Receiving US tax-deductible donations as a Dutch nonprofit
Receiving US tax-deductible donations as a Dutch nonprofit
This article is for Dutch nonprofits that want to accept donations from US-based donors who also want a US tax deduction. It covers 6 options, pros and cons.
Does a foundation have to be incorporated in the US to make donations tax-deductible for US donors?
No, but there are several paths to make it possible without necessarily setting up a US entity.
First, it's important to know that Dutch ANBI status does not help here: ANBI is a Dutch designation and only creates tax benefits under Dutch law. A US donor giving to a Dutch ANBI cannot claim a US federal income tax deduction, regardless of the organization's charitable mission.
Under US tax law, only donations to organizations recognized by the IRS as tax-exempt under Section 501(c)(3) are deductible on a US tax return. Incorporating in the US as a 501(c)(3) is the most comprehensive solution, but also the most complex and expensive.
Several lighter alternatives exist that may suit early-stage or smaller organizations better — see the options below.
Key concept: Equivalency Determination (ED)
Before a US grantmaker (such as a DAF sponsor, private foundation, or intermediary like CAF America) can legally grant to a foreign nonprofit, US tax law requires them to verify the organization is the equivalent of a US public charity. This is called an equivalency determination (ED).
NGOsource (a project of TechSoup) centralizes this process. A foreign nonprofit completes one ED through NGOsource, which can then be shared with dozens of US funders, rather than each funder paying lawyers to conduct the same check independently. Getting an NGOsource ED is often a smart early step for any nonprofit expecting US grants. Note that EDs expire annually and need to be renewed.
The organization registers as a nonprofit corporation in a US state and applies to the IRS for 501(c)(3) status. US donors can then donate directly and claim the deduction.
Pros: Full control, no intermediary fees per donation, can open a US bank account, most recognized by donors.
Cons: Significant setup cost (legal fees, IRS filing fee, state fees), takes 3–12 months, requires ongoing US compliance (annual Form 990, state filings), and means running two legal entities in parallel.
Best for: Organizations expecting significant, recurring US fundraising over the long term.
A "Friends of" org is a US 501(c)(3) specifically set up to support a single foreign nonprofit. US donors give to the American entity, which then grants the funds to the foreign organization.
Pros: Purpose-built for cross-border giving; donors give directly to a US charity.
Cons: The US entity must be legally independent — it cannot simply be a pass-through. It needs its own board (minimum 3 members), bylaws, IRS 501(c)(3) application, and must exercise genuine discretion over grants. If the IRS views it as a conduit, it can revoke the status. Similar complexity to a full 501(c)(3).
Best for: Established foreign nonprofits with a clear US donor base large enough to justify the overhead.
CAF America (Charities Aid Foundation of America) is a US 501(c)(3) that vets foreign nonprofits and processes donations on their behalf. A US donor gives to CAF America, which then grants the funds to the vetted foreign organization.
How it works:
The foreign nonprofit submits documentation for vetting: CAF America conducts an equivalency determination (ED) to confirm the organization is the equivalent of a US public charity
Vetting takes approximately 4–6 weeks
Once vetted, US donors can donate to CAF America earmarked for your organization
CAF America charges fees: typically around $400–500 per new vetting relationship, and a percentage of each grant
Pros: No need to set up a US entity; relatively fast to start; widely accepted by US donors and donor-advised funds.
Cons: Per-transaction fees; CAF America holds legal control over funds until they grant; vetting must be renewed periodically.
Best for: Organizations needing a faster or lower-overhead path to US tax-deductible giving.
A Donor-Advised Fund (DAF) is a US charitable account where a donor deposits money, gets an immediate tax deduction, and then advises grants to charities over time — including foreign ones. These are held by organizations like:
US donors who already use a DAF can often grant to foreign nonprofits through it, provided the DAF sponsor has an equivalency determination (ED) for the foreign organization. Obtaining an NGOsource ED in advance significantly speeds this up: DAF sponsors can use an existing NGOsource ED instead of commissioning their own research.
Pros: If a donor already has a DAF, this can be a low-friction path with no setup required on the nonprofit's side.
Cons: The nonprofit has no control over which DAF sponsor a donor uses; each DAF sponsor has its own vetting process and fees. Not all DAF sponsors will grant internationally.
Best for: When a specific major donor already has a DAF and is ready to give — worth facilitating case by case.
Giving What We Can operates a US 501(c)(3) entity (EIN 93-3629215) and routes donations to effective charities on behalf of donors worldwide, including US donors. If your organization is on their platform or approved by them, US donors can give through GWWC and receive a US tax deduction.
Pros: Low friction for donors already in the EA ecosystem; no setup required for the nonprofit beyond being listed.
Cons: Only viable if your organization is eligible for and listed on GWWC; less suitable for organizations outside the EA-aligned space.
Best for: EA-adjacent nonprofits whose donors are already familiar with GWWC.
Donation swapping is an informal peer arrangement common in the EA community. Two donors in different countries agree to each donate to the other's preferred organization — each in their own country, where the donation is tax-deductible. The net effect is that both charities receive roughly the same funding as if the donors had given directly, but both donors get a tax benefit.
Example: A US donor wants to support a Dutch org. A Dutch donor wants to support a US 501(c)(3). They swap: the US donor gives to the US entity, the Dutch donor gives to the Dutch entity. Both get their local tax deduction.
Pros: No legal infrastructure needed; immediate; works well within the EA community where matching partners are easier to find.
Cons: Informal and not scalable; requires finding a willing swap partner; the IRS could view this as a "quid pro quo" if poorly documented; not suitable for large or one-sided funding relationships.
Best for: Individual donors giving smaller amounts, or early-stage organizations testing US donor interest before investing in infrastructure.
This article is for orientation only and is not legal or tax advice. For specific situations — especially if you're considering setting up a US entity or "Friends of" org — consult a US nonprofit attorney.