What issues arise when a family makes grants or operates charities internationally?
International philanthropy requires additional oversight. Families must confirm that recipients are legitimate, permitted to receive funds, and able to use them as promised. Sanctions, terrorist financing rules, local registration, currency controls, incomplete records, staff safety, and changing political conditions can disrupt a program. Good governance and documented monitoring reduce surprises.
Recipient checks and grant controls
A family foundation cannot treat an overseas grant like a domestic donation. For a U.S. private foundation, a foreign grant generally requires either an equivalency determination or expenditure responsibility, unless a specific exception applies. Expenditure responsibility can include a pre-grant inquiry, a written grant agreement, limits on how funds are used, and reports from the recipient. The IRS describes these requirements in its guidance on foreign grants. IRS
The practical issue is evidence. The family needs reliable information about the charity's legal status, leadership, bank account, finances, activities, and ability to deliver the project. Records may be incomplete or difficult to verify. A written budget, payment schedule, reporting plan, and right to pause funding help trustees show that charitable assets are being supervised.
Sanctions, terrorist financing, and local rules
Cross-border transfers can touch sanctions regimes even when the project is humanitarian. OFAC rules can restrict transactions with designated people, organizations, or jurisdictions. The U.K. Charity Commission also warns that overseas charities should assess terrorism, money laundering, fraud, and other financial risks before sending funds. OFAC Charity Commission
The charity may also need registration, permits, employment compliance, customs clearance, or approval for foreign funding in the country where it operates. Rules can change after elections, conflict, or a currency crisis. Families should identify which country laws apply to the donor, the recipient, the payment route, and the activity itself.
If you don't have your values documented, then you don't know what investments to do. You don't know if you're really long-term oriented or short or the people around you won't know these things. You might have a good gut feel for it, but define your three to five values and your objectives.
Safety, oversight, and reputation
International work can expose staff, volunteers, and beneficiaries to security threats. The Charity Commission advises charities working overseas to assess these risks and monitor conditions as they change. Charity Commission
Distance also makes oversight harder. A family may receive reports that are late, poorly translated, or based on limited site access. Use independent checks where practical, keep a clear audit trail, and document decisions when conditions prevent normal monitoring. Review whether the project still matches the family's charitable purpose and values. These steps protect beneficiaries and help future family members understand why each grant was approved.
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- Philanthropy and Family Foundations: A Practical Guide for Wealthy Families