Cross-Border Giving: A Legal and Practical Guide
Donors from the United States are known around the world for their generosity. A record-breaking $390.05 billion was given by US donors to charities in 2016 as highlighted by the Giving USA 2017 Report. The number of foundations, corporations, and individuals committed to advancing philanthropy beyond the borders of the United States is rapidly growing, with gifts to the international affairs subsector growing to represent the seventh-largest share of charitable dollars across the landscape for US charitable giving.
Cross-border donors often face daunting challenges. Complex US and international regulatory frameworks apply to cross-border giving, and a lack of understanding of these rules and regulations can result in excessive exposure of donors to risks impacting both their bank accounts and their reputation. In this age of increased prevalence of money laundering, terrorist financing, and an ongoing global trend of tightening regulation of the nonprofit sector, compliance in cross-border grantmaking has never been more difficult nor more important to achieve.
Even with the noblest of intentions and goals, if donors do not ensure that their funding is going to well vetted, trustworthy recipients they could be doing more harm than good. As you will learn from the authors in this book, many issues must be addressed when US donors, be they foundations, individuals, corporations, or anyone else involved in philanthropy, choose to make cross-border donations. These span a wide range of regulatory compliance issues, such as adhering to laws blocking the use of charitable funds to finance organized crime and terrorism, preventing the cooptation of the grantmaking process for fraud or personal gain, and ensuring full compliance with applicable laws in the foreign countries that host grant beneficiaries.
Introduction: Understanding the 3Rs of Successful Cross-Border Giving, Ted Hart
Chapter One: The Thriving Ecosystem of International Philanthropy, Adam Pickering
Chapter Two: Unite and Conquer! Giving in the Context of the Sustainable Development Goals, Heather Grady
Chapter Three: Ethics in International Grantmaking, Patricia Rosenfield
Chapter Four: Mechanisms for International Grantmaking, Beth Kingsley
Chapter Five: Tools for Direct International Grantmaking: Expenditure Responsibility, John Bennett and David Shevlin
Chapter Six: Tools for Direct International Grantmaking: Equivalency Determination, David Shevlin and John Bennett
Chapter Seven: Vetting International Charities, Jessie Krafft
Chapter Eight: US Financial Transaction Laws and Their Impact on International Grantmaking, Kay Guinane and Nancy Herzog
Chapter Nine: Responsible Giving: The International Grantmakers’ Perspective, Jane Peebles
Chapter Ten: Monitoring and Impact Measurement, David Pritchard
Chapter Eleven: Preparing for an Audit, Victoria Bjorklund
Chapter Twelve—Part One: Donor Perspectives—High Net Worth Individuals and Families, Susan Winer and Betsy Brill
Chapter Twelve—Part Two: Donor Perspectives—Corporations as Donors, Deirdre White and Amanda McArthur
Appendix A: International Organizations Designated by Executive Order
Appendix B: Sample Affidavit for Equivalency Determination
Appendix C: Sample Grant Agreement
Appendix D: Sample Grantee Report Form
Appendix E: Timeline of Post 9/11 Anti-Terrorist Financing Laws and Evolution of Voluntary Guidelines
Appendix F: Anti-Terrorist Financing Legislation and Guidelines
Edited and Written By:
Ted Hart, ACFRE, CAP® — Organizing Editor and Author
Ted Hart, ACFRE, CAP ®, President and CEO, CAF America, brings over thirty years of experience in advising global philanthropy. As an internationally recognized speaker, Ted is an expert in both domestic and global philanthropic regulations and risk management. During his tenure as President and CEO, CAF America has witnessed exponential growth, significantly expanded its suite of services, and dramatically increased the number of charities funded around the world.
Before joining CAF America, Ted served as President of an international consultancy firm, providing strategic solutions to major nonprofits and NGOs. He has coauthored six books published by John Wiley & Sons, including People to People Fundraising, Internet Management for Nonprofits, and Fundraising on the Internet. Ted played a critical role in the creation of the green nonprofits movement and was founder of the international ePhilanthropy Foundation.
