What is global grantmaking?
Often referred to as international grantmaking or cross-border grantmaking, global grantmaking is a broad term used to describe when U.S. foundations make grants to support charitable activities outside of the United States. This could include providing funding directly to organizations not in the United States or making grants to U.S.-based nonprofits that work in other countries.
The U.S. tax code allows for nonprofits to run programs or fund other organizations overseas. However, it provides specific rules that private foundations must follow when making grants internationally. These rules also apply to grants made by donor-advised funds.
Foundations have been working internationally for many decades, funding every sort of issue imaginable. Still, all these global grants must be for charitable purposes as defined in the U.S. tax code.
The process of making global grants is often more complicated than supporting a public charity within the United States. The IRS has provided clear frameworks that private foundations and donor-advised funds need to follow to ensure that the organization they seek to support is both legitimate and meets the definition of charitable from a U.S. legal perspective.
Factoring in compliance with recipient country laws, ensuring you’re not supporting terrorism or sanctioned organizations, and challenges with language and culture – global grantmaking warrants its own field of research and resources.
But speak to any global grantmaker and they’ll attest that despite the challenges inherent in the process, the results are often rewarding and bring new perspectives and learnings to a foundation’s work.
