Private foundations may give to non-U.S. (foreign) organizations for charitable purposes. Your foundation has a choice of either making anequivalency determination or practicing expenditure responsibility. A grantor may find one easier than the other, depending on the circumstance. Generally, it is easier to simply practice expenditure responsibility. However, if you are making several grants to the same organization, it may be better to use the equivalency determination, as it can be difficult to monitor the regular reporting internationally.
To practice expenditure responsibility, see our Tax & Legal FAQs on expenditure responsibility.
Alternatively, you can engage in equivalency determinations to make such grants, in which your foundation makes a good-faith determination that the recipient organization is the equivalent of a U.S. public charity. This determination can be based on either an affidavit from the recipient organization or on an opinion of counsel. The affidavit or opinion, as the case may be, must set forth sufficient facts concerning the recipient organization’s operation and support to enable the IRS to determine that it would likely qualify as a public charity.
Read the Exponent Philanthropy primer International Grantmaking: Opportunities for Small Foundations.
Exponent Philanthropy members: see additional resources on our International Grantmaking page.