Giving back feels good — and giving globally can feel even better. Whether it’s supporting disaster relief efforts, funding education abroad, or contributing to healthcare initiatives in underserved regions, many generous donors want their dollars to make an impact beyond U.S. borders. But here’s the catch: while your heart may be in the right place, the IRS might not be as supportive if your gift goes directly overseas.
The Tax Deduction Myth: Not All Charities Qualify
One of the most common misunderstandings when it comes to charitable giving is assuming that all donations are tax-deductible. Although certain tax treaties may provide exceptions, U.S. taxpayers generally cannot claim an income tax deduction for donations made directly to foreign charitable organizations. The same rule applies to domestic organizations that simply serve as intermediaries for foreign charities without maintaining control over how the funds are used.
Individuals who seek to take full advantage of their charitable deduction must itemize their deductions for the year in which they made the charitable contribution on their federal income tax returns. Under the Internal Revenue Code, contributions to qualifying organizations — including public charities and certain private foundations — are generally deductible up to 50% of the donor’s adjusted gross income (AGI) for that tax year.
Under I.R.C. § 170(c)(2), a charitable contribution for U.S. income tax purposes generally refers to a gift made to, or for the benefit of, a qualifying organization — such as a corporation, trust, fund, or foundation — that meets the following criteria:
- Formed or organized within the United States or its territories;
- Operated exclusively for religious, charitable, scientific, literary, or educational purposes, or to promote national or international sports competition, or to prevent cruelty to children or animals;
- Does not allow any part of its net earnings to benefit private individuals or shareholders;
- Is not disqualified from tax-exempt status under Section 501(c)(3) due to lobbying activities or political campaign involvement.
So, where does that leave your plans to engage in global philanthropy? Fortunately, “no deduction” doesn’t have to mean “no support.” With the right approach, it’s possible to align your global giving with smart tax planning.
How to Support Causes Abroad (and Stay Tax-Savvy)
Because U.S. tax law requires that a qualifying charitable organization be created or organized within the United States, donations made directly to foreign charities generally do not qualify for an income tax deduction. However, the Internal Revenue Code notably does not require that the donated funds be used for charitable purposes within the U.S. As a result, there are planning strategies available for individuals who wish to support international causes while still preserving the ability to deduct their contributions on their U.S. tax returns. If you’re looking to make a difference internationally and preserve your tax benefits, here are the main paths available:
Give Through U.S. Charities Working Overseas
Many U.S.-based nonprofits conduct projects abroad — think of organizations like the American Red Cross or Doctors Without Borders. Donations to these qualified U.S. charities remain deductible, even if the funds are used internationally.
Consider a “Friends of” Organization
Some foreign charities are supported by U.S.-based “Friends of” groups. These nonprofits are formed in the U.S. specifically to raise funds for a particular foreign entity while meeting IRS requirements. Contributing to these organizations can allow you to support your cause and receive the deduction.
It is important to keep in mind that these “Friends of” organizations must retain full ownership and control over the donated funds. They cannot be legally obligated to transfer those funds to the foreign organization they support. This structure ensures compliance with IRS requirements and avoids the risk of the organization being treated as a mere pass-through, which would disqualify the donation from being tax-deductible.
Given the importance of discretion and control by the domestic Friends Of organization, the majority of the board of directors of the Friends Of organization should be independent of the foreign charity.
Private Foundations (with Caution)
If you have a private foundation, it is possible to make grants to foreign charities — but strict rules apply. Documentation, due diligence, and sometimes IRS approvals are required. Additionally, deductions for gifts to private foundations are generally capped at 30% of your adjusted gross income (AGI) (versus 60% AGI for gifts to public charities).
Donor-Advised Funds (DAFs)
Some DAFs offer the option to recommend grants to foreign organizations — though not all do, due to the compliance work involved. If the foreign charity is recognized by the IRS, grants can be made easily. Otherwise, the DAF must either: Exercise expenditure responsibility (track how funds are used), or obtain a good faith equivalency determination (confirm the foreign charity meets U.S. standards).
If your chosen DAF supports international giving, this can be a flexible way to contribute while preserving your deduction.
The Bottom Line: Giving Globally Requires Planning
As rewarding as global giving can be, it’s important to plan carefully. Without the right structure, you may lose out on valuable tax benefits — or worse, make a gift that doesn’t reach the cause as intended.
If you’re thinking about supporting a charity abroad or already do so, this is the perfect time to review your approach. A little planning now can help ensure your philanthropic legacy has the greatest possible impact, both for the causes you care about and your financial well-being.
