4 Ways to donate to foreign charities and receive a U.S. tax benefit
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This blog post was originally published on April 27, 2021. It was updated on February 14, 2025.
Giving to causes abroad can be incredibly rewarding, but understanding the tax implications and confirming compliance with tax regulations can be tricky. While donations to foreign charities usually aren’t tax-deductible in the U.S., there are strategic ways to support international organizations while still maximizing your tax benefits. In this post, we’ll explore how you can give globally without missing out on potential deductions.
In general, individuals who itemize deductions on Schedule A of their Federal tax return (Form 1040) are allowed a deduction for charitable contributions made to organizations which are tax exempt under Internal Revenue Code Section 501(c)(3), commonly referred to as nonprofit organizations. U.S. tax law only allows deductions for organizations that are created or organized in the United States, or any possession thereof.
However, there are ways to support foreign charitable activities and still receive a tax benefit.
- U.S. Organizations – The first way is to give to U.S. non-profit organizations that do direct work in foreign countries. For example, donating to the American Red Cross to help recovery efforts from a hurricane in a foreign country or giving to Doctors Without Borders, which conducts direct outreach in foreign countries.
- “Friends of” Organization – Another way is to donate to a “Friends of” organization. These are U.S. nonprofit organizations whose primary purpose is to support a specific foreign charitable organization. They are formed as U.S. charities and follow U.S. guidelines. The money donated to these organizations is used primarily to support the named foreign charity. Funds that are contributed to the U.S. charity are used to support the organization’s work and missions in their home country.
- Private Foundations – Private foundations can make donations to foreign charities if they follow very specific rules. Keep in mind the tax deduction for contributions to private foundations is limited to only 30% of an individual’s adjusted gross income. Donations to public charities are currently limited to 60% of an individual’s adjusted gross income.
- Donor-Advised Funds – You may also be able to make a contribution to a foreign charity through a donor-advised fund (DAF). A DAF typically refers to a fund or account run by a 501(c)(3) organization (i.e., “sponsoring organization”). Similar to private foundations, the donor-advised fund must follow special procedures before it can transfer funds to a foreign charity. Some DAFs will not make donations to foreign charities because of these requirements. Consult with the sponsoring organization to determine if using a DAF may be an option for contributing to the foreign charity you wish to support.
As well-intended and generous as an individual may be, U.S. tax law limits charitable deductions to donations to U.S. charitable organizations, which means any individual U.S. taxpayer who wishes to give to a foreign charitable organization must plan the transfer correctly. Contact a Kaufman Rossin tax professional today to discuss your potential giving so we can help you structure your contributions in a way that is both tax beneficial and supportive of the charities and causes that are far away, but close to your heart.
Heidi Suarez, CPA, Estate & Trust Director at Kaufman Rossin, one of the Top 50 CPA and advisory firms in the U.S.
Starting a nonprofit animal rescue in Colombia. What options do I have to claim tax deductions on expenses?
Thank you for your comment, and congratulations on starting your animal rescue in Colombia! Generally, U.S. donors can’t deduct gifts made directly to a foreign organization. The most common way to create deductibility is forming a U.S. 501(c)(3) — often a “Friends of” organization that supports the foreign rescue — though contributing through an existing U.S. charity or a donor-advised fund may also be options.
Since the right structure depends on your specific facts, we’d recommend a conversation early on. Our Nonprofit Tax team would be glad to help you evaluate your options.
I am searching out the best way to establish my organization as a non profit organization. It seems that I need establishment as a foundation, but I am not sure. It is my desire to assist ministries in other countries, and this is but a humble beginning; however, I want to ensure my filing is correct. Please advise and thank you kindly in advance.
Thank you for your comment! Assisting ministries abroad is a great goal. To establish a U.S. nonprofit, you’ll typically form a 501(c)(3) as either a public charity or private foundation, each with specific rules for international work and tax benefits. A “Friends of” organization is often a good path for supporting overseas efforts while staying compliant with IRS regulations. Since setting this up involves several steps and added complexity, we recommend consulting a tax or legal advisor to ensure everything is handled correctly. Our Nonprofit Tax team is here if you need guidance!
I would like to donate to support my nonprofit organization in Nigeria which provides school meals and supplies for children and economic empowerment for widows and indigent women in a particular community. Should my domestic be structured as a ” friends of ” ? I read that it is an onerous designation.
Thank you for your question. Establishing a U.S. “Friends of” organization can indeed allow donors to receive tax-deductible benefits; however, it is important to note that the formation and ongoing compliance requirements can be relatively complex, as the entity must function as an independent 501(c)(3) organization. Additionally, facilitating contributions to a foreign organization involves nuanced tax and legal considerations, and a careful review of the specific facts is necessary to determine the appropriate approach.
Depending on your objectives, there may be more streamlined alternatives—for example, contributing through an existing U.S. charity engaged in similar work or utilizing a donor-advised fund structure.
If you would like assistance in evaluating your options and identifying the most appropriate structure for supporting your nonprofit in Nigeria, our Nonprofit Tax team would be pleased to advise you.
There is an agreement between USA and Mexico for donations to public charities. However IRS considers “To deduct your contribution to a Mexican charity, you must have income from sources in Mexico.”What does it mean? does it imply that the business or individual based in USA must have also incomes from Mexico? must that person/business needs to be taxpayer in Mexico? but if it is taxpayer in Mexico the Mexican charity could address just to his/hers/its Mexican office for the request, without even dealing with American IRS. Thank you.
Thank you for your inquiry, Cesar! These matters are rather nuanced, especially when considering tax regulations in various countries. We recommend filling out a Contact Us form on our website, and one of our professionals will be in contact to discuss your individual situation.
I have a nonprofit in England that I would like to make a US tax deductible contribution to. Is this something you can help with? They are
https://www.sacredspace.org.uk/
Thank you for your inquiry, Thomas! Our multi-disciplinary team has provided professional services to public charities and private foundations for decades. Please fill out the “Contact Us” form on this page and one of our team members will be in contact to discuss your specific needs.
As a U.S. Citizen filing my tax return with the IRS, can I receive a tax deduction for donations to any Mexican Foundation. If so, what type of receipt do I need? What type of deduction will I receive on my taxes? Are any types of Foundations not allowed for a deduction? Thank you in advance for your reply.
A U.S. taxpayer is not allowed a charitable deduction for contributions given directly to a foreign charity.
If the Mexican charity has a “friends of” organization that is organized as a US tax exempt organization to support the foreign entity, then you may be allowed a deduction for contributions given to the U.S. tax exempt organization. You must keep a copy of the check or transfer receipt in addition to the letter the organization should provide you documenting the contribution and their status as a U.S. tax exempt organization (501(c)(3)).
For 2021 there is an automatic $300 deduction (for single taxpayers) or $600 (for married filing jointly taxpayers) for cash contributions given to public charities if you are not able to itemized your deductions.
In order to itemize your deductions you would need to have total deductible medical expenses, taxes, charitable contributions, etc. greater than the standard deduction ($12,550 for single filers and $25,100 for married couples filing jointly).
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