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Charitable giving has been a way of life for millions of people across the globe. The reason may range from humanitarian and philanthropic in nature to religious reason and for some even tax benefits. When you give to domestic charities you have a hold, at least to a certain level on the legitimacy of spend but when giving out to international charities you must make informed decisions. There have been instances where money donated for a good cause has been misused to promote negativity like terrorism.

Before giving out to international charities it is important to research their programs for

-    Appropriate objectiveness
-    Design methodology
-    Relevance of the projects within the community
-    Are the projects practically achievable
-    Are the funds and the organisation being managed in a professional way
-    Are the outcomes sustainable

Projects undertaken by international aid organizations may be broadly classified under the following categories

-    Education and vocational training
-    Health
-    Agriculture and rural development
-    Supporting disadvantaged groups
-    Income generation
-    Ethnic minorities / marginalized groups

Tax Deductibility on international charities in Australia

Australian donors can avail tax benefit for donations made to overseas activities. This has been enabled by DFAT – Department of Foreign Affairs and Trade and ATO – Australian Taxation Office. Called OAGDS – Overseas Aid Gift Deduction Scheme, this enables for tax deduction by Australian donors. However the government regulations concerning tax deductibility are quite complex and you may need professional help to deal with this. Here are a few guidelines that may help.

The funds you donate must be allocated to specific project of overseas aid. Giving out general gift to the aid organization overseas may not be accountable for tax deductibility. According to DFAT rules any project you want to donate for tax benefit reasons should relate to emergency relief or development (not welfare). Tax deductibility applies to only the countries that have been declared as developing under the DFAT rules. There must be a proper project proposal completed and submitted for projects that meet the criteria.

For an individual or a company to be doing all this research may be a cumbersome job and sometimes just a waste of time. There are professionals who can help you decipher these codes and make giving international charities not such a difficult deal after all. There are also many local charity aid organizations that work with international organizations. You can also donate through such outlets. Whoever you donate to and whatever amount you donate, make it a point to collect all the relevant documents as you need to submit them to claim tax benefits.