In addition to his Master in Public Administration (MPA) degree, Ted is a Chartered Advisor in Philanthropy (CAP), he holds the Advanced Certified Fundraising Executive (ACFRE) designation which is held globally by fewer than 120 people, and is certified in Anti-Money Laundering (AML/CFT) by the Society of Tax and Estate Professionals (STEP).
Kinga Ile — Organizing Editor
Kinga is a human rights lawyer with fifteen years of experience with multidisciplinary teams in the private and nonprofit sectors. Aiming to bridge the gap between these two sectors, she works with businesses and NGOs on forging partnerships and developing strategies that are sustainable, measurable and benefit both corporations and communities.
At CAF America, she manages all strategic and tactical aspects of the thought leadership platform including the launch and development of the International Grantmaking Symposium. Kinga is passionate about using human rights principles to motivate the private sector in seeking to deliver social benefits. Her experience spans from assisting businesses with their expansion strategies into new markets, to representing clients in international arbitration proceedings. Within the nonprofit arena, in her role with the Open Society Foundations, Kinga worked with human rights organizations worldwide focusing on international justice and minority rights.
Kinga is Adjunct Faculty of Regis University and Maastricht School of Management where she lectures on the intersection of business strategy and human rights. Kinga holds an LL.M. in European Union Law from University of Amsterdam and an LL.M. in International Human Rights from Central European University, Budapest.
(Chapters Five and Six)
John Bennett is an Associate at Simpson Thacher & Bartlett LLP where he practices in the Exempt Organizations Group. He advises a variety of international and domestic exempt organizations, including all forms of private foundations and public charities, on structural and operating issues such as formation, governance, reorganizations, domestic and international grantmaking, and taxation.
John also advises endowed public charities and private foundations in connection with investment-related matters, including with respect to traditional private fund and managed account investments as well as impact investments and mission- and program-related investments. In addition, John is a regular speaker on topics of interest to exempt organizations.
John earned his JD at Columbia Law School, where he was a James Kent Scholar and a Harlan Fiske Stone Scholar, and earned his BA degree from Tufts University.
Victoria B. Bjorklund is a Retired Partner at Simpson Thacher & Bartlett LLP where she founded and headed the Firm’s Exempt Organizations Group.
Since 1989, Victoria has served as a director, pro bono legal counsel, and currently chairs the Board of Advisors for Doctors Without Borders. She is also a director of the Robin Hood Foundation, the Friends of Fondation de France, the Institute for Advanced Study in Princeton, Nutrition Science Initiative (NuSI), and the Lawyers’ Committee for Civil Rights Under Law. Until recently, she was a trustee of the American Friends of the Louvre, the Louvre Endowment, and Princeton University.
Victoria is a former chair of the ABA Tax Section Committee on Exempt Organizations and of its subcommittee on International Philanthropy. She is the coauthor of New York Nonprofit Law and Practice (LexisNexis, 3d Ed. 2015) and annual supplements. She also taught The Law of Nonprofit Organizations at Harvard Law School for eight years ending in 2017.
She earned her JD at Columbia University School of Law, a PhD in Medieval Studies from Yale University, and a BA, magna cum laude, from Princeton University, where she graduated in three years and was elected to Phi Beta Kappa.
(Chapter Twelve, Part 1)
Betsy Brill is cofounder and President of Strategic Philanthropy, Ltd., a global philanthropic advisory firm. In 2000, after twenty years of working with foundations and nonprofit organizations, Betsy, along with Susan Winer, established Strategic Philanthropy, Ltd. This Multi-family Philanthropic Office® offers a wide range of support from strategy to implementation to back-office administration for foundations to HNW individuals, families, and family-owned businesses who want a more thoughtful and measurable approach to their lifetime and legacy giving.
Betsy has an MBA from Thunderbird School of Management and a Certificate in Nonprofit Management from Roosevelt University. She is a Trustee at Adler University, one of a select group of professionals designated as a National Center for Family Philanthropy Trained Consultant, and a registered Trust and Estate Practitioner (TEP) through the Society of Trust and Estate Practitioners (STEP). Betsy was also the only US member of STEP’s Philanthropy Special Interest Group.
