The past several years have seen a dramatic increase in cross-border philanthropy among grantmakers in the United States. A 2003 report from the Foundation Center and the Council on Foundations found that international giving by foundations grew by a remarkable 131 percent between 1998 and 2001, far outpacing the 71-percent increase in overall grant dollars.
While the report mainly covered giving by large foundations and was no doubt influenced by sizeable overseas grants from the likes of the Bill and Melinda Gates Foundation, there is little doubt that international giving is on the rise throughout the philanthropic sector. Seeking to make an impact on global issues from AIDS and poverty to the environment, education, and human rights, foundations large and small are seeking to put their charitable giving to work helping people and communities throughout the world.
Giving internationally can be a significant challenge, especially for smaller family foundations or individual donors who do not have the staff or the financial resources to research issues and charities, track results, and comply with the legal requirements involved in cross-border philanthropy. Particularly in the wake of the 9-11 attacks, foundations are under increasing pressure to ensure that their international grants go to reputable charities and are used for legitimate charitable purposes.
These and other concerns are prompting increasing numbers of family foundations, as well as other donors, to seek out intermediary organizations that offer a combination of international grantmaking expertise and services, including due diligence research on overseas charities. As qualified U.S. public charities, these organizations also provide tax benefits that donors could not achieve by making international contributions directly.
Family foundations have varying reasons for wanting to give internationally. However, in CAFAmerica's experience, two motivations stand out: 1) an interest in supporting a specific global cause or a set of causes; and 2) an interest in supporting charitable activity in a specific country or region of the world.
Supporting a specific cause or causes
In 2004, CAFAmerica worked with a family foundation to identify a leading foreign charity engaged in research into cures for Parkinson's disease. Working with our CAF International Network colleagues in the United Kingdom, we researched a number of charities and identified The Brain Research Trust as a good match for the donor's interests.
The Trust supports research at the Institute of Neurology in London, where scientists are experimenting with a new medical procedure called "deep brain stimulation." During the procedure, pacemakers are implanted deep in the brain of Parkinson's patients to relieve symptoms of the disease, including tremors and rigidity. It is groundbreaking research that is happening in just one place in the world, and now it is supported by a CAFAmerica grant made possible by a donation from a U.S. family foundation.
This foundation is not alone. Whether you are interested in health, the environment or any other cause, an intermediary can work with you and your family to identify foreign charities you can support. Over the last several years, CAFAmerica has increased the number of overseas charities eligible for grants from 1,000 to more than 2,400.
Supporting charitable activity in a specific country or countries
In the same way that an intermediary can help donors identify charities working on specific causes, these organizations also can identify charities working in countries where you want to focus your charitable efforts. Perhaps you have family living in another country. Or maybe you want to give in a country where you trace your family's ancestral roots.
In 2000, a family foundation with a passionate interest in the environment began working with CAFAmerica to support environmental projects in many of Africa's poorest countries: Burkina Faso, Ethiopia, northern Ghana, Mali and Niger. Following this initial involvement, the donor became interested in expanding its grantmaking to support conservation efforts in Mexico. The family's interest went far beyond traditional conservation efforts; its goal was to find charities that linked conservation and efforts to build self-reliant, thriving communities. This led CAFAmerica's staff to the work of Alternare, AC, a Mexican charity that trains local residents to work with village communities on issues of sustainable development.
The focus of the charity's work: building skills such as nature-friendly construction techniques and environmentally friendly farming practices. And, now this important work is attracting newfound support, thanks to a family foundation that saw no reason to limit the scope of its grantmaking to domestic charities.
In addition to providing expertise on international giving and global charities, intermediaries can offer an array of services that make cross-border philanthropy safer, easier and more effective. Consider the case of the family foundation that wanted to achieve a greater impact on global equity and poverty issues through its grantmaking. After tiring of making small, one-time grants to individual charities, the foundation used proceeds from liquidating stock to create a donor-advised fund with CAFAmerica. The result: it now coordinates with other donors to make several significant grants each year to the U.K.based Network for Social Change, which funds a variety of social development projects throughout the world.
Then there are the foundations and donors who turn to an intermediary organization primarily because of the due diligence requirements facing grantmakers who want to support charities overseas. When a family foundation in Seattle wanted to make grants in Israel through a community foundation in the city, the community foundation turned to CAFAmerica to research charities, conduct equivalency reviews and handle grants administration and reporting duties. Because of the family foundation's interest and commitment, CAFAmerica helped them to make a grant to The Ebenezer Home in Israel. The home provides medical care and social activities, as well as opportunities for spiritual growth, to elderly and infirm residents.
The "war on terrorism" has placed international grantmaking under the spotlight as never before. And, in the wake of new requirements on international grantmakers in the USA Patriot Act, working with an intermediary can take the stress out of international grantmaking. By researching charities and issues, conducting site visits, and requiring detailed reports from all grantees, intermediary organizations, such as CAFAmerica can ensure that grants go only to legitimate foreign charities.
Of course, security issues are just one concern. Private foundations providing direct grants to charities overseas also are required to determine whether the grantee is the equivalent of a U.S. charitable organization. A gift to a U.S.-based intermediary, by contrast, is the same as a gift to any other qualifying U.S. public charity–and it comes with the same tax benefits.
Giving internationally can be a rewarding—and effective—way to meet your family's philanthropic goals. But it also can be confusing, costly and an administrative headache. Your family may not have the assets of the Bill and Melinda Gates Foundation. However, by working with an intermediary organization that knows its way around the world—as well as the rules and regulations governing international giving—you, too, can help solve today's global problems.
About CAF America
A U.S.-based 501(c)(3) organization, CAFAmerica is dedicated to expanding
borderless giving among donors in the United States. CAFAmerica was founded
in 1992 as part of the CAF International Network, which spans five
continents and provides a range of financial services, handling more than $3
billion a year for donors and charities throughout the world.
Over the past 10 years, CAFAmerica has made more than $42 million in grants to charities working in 64 countries around the world—from the United Kingdom and France to Slovakia, China, India, South Africa, Mexico and Chile. CAFAmerica’s donors are individuals, corporations, foundations and other grantmakers, including a growing number of U.S. family foundations that are seeking to support charitable organizations and causes in other parts of the world. E-Mail: info@cafamerica.org On the web:
www.cafamerica.org;
www.allaboutgiving.org/america |
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