The Nonprofit FAQ

Can a non-US organization receive tax deductible donations?

An email inquiry on October 2, 2003, conveyed this question: From a Turks and Caicos (TCI) Non Profit Org. formation Attorney. How does the a Turks and Caicos Non Profit Org. become "recognized" in the U.S. and accept charitable contributions/donations, which U.S. companies/U.S. individuals could deduct from their taxes? Putnam Barber replied: The first page of IRS Pub 526 (see http://www.irs.gov/pub/irs-pdf/p526.pdf) declares that contributions to organizations outside the United States are not deductible by US taxpayers (with limited exceptions in Canada, Mexico and Israel). There are support organizations that have been set up in the US to collect and distribute donations that benefit organizations overseas. The US organization must have an exempt purpose that qualifies under US law and operate independently, making its own decisions about what to support, when, and for how much. Information on creating a US exempt organization (a "charity") is found in the "Start Up" section at http://www.nonprofits.org/npofaq and in many other sources. See also http://www.nonprofits.org/npofaq/11/03.html Created 10/2/03 -- PB