Can US Nonprofits Operating Internationally?

International Operations for US Nonprofits

US nonprofits can operate internationally if they comply with laws of countries they work in. They must register as 501(c)(3) organizations with the US government to operate abroad. Their board of directors must have at least three US citizens residing in the US. Over 9,000 nonprofits operate in New Mexico.

This webinar analyzes laws for international nonprofit expansion: Executive Order 13224, Office of Foreign Asset Control, Bureau of Industry and Security, IRS Foreign Banking and Financial Accounts, and the Foreign Corrupt Practices Act. It covers nonprofit compliance related to activities of employees abroad.

Starting an International Nonprofit

To start an international nonprofit:

  1. Form a Board of Directors of like-minded, dedicated people representing the community it serves. Due to conflict of interest policies, all board positions are voluntary.
  2. Define the mission, goals, target population, and outreach in writing.
  3. Nonprofit status ensures tax exemption where it operates.

NGOs offer goods, services and collect fees as nonprofits. They focus on health, education, human rights, environment, and development aid.

There are growing contacts between domestic nonprofits internationally, with more collaborations across borders or expansion of operations abroad.

For-Profits Transitioning to Nonprofits

A for-profit company can transition to a nonprofit or NGO but involves restructuring. The state grants “nonprofit” status; the IRS grants “tax-exempt” status. To become a nonprofit, no income can go to members, directors or officers. Most nonprofits use volunteers and paid management staff. Unlike businesses, they have no owners and surplus profits further their goals.

Starting a Nonprofit: Steps and Considerations

How to Start a Nonprofit Organization in 10 Steps

A critical step in starting a nonprofit organization is to complete your business plan. Use Growthink’s Ultimate NonProfit Business Plan Template to help you with this process.

Factors like the amount of time, effort, impact, and resources should be considered when starting a nonprofit. Your salary as part of the organization can’t be tied to how much profit it makes, and it’s decided by the board of directors.

Our step-by-step guide aims to provide a road map for aspiring changemakers.

US Charities Supporting Foreign Charities

A US charity can donate to a foreign charity within compliance. Contributions to foreign charities are only US tax deductible under certain conditions, such as through US "Friends" groups.

Funds from US donors to overseas entities must adhere to fiduciary responsibilities. Setting up properly structured US "Friends of" groups or using intermediaries like donor-advised funds can maintain tax deductions while supporting foreign causes.

A foreign national can donate to a US 501(c)3 charity and considerations around international gifts, such as minimum donation amounts and fees, should be taken into account.

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