Giving: A breakdown on sending money abroad for charity
The global gap in wealth inequality has reached extreme levels, with the rich getting richer year-on-year. Facebook CEO Mark Zuckerberg and his wife Priscilla Chan recently decided to tackle this issue head-on, and announced that 99% of their Facebook shares will be donated to "personalised learning, curing disease, connecting people and building strong communities" across the world.
Mr. Zuckerberg's donation is currently valued at $45bn US dollars, but it's possible to make a big difference even without this fortune at your fingertips. International money transfer to foreign charities can be both impactful and straightforward – here’s what you need to know to get started.
Choosing a charity
It always pays to do some research before supporting a cause. Take a look at where the charities you're considering are based, and check whether they're affiliated with any other big names you've heard of. Most third sector groups are honest and genuine, however there are ones to be wary of too – separate the good from the bad by identifying what each charity uses their donations for. Transparent financial records, an experienced senior management team and a clear mission statement are usually good indicators that you're dealing with a legitimate party.
Before you settle on a charity, it's worth investigating how your donation will affect your tax status. In 2009, a ruling by the European Court of Justice indicated that a German donor named Hein Persche should receive tax relief for money given to a Portuguese charity. Following this ruling, the UK's chancellor announced that Britain's legal definition of 'charity' would be broadened to include some organisations in other EU states, thereby giving UK-based donors access to tax breaks on cross-border giving.
Donations to foreign organisations are not tax deductible in many non-EU and non-EEA countries, so be sure to get in contact with your government's advisory service and find out what the rules are in your area.
Once you've come up with a short list of causes and organisations, you might want to factor exchange rates into your final decision. Your donation will stretch much further (and vice versa) if the currency you're using is strong in relation to that used in a charity's host country. Our handy money comparison tool can be helpful if you don't know where your money stands in comparison to other states' currencies.
If you get to the end of this process and are uncertain about the best ways to transfer money overseas or simply want to know more about international finance, check our blog frequently to keep up to date on the latest trends.