.S. organization working abroad, to a foreign organization approved by the Internal Revenue Service, or to a so-called “friends of” organization established to support the mission of a foreign charity.
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This material was developed for the use of professionals by The New York Community Trust. It is published with the understanding that neither the publisher nor the author is engaged in rendering legal, accounting, or other professional advice. If legal advice or other expert assistance is required, you should speak to your own tax or other legal or accounting advisor.