A 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. 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.
A 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.
Nonprofit organizations have yet another hurdle to cross when applying for tax-exempt status. The Department of Homeland Security — the U.S. Government Department that oversees counter-terrorism, border security, disaster response, and immigration — is also an integral part of the tax-exempt approval process.
A list of great articles I’ve read and posted to Twitter between May 23 – June 5, 2010. This week’s topics include: I.R.S.; Sector Trends; Social Media & Internet; Finance & Economy; and Potpourri.
Israeli charities (amutot in Hebrew) rely on donations from overseas – no secret there. Many foreign-based charities choose to create an American based nonprofit, more commonly referred to as a “Friends of” organization so donations can be tax-deductible vis-a-vis the American Federal Government. (In a previous post, I spoke about IRS trends when a “Friends of Organization” is applying for tax-exempt status.)
However, it could be that establishing a “Friends of” organization is not in your charity’s best interest. The following are some considerations that elaborate on: Why not to raise funds through a U.S. registered “Friends of” Organization?
International organizations have been highly successful in raising funds from the United States through U.S. based charities commonly referred to as “Friends of” organizations. These charities are registered in the States and have 501(c)3 tax-exempt status and, thus, allowing these donations to these essentially foreign organizations to be tax-deductible.
As you can imagine, many international causes consider a “Friends of” organization as a crucial step in their fundraising strategy.
Hence, recent conversations I have had are causing me to worry.
A list of my favorite articles that I posted to Twitter from December 27, 2009 – January 2, 2010. This week’s categories: Nonprofit Strategy; Internet & Social Media; Israel Economy & Finance; Global Economy & Finance; and Potpourri.
In the past I have written about the US dollars tough battle against a downward spiral. In short, the UnitedState’s dollar is fighting an increasingly gargantuan federal deficit and the prospect of continued low interest rates neither of which bode well for the strength of the dollar.
With that said, what happened last week that caused the dollar to soar against the shekel? Friday, October 23rd, saw the dollar close at 3.6972 while a week later on Friday, October 30th, the dollar closed at 3.7545 a jump of 1.5% in only seven days!
PayPal is coming to Israel, reported Haaretz on September 13th. While this is great news for those individuals buying up those priceless items on eBay, nonprofits should be a little less enthusiastic.