Working Internationally

6 Questions to Help Choose the Right Conduit Organization

"Port for Water Pipe" by ikhlasulamalThe sole purpose of my previous piece, Defining a Conduit Organization, was to address the more important question of this post, “How to Choose the Right Conduit?”

After all, for many organizations operating outside the United States, specifically those in Israel, fundraising in America plays a vital role in the business strategy of the nonprofit.  Some charities choose to establish an organization known as an “American Friends of” charity to offer American donors a tax-deductible option. Others, however, will decide to use Conduit Organizations to process the donations on their behalf — also a valid option.  But I digress. (If you, on the other hand, would like to digress, see 4 Reasons Why NOT to Establish an “American Friends of” Organization.)

Those Israeli nonprofits that choose the second option of a Conduit (also referred to as an Intermediary or Fiscal Agent) are in luck, as recent years have seen an quasi-explosion in the number of American charities that offer Conduit services.  This being the case, foreign organizations have the luxury and liberty — and some might argue the responsibility and obligation — to investigate the various Intermediaries so as to choose the best fit for the nonprofit. And, yes, all Conduits are by no means the same.  Read more…

6 Reasons “Friends of” Organizations Should Bank Abroad

LEGO Globe Europe Africa by AmazingBrickCreations.comThe fiscal responsibilities of an American charity have become more complicated in recent years. Increased scrutiny from the IRS, more intricate tax documentation, the recent economic crisis, and donors’ need for transparency, are just a few of the challenges facing the sector. When a charity operates internationally these difficulties are only exacerbated. These global organizations are expected to be familiar with regional and global charity regulations, comfortable working in foreign languages and cultures, able to cope with inherent increased expenses, and capable of forging new relationships – all while maintaining a high level of accountability.

A powerful tool in helping a “Friends of” organization cope is an additional account abroad in the country in which it operates. When used to its potential, this kind of account is invaluable.  Read more…

MANDATORY Compliance with the I.R.S.’ VOLUNTARY Best Practices

"Rise Above" by KaleCraneA charitable foundation’s worst fear is that its grant will be used for non-charitable purposes. The U.S. Internal Revenue Service (IRS) stresses that this risk increases drastically when dealing with foreign grant making and expenditures.[1] The U.S. Department of the Treasury released its third and final version of its “Anti-Terrorist Financing Guidelines: Voluntary Best Practices for U.S. Based Charities” (VBP) in September of 2006 to help charities implement procedures that will reduce the risk of unintended diversions of funds to terrorist causes.  Read more…

Insight Not Accuracy: Why the New York Times is Important

"Magnifying Glass" by deejaynyeA recent New York Times’ article attacked American charities that help build communities in  Israel’s West Bank and IRS policy that enables donations to these organizations to be tax-deductable.  As with any piece about the Palestinian-Israeli conflict, many people have been quick to attack or defend the veracity of the article.

To nonprofit organizations, the value of the article is not the accuracy of the authors’ claims, but rather the article’s insight into current concerns and trends influencing the nonprofit sector.  These can serve as warnings and guidelines to US charities that operate internationally.  Read more…

Homeland Security Scrutenizing New Nonprofits

You Are Not Allowed To Take Photos Here!! by TroyHoldenAnd the hits just keep on coming…

Nonprofit organizations have yet another hurdle to cross when applying for tax-exempt status.

A while back, a colleague of mine, a director of a nonprofit organization, applied for tax-exempt status in the United States. The IRS had questions for him, which was to be expected. What was not expected, however, was that after answering the IRS’ questions, his file was then forwarded to the Department of Homeland Security [DHS].

That’s right, the U.S. Government Department that oversees (no pun intended) counter-terrorism, border security, disaster response, and immigration is also an integral part of the tax-exempt approval process.  Read more…

Print Friendly

Leave a Reply