Three Tips for Global Giving
Global giving is a growing slice of charitable activity in America. Learn more about how donor-advised funds can amplify your international grantmaking.
How Donor-Advised Funds Can Amplify Your International Grantmaking
International giving is a growing slice of Americans’ total charitable activity. In 2020, Americans directed $25 billion to international organizations or domestic groups focusing on work outside the United States—rivaling even the federal government’s non-military foreign aid distributed that year: $34 billion, which itself is still only about 1 percent of the federal budget. Regardless, it’s clear that for donors in the U.S., giving is global.
NPT’s donors have made international grants to 70 different countries around the world since 2001. NPT also maintains a worldwide footprint through global affiliates NPT UK and NPT Transatlantic, providing grantmaking expertise for donors based in the U.K. and around the world. The two organizations have helped donors make an impact across 33 countries and six continents.
Last year, the total number of international grants increased by 15% for NPT’s U.S.-based donors. They gave more than $250 million to organizations across 40 different countries working on everything from humanitarian crisis relief to vaccine delivery to improving local infrastructure, strengthening health systems and protecting wildlife and the environment.
In recent months, NPT’s donors have been drawn to support relief efforts in Afghanistan and Ukraine. Others are giving to malaria prevention efforts in Congo and Uganda, or to labs improving agricultural technology for farmers in Kenya and Ethiopia.
But for those new to international grantmaking, or those who wish to expand their scope of philanthropy, we’ve assembled some tips to expand your international charitable priorities.
1. Answer the Call in the Right Way
Donors responding to emerging or sudden global priorities often have to balance the need to act fast with the need to act responsibly. No matter where you plan to give, NPT encourages donors to research organizations prior to entering a grant recommendation.
Two effective ways of supporting international causes are to find an approved domestic charitable organization maintaining programs abroad, or work with an intermediary “friends of” organization. Giving to a domestic organization that works internationally can sometimes get funds to an international cause faster. There are many well-known international relief and humanitarian organizations based in the U.S. Whether you give to one these organizations or a smaller, more specialized group, be sure look into their previous history, ongoing work and the outcomes of their efforts. Pay special attention to an organization’s interaction and collaboration with local populations, the presence of local leaders within the organization, and their track record with communities on the ground.
A word of caution: In times of crisis, proper vetting of a charity is of paramount importance to avoid being taken advantage of by bad actors. Guidestar and Charity Navigator are two resources that can provide a wealth of information, reporting and background for reputable charitable causes around the world.
2. Remember the Requirements for International Rapid Response
When considering giving to a charitable organization without a presence or intermediary connection in the U.S., additional steps are necessary. Due diligence is an important process to make sure grant dollars reach their intended recipient, especially in countries or regions in crisis.
Grants like these are international financial transactions which carry with them certain legal requirements. As with giving to a domestic organization, all international grants must be intended for charitable purposes. The next steps involve the process of equivalency determination (is the international organization the legal equivalent of a domestic charity?) or of expenditure responsibility (where the grant provider takes responsibility that the grant will be properly used for charitable purposes).
International giving is often easier by using certain types of giving vehicles. Many charities that manage donor-advised funds (like NPT) provide direct foreign grant service which can streamline this process. While international giving typically takes longer than domestic grantmaking (especially in zones of crisis), DAF sponsors handle all associated due diligence, paperwork and reporting for international grantmaking, ensuring that your grant recommendation is made as quickly and efficiently as possible.
3. There are Options Beyond Your Checkbook
Cash donations have historically been the most effective way to make a difference. In-kind donations of supplies are appealing, but direct, unrestricted grantmaking allows recipients to allocate funds where they are most needed and provide on the ground staff the flexibility they need.
While cash remains an efficient way to conduct philanthropy abroad, it bears mentioning that a donor-advised fund can accept illiquid and complex assets which can be put to charitable use. With a DAF, unrestricted stock, real estate, cryptocurrency and more can be converted to cash, ready to deploy from your DAF account. This is often easier than contributing such assets directly to nonprofits, which are sometimes limited in their ability to accept complex assets, especially organizations overseas.
Whether you are motivated to support disaster relief, help expand healthcare and medical infrastructure or protect an endangered species halfway across the globe, there are effective charitable operations on the ground who can use your support. When making grants internationally, following these guidelines will help streamline your giving and ensure your charitable dollars make a difference.
For donors interested in reviewing their grantmaking strategies, NPT remains ready to help you help others. Contact us at (888) 878-7900 or firstname.lastname@example.org with any questions.
NPT does not provide legal or tax advice. This blog post is for informational purposes only and is not intended to be, and shall not be relied upon as, legal or tax advice. The applicability of information contained here may vary depending on individual circumstances.