New York Times reports that until recently expatriates, along with Americans
who want to support overseas projects personally, are ineligible for the
same tax benefit accorded charitable gifts to nonprofit organizations in the
United States (exceptions are charities in Canada and Mexico, which have
special arrangements with the United States).
In the last year, however, few charities, using different strategies, have
found means to satisfy donors' intentions abroad, and also earn them the tax
deduction they want. These charities include India Abroad Foundation,
National Philanthropic Trust, Give2Asia, and Community Foundation Silicon
Valley.
The lack of a tax deduction has curbed international giving. Taxpayers in
the United States report that only 1 percent of their charitable giving is
international. That figure includes American-based nonprofit groups that do
charitable work abroad.
US Internal Revenue Service scrutinizes organizations very closely while
providing them tax exempt status to ensure funds are not misused.
It remains to be seen if US based NRI charitable contributions to India are
going to increase as a result to the tax deduction.
- nriol.com report
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