Are Donations to Foreign Charities Tax Deductible?

When philanthropic interests extend beyond national borders, the tax implications become more complex. A foreign charity, for U.S. tax law purposes, is any charitable organization not created or organized within the United States. The primary rule for American taxpayers is that contributions made directly to these foreign entities are not eligible for a tax deduction on a U.S. federal income tax return.

The General Rule for Deductibility

The Internal Revenue Code (IRC) sets standards for an organization to be a “qualified organization,” making contributions to it deductible. A requirement under Internal Revenue Code Section 501(c)(3) is that the organization must be created or organized in the United States. This domestic formation rule is the primary reason direct donations to a charity in another country do not qualify for a U.S. tax deduction, even if it holds a similar charitable status there. This framework ensures that organizations receiving deductible contributions are subject to U.S. oversight.

For instance, a taxpayer who writes a check directly to a hospital in France cannot claim that amount to reduce their taxable income. The limitation is not about where the charitable work takes place, but where the organization is legally established. This distinction is what allows for other legitimate methods of supporting foreign causes in a tax-deductible manner.

Exceptions Through Tax Treaties

A specific exception to the general rule exists through international tax treaties. The United States maintains agreements with Canada, Mexico, and Israel that allow for the deductibility of contributions made by U.S. taxpayers to those nations’ charities. For donations to a registered Canadian charity, a U.S. taxpayer can claim a deduction, but it is limited to the extent that the taxpayer has income from Canadian sources. The amount deducted is also subject to standard U.S. percentage limits for charitable contributions, applied against the taxpayer’s Canadian-source income. If a taxpayer has no income from Canada in a given year, no deduction can be taken.

The tax treaty with Mexico has similar provisions. A U.S. taxpayer can deduct contributions to a Mexican charitable organization if it would have met the qualifications of a U.S. public charity. This deduction is limited to the standard percentage of the taxpayer’s income sourced from Mexico. The treaty with Israel also allows for deductions to certain Israeli charities, limited by a percentage of the taxpayer’s adjusted gross income (AGI) from Israeli sources.

Deductibility Through US Intermediary Charities

The most common method for making a tax-deductible donation to support a foreign cause is by contributing to a U.S.-based intermediary charity. These are qualified 501(c)(3) organizations that either conduct their own international programs or support foreign charitable organizations. This structure allows donors to receive a U.S. tax deduction because their contribution is made to a domestic entity. One model is a large, U.S.-based charity that operates globally, such as Doctors Without Borders, where the charity maintains full control over the funds.

Another model is the “friends of” organization, a U.S. charity established to support a single foreign institution like a museum or university. For the donation to be deductible, the U.S. “friends of” organization must not be a mere conduit. It must retain legal discretion and control over the donated funds, making independent decisions on grants. A donor cannot legally “earmark” their contribution through the U.S. charity to the foreign one; the U.S. entity must have the final say. Donors can verify an intermediary’s status using the IRS’s Tax Exempt Organization Search tool.

Required Documentation and Claiming the Deduction

Once a taxpayer makes a deductible contribution, either through a treaty exception or a U.S. intermediary, specific documentation is required to substantiate the deduction. For any single contribution of $250 or more, the taxpayer must obtain a contemporaneous written acknowledgment from the qualified charity. This document must state the amount of the cash contribution, a description of any non-cash property, and whether the organization provided any goods or services in exchange for the gift.

The responsibility for obtaining this receipt lies with the donor, and it must be in hand before filing the income tax return for the year the contribution was made. To claim the deduction, individual taxpayers must itemize their deductions on Schedule A of Form 1040. Charitable contributions are reported on the “Gifts to Charity” line, which reduces their adjusted gross income and overall tax liability.