She has been a featured speaker at numerous conferences, including Financial Advisor magazine’s annual Invest in Women Conference. She has authored numerous articles including pieces for the Journal of Practical Estate Planning, Alliance Magazine, STEP Journal (Society of Trust and Estate Practitioners), Essentials Magazine, and Adler University.
Heather Grady is a Vice President at Rockefeller Philanthropy Advisors and leads strategy and program development in global philanthropy. She leads the SDG Philanthropy Platform to encourage philanthropy to engage more meaningfully in the Sustainable Development Goals, and the Scalable Solutions initiative, which supports funders to work collaboratively to place longer-term, adaptive resources to accelerate scalable solutions that target systemic changes. Heather serves as an Adjunct Professor at the China Global Philanthropy Institute.
Heather’s philanthropic advising has been shaped in part by two decades living in countries in Asia, Africa, and the Middle East, managing development and humanitarian programs focused on a range of themes including education, livelihoods, health, agriculture, and microfinance. Heather was a Vice President at The Rockefeller Foundation where she managed a budget averaging $65 million. She served as Managing Director of Realizing Rights: The Ethical Globalization Initiative and was an Adjunct Professor at Columbia University.
Heather has degrees from Harvard University and Smith College. She serves on a number of boards and advisory groups including The B Team, the Business and Human Rights Resource Center, and the Wildlife Justice Commission. She is a member of the World Economic Forum Global Future Councils and the NationSwell Council.
Kay Guinane, JD
Kay Guinane is a public interest attorney who specializes in the rights of nonprofit organizations, particularly in the areas of free speech, association, and national security. As Director of the Charity & Security Network, she leads efforts to make national security rules impacting nonprofit organizations consistent with constitutional and human rights principles and to eliminate unnecessary barriers to their legitimate work.
She has published research, testified before Congress and the Federal Election Commission, and engaged extensively in advocacy and consulting on these issues in the United States and abroad. She serves as Co-Chair of the Global NPO Coalition on FATF.
Kay holds BA and JD degrees from the State University of New York at Buffalo and is licensed to practice law in the District of Columbia, Kentucky, and Maryland.
Nancy Herzog is the Senior Director of Grants Administration at the National Endowment for Democracy, where she leads a team responsible for ensuring compliance and effective and efficient grants management of NED’s global grantmaking program, which makes about 1,500 grants annually in more than eighty countries.
She has served on the board of PEAK Grantmaking and is an active participant and presenter at conferences and related events in the grants management field. Nancy received a BA from Wesleyan University in Russian Studies and an MA in International Policy Studies from the Middlebury Institute of International Studies at Monterey.
Beth Kingsley is an attorney at Harmon, Curran, Spielberg + Eisenberg, LLP where she represents nonprofit organizations and political campaigns, providing a full range of general counsel services to a variety of nonprofits including private foundations, associations, community-based groups, national and international public interest organizations, and political organizations. Her expertise includes state and federal tax exemption as well as the laws governing advocacy.
Beth cochairs the subcommittee on Politics and Lobbying Activities of the Exempt Organizations Committee of the ABA Tax Section and is a regular contributor to the journal Taxation of Exempts. She has a BA from Oberlin College and JD from Georgetown University Law Center.
Jessie Krafft is the Vice President of Donor Advised & Grant Services at Charities Aid Foundation of America (CAF America), where she has worked for over six years. Jessie manages a grants team of twenty individuals who are responsible for charity vetting, grantmaking, and oversight of IRS regulatory compliance and foreign nonprofit laws, as well as the day-to-day support of thousands of donor clients and international charities. Under her direction, the team works diligently to remain at the forefront on all US tax laws and regulations, local foreign country regulations, and compliance-related issues in relation to international grantmaking.
