Tackling the International Tax Barriers to Cross-Border Charitable Giving

This research assesses the existing solutions to obtaining a tax incentive on a cross-border charitable donation, in order to tackle the tax barriers involved in international fundraising.

Why this book?

Attracting gifts from private donors is vital for many public benefit organizations, like arts organizations, as the income they generate from other sources is too limited to finance their activities. In order to stimulate individuals to give to arts organizations and other causes active for the public benefit, governments use tax incentives. In many countries, gifts to public benefit organizations qualify for tax incentives for donors’ personal income taxes. When donations cross borders, these tax incentives do not always apply. This hinders public benefit organizations’ ability to raise funds internationally. Several solutions exist to make international donations possible with the benefit of a tax incentive. These solutions can be public solutions (e.g. tax treaties) or private initiatives making use of public solutions (e.g. foreign friends organizations and intermediary charities).

This research evaluates the solutions to cross-border charitable giving from the perspective of arts organizations, making use of both legal doctrinal research and empirical research methods, in order to identify best practices. Based on literature and interviews with fundraisers and directors of arts organizations, an assessment framework is developed to test the different solutions and to determine which solution is optimal from the perspective of arts organizations.