It is not uncommon for a United Stated-based organization to have activities in other countries.  Indeed, for many organizations international activity is their primary reason for existence and the thrust of their mission. Sometimes, these international activities may take the form of grant from the U S-based organization to an organization in another country. These grants may present some issues for the U S organization if they are not handled properly.

Federal law is not clear in regard to documentation requirements for grants made by a 501(c)(3) public charity to foreign organizations.  Specific laws do apply to 501(c)(3) private foundations.  The IRS has taken the position, however, that public charities should follow the expenditure responsibility rules that apply to private foundations in regard to foreign Read More