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Contractor bill format in word for non-profit organizations

operating a nonprofit in a foreign country is well rather complex it can involve multiple government agencies and be fraught with pitfalls that can only be avoided if you understand the rules and if you're like many of our clients who operate abroad getting it right matters a lot so let's jump in and see how it all works [Music] hi i'm greg mcrae founder and ceo of foundation group and welcome to our 501c3 university channel our company foundation group has worked with thousands of 501c3 organizations with activities in foreign countries and each situation is different first it's important to understand what type of activities being conducted the government agencies involved and the necessary procedures required to stay compliant for example will your non-profit be conducting activities in a foreign country or giving money to a foreign charity or both regardless of the answer you will be working not only to satisfy the irs but you'll also be accountable to more specific u.s treasury requirements you may also be accountable to foreign governments as well so let's take a look at a few of these scenarios so first let's talk about direct foreign activity i'm talking here about a us charity conducting work on the ground in a foreign country this might involve u.s citizens living in and operating the program in a foreign country or it could be a program fully staffed by foreign nationals or accommodation of the two as far as the irs is concerned it's really no different than operating domestically your activities must satisfy an exempt purpose and you must stay compliant with applicable regulations and stay current on your filing requirements like form 990. where it gets more complicated is with the other country let me tell you there's a big range of possibilities here some foreign countries will let us charities operate with virtually no oversight or accountability as long as you're legally in their country the government pretty much leaves you alone well that's one end of the spectrum on the other end some countries require you to register a charity often called an ngo or non-governmental organization in their country all financial transactions in that country must be run through that entity this is very common in african countries though they are not the only ones the irs typically ignores the foreign ngo and expects you to consolidate the activity onto one form 990 for reporting purposes that is so long as the ngo is really under the complete control of the us charity and you formed it only to satisfy the other country's requirements the third extreme with direct activity involves countries that prohibit u.s organizations from operating now i encountered this personally a few years ago my family had sponsored a little girl in india named sapramika through compassion international for years well india passed a law banning u.s religious nonprofits from operating in india in compassion international along with many other u.s charities cut summarily booted from there and we lost contact with our sponsored child now their country their rules right well of course but the moral of the story is if you're going to operate a us charity in a foreign country understand that you're at the mercy of the laws of that country welcome one day and out the next so what about a u.s charity simply granting money to a foreign charity one that is not operated by the u.s nonprofit now this may seem straightforward on the surface but it is actually treated with greater scrutiny by the irs than direct activities and the reason for that is that the us charity isn't the one ultimately spending the money but the us charity has a fiduciary responsibility there's that word again to ensure the money is spent on acceptable charitable purposes it can't just be a conduit for cash to a foreign entity so how do you keep up with that for starters a us charity should always require a grant application from the foreign charity before it gives money to it now this isn't a legal requirement but it is a best practice a grant application requires the foreign charity to state up front what it intends to use the money for allowing the u.s organization to pre-vet the purpose later the foreign charities should be required to report back to the u.s granting organization exactly how it spent the money closing the loop on the whole deal the u.s charity won't report the foreign charities expenditures to the irs but it should keep the documentation for due diligence purposes there's one more scenario that is far less common and that is conducting a 501 c 3 equivalence exam on the foreign charity now that's a complicated process that is way beyond the practical ability of smaller u.s charities and it's also beyond our time limits today but i at least wanted to mention it one more thing we'll mention here and that's what's called ofac or the office of foreign assets control as explained on the department of treasury's website the office of foreign assets control or ofac of the u.s department of treasury administers and enforces economic and trade sanctions based on u.s foreign policy and national security goals against targeted foreign countries and regimes terrorists international narcotics traffickers those engaged in activities related to the proliferation of weapons of mass destruction and other threats to the national security foreign policy or economy of the united states in a nutshell ofac determines where you can and cannot go and who you can and cannot work with the us department of state has currently identified the following countries as state sponsors of terrorism cuba north korea iran and syria this designation requires specific licenses from ofac that must be approved prior to any activity being conducted other countries are on the olfact list for other reasons countries such as russia myron mar venezuela and others the list changes all the time know before you go and know before you give there's so much more that could be said we've only scratched the surface of what it means for a u.s nonprofit to have activity in a foreign country but i hope this brief foray into the topic has made you aware of some things you need to know operating in a foreign country is not easy and it takes way more than just making sure your passport is current i hope you liked this video please hit the like button if you did doing so helps youtube know how to recommend this to other viewers subscribe if you haven't already and be sure and click the little bell icon to be notified of new content when we post it thanks for watching and we'll see you next time [Music] you