Jessie holds an MA in International Development from American University. She graduated summa cum laude from the honors college at Virginia Commonwealth University with a BA in Spanish, a BS in Anthropology, and a minor in Latin American Studies. She holds a certificate in Nonprofit Executive Management from Georgetown University and is certified in Anti-Money Laundering (AML/CFT) by the Society of Tax and Estate Professionals (STEP). Jessie is fluent in Spanish and holds a Spanish Certificate of Translation and Interpretation from her alma mater. Before joining the CAF America staff, she worked for eighteen months as a volunteer visitor coordinator, tutor, and child caretaker at an orphanage in Tegucigalpa, Honduras.
(Chapter Twelve, Part 2)
Amanda MacArthur is the Chief Program Officer at PYXERA Global, an international NGO that leverages the unique strengths of the public, private, and social sectors to address complex global challenges. Amanda leads a dedicated and passionate team to design, implement, and measure the impact of an array of programs that engage the power of tri-sector partnerships to address the most pressing challenges we face today.
Prior to her current role, Amanda built the organization’s global pro bono practice, which is dedicated to building the capacity of social mission-driven organizations around the world by delivering more than $10 million in pro bono consulting annually. Amanda led IBM’s first-ever Corporate Service Corps team in 2008 and has since developed similar programs for FedEx, The Dow Chemical Company, and Medtronic, among several other Fortune 500 companies.
She has written and spoken extensively on the power of global pro bono and experiential learning programs to transform how corporations interact with underserved markets while transferring much-needed skills and expertise to social mission-driven organizations. In addition to being recognized as among BMW Foundation Responsible Leaders, she is a member of the Bretton Woods Committee and is on the Leadership Faculty at Points of Light’s Corporate Institute.
Jane Peebles, JD, TEP, ACTEC
Jane Peebles is a Senior Partner of Karlin & Peebles, LLP in Los Angeles. Her primary areas of practice are US and international estate and charitable planning. She represents high-net-worth families, entrepreneurs, philanthropists, and nonprofits. She is a frequent speaker and author on a variety of domestic and international estate and charitable planning topics including “Implications of the Anti-Terrorist Financing Rules for US Charities Making Grants Abroad ,” “Emerging Legal Issues in International Philanthropy ,” and “Here There Be Dragons: Navigating the Waters of Cross-Border Philanthropy.”
Jane taught an extensive course in cross-border philanthropy for the Certified Specialist in Planned Giving program for fifteen years. She is a Fellow of the American College of Trust and Estate Counsel (ACTEC) and is certified by the California State Bar Association as a Specialist in Estate Planning, Probate, and Trust Law. Her peers have voted her a Southern California Super Lawyer every year since 2004 and a Best Lawyer in America in the Specialty of Trusts and Estates every year since 2008.
After more than a decade working in policy and thought leadership roles in civil society, Adam now serves as a Policy Advisor on civil society to the British government within the Department for International Development (DFID).
Before working for DFID, Adam spent five years at Charities Aid Foundation (CAF) where he led on international policy, contributed publications, and spoke on a wide range of issues as part of CAF’s in-house think tank, Giving Thought.
An expert on civil society, international development, accountability, and international nonprofit law, Adam has also worked for the National Council for Voluntary Organisations (NCVO) and the Centre for Public Scrutiny among other organizations in the UK and India.
David Pritchard advises nonprofit, private, and public sector organizations on how to assess and increase their social impact. He supports effective change-makers by helping them plan and evaluate what they do. David has more than twenty-five years of experience working with government agencies, nonprofits, and foundations in the United Kingdom and the United States.
David teaches planning and evaluation methods at Adler University, Chicago. He was formerly an economist for New York City Economic Development Corporation and Head of Measurement and Evaluation at New Philanthropy Capital in London.
David has a BA degree from Oxford University, an MA in International Peace Studies from the University of Notre Dame, and an MBA from Yale University.
Patricia Rosenfield, PhD
Patricia L. Rosenfield, PhD, Senior Fellow, Rockefeller Archives Center (RAC), Sleepy Hollow, New York, undertakes activities to connect practitioners and scholars of philanthropy. Her areas of focus include the history of the Ford Foundation, the role of US foundations in the early history of the HIV/AIDS, and foundation support for international fellowships and exchanges.
