No Good Deed Goes Unpunished

US Charitable Organizations Operating and Supporting Foreign Activities

Kent Seton - Wednesday, December 12, 2012

The issue of US Charities supporting activities that further the charitable purposes of the US Charity is quite a complex topic and one that must be carefully tread to not violate the many rules and regulations in this area. Suffice is to say, that while this blog entry is not a comprehensive treatise on the matter, it is mean to discuss a few important concerns. First, one must be aware that simply setting up a charitable conduit (or charitable arm) in the US to support a single foreign based charity is not lawful per Revenue Ruling 63-252. Furthermore, making grants to to specific projects abroad and/ or to specific organizations will not be allowed unless there is sufficient control and oversight over the disbursement of funds. That being said, while ,there are many more rules and complexities to these matters, the idea of providing charitable work in a foreign country by a US Charity through the hands of those hired and engaged as volunteers of the US Charity is entirely within the law.  In addition, before engaging in any foreign activities, one would be well advised to look at The Office of Foreign Assets Control (OFAC) as this deals with countries that you are legally allowed to interact and deal with and who you cannot. Again, you can see that those organizations "doing things" abroad should seek wise legal counsel prior to engagement. In addition, you are highly recommended to review Revenue Ruling 66-79 which deals in even more detail with the guidelines of the IRS as it relates to these types of activities.

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