August 7, 2003 | Read Time: 2 minutes
International Charitable Foundations: an Introduction
by Jonathon R. Moore
This primer explains some of the reasons why a philanthropist might decide to establish a foundation outside the United States and gives advice about how to establish such a charitable organization.
Jonathon R. Moore, a lawyer in Washington, says that although foundations in the United States may enjoy tax advantages, they also endure “burdens and constraints” imposed by the complex regulations grant makers must follow, especially those that support international organizations. He notes that, according to Internal Revenue Service estimates, private foundations annually spend more than 200 hours, on average, filling out IRS forms, keeping records, and learning about charity law.
Establishing a foundation outside the United States frees philanthropists from many of those reporting requirements and from some U.S. legal restraints, such as the limit on the percentage of voting stock a foundation can hold in one company and the mandatory annual 5-percent distribution of assets.
The book gives advice on selecting a jurisdiction for a foundation outside the United States and describes ways to set up a foundation’s governing structure and grant-making policies. Mr. Moore explains that although donations made by American citizens to establish foundations outside the United States are subject to federal income tax, future contributions may be deductible from U.S. estate and gift taxes. The appendices include copies of charity-related U.S. tax forms, as well as templates for establishing charitable organizations in Bermuda — a country commonly chosen for its proximity to the United States and its comprehensive laws and legal system.
Mr. Moore cautions, however, that foreign foundations are not for everyone and that his book is not intended to help wealthy individuals use charitable organizations for their own benefit under the guise of charity.
Publisher: Transnational Publishers, Ardsley Park, 410 Saw Mill River Road, Ardsley, N.Y. 10502-2615; (914) 693-5100; fax (914) 693-4430; info@transnationalpubs.com; http://www.transnationalpubs.com; 225 pages; $45; I.S.B.N. 1-57105-281-X.