Before joining RAC, Patricia was at Carnegie Corporation of New York, first chairing its Strengthening Human Resources in Developing Countries Program and then directing the Carnegie Scholars Program. Earlier she served at the World Health Organization in Geneva, responsible for a global program on social and economic research on tropical diseases.
Patricia holds an AB cum laude from Bryn Mawr College, a PhD from Johns Hopkins University, and an Honorary Doctorate from Mahidol University, Bangkok. She has written on the history, practice, and ethics of philanthropy; approaches to interdisciplinary team science; international health; and economic development. Patricia is coeditor with Frank Kessel and Norman Anderson of Expanding the Boundaries of Health and Social Science (Oxford University Press, 2003) and an updated volume, Interdisciplinary Research, Second Edition (Oxford, 2008). She is the author of A World of Giving: Carnegie Corporation of New York, A Century of International Grantmaking (PublicAffairs, 2014).
(Chapters Five and Six)
David Shevlin is a Partner at Simpson Thacher & Bartlett LLP and is head of the Exempt Organizations Group. He advises a variety of international and domestic exempt organizations, including all forms of private foundations and public charities. David also advises donors to and the governing bodies of exempt organizations.
David has been recognized as a leading not-for-profit lawyer in The Legal 500 United States (2013) and as a leading practitioner in Chambers USA: America’s Leading Lawyers for Business (2008 – 2013). In addition, he regularly speaks and writes on topics of relevance to exempt organizations.
David earned his JD, magna cum laude, at New York University where he was named a member of Order of the Coif, and earned his BS degree from Cornell University, where he was named a Presidential Scholar.
(Chapter Twelve, Part 2)
Deirdre White is a globally recognized leader in building tri-sector partnerships to address the world’s most pressing challenges. As CEO of the international NGO, PYXERA Global, she has led the transformation of the organization to one that maximizes impact through strong and strategic partnerships.
Deirdre’s work has been featured in Fortune, Wall Street Journal,Council on Foreign Relations, and Stanford Social Innovation Review. She has been quoted in Bloomberg, Forbes, Fast Company, and The Huffington Post, and has been an invited speaker to TEDx, U.S. Department of State’s Global Partnership Week, Shared Value Leadership Summit, and Wall Street Journal’s CFO Network. Deirdre is a member of the MIT Ideas Global Challenge Advisory Board and the Bretton Woods Committee, and is an alumna of the Aspen Institute’s Socrates Program.
Deirdre drives the discussion of new strategies for global engagement. She has served for multiple years as regional judge for the HULT Prize, a competition dedicated to launching the world's next wave of social entrepreneurs. Previously, Deirdre was cofacilitator of the Clinton Global Initiative’s Employee Engagement Action Network. She also participated in The Rockefeller Foundation’s renowned Bellagio Initiative and the Johnson Foundation at Wingspread’s Leadership Forum for Global Citizen Diplomacy.
(Chapter Twelve, Part 1)
Susan Winer is Chief Operating Officer of Strategic Philanthropy, Ltd., and a cofounder of the donor-centric philanthropic advisory firm headquartered in Chicago with offices in Detroit, MI.
Susan brings a unique skill set resulting from almost twenty-five years of work with established nonprofits and closely held businesses. As part of her focus on the family business and institutional services side of the firm’s service offerings, she has led the development of the firm’s Trusted Advisor training and education program that ensures a deeper understanding of how to undertake and support impactful philanthropy.
Susan is a prolific writer. She writes a monthly article for Family Wealth Report on philanthropy. She has authored or coauthored articles for such publications as: PAM (Private Asset Management), Alliance, Family Business, STEP (Society of Trust and Estate Practitioners), Family Office Review, The American Endowment Foundation, Family Firm Institute, and Desert Charities. She has also served on the faculty of the Institute for Preparing Heirs and has been a presenter at numerous workshops and conferences.
Susan has a BA from Wayne State University, attended graduate school at the University of Michigan, and successfully completed the mediation program at the Center for Mediation Law in California.