Monday, October 10, 2005

Gifts to Foreign Charities

If you would like an income tax deduction for gifts for use abroad, generally gifts cannot be made to organizations organized in a foreign country. Listed below are some general planning arrangements that allow for making tax-deductible gifts that are directed for use abroad:

-gifts to organizations organized in certain countries with tax treaties allowing for the deduction (e.g., Israel, Canada, Mexico)

-gifts to domestic "friends of" organizations that provide financial support to foreign charities (so long as such organizations are not obligated to transfer gifts to a foreign organization)

-gifts to a "donor advised fund" that makes international grants

-gifts through U.S. private foundations that meet specific expenditure rules for grants to foreign organizations

-gifts to domestic organizations that directly expend funds abroad in furtherance of their exempt purpose.

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