Yes, it is possible to fundraise internationally for a cause or project. However, there are some key factors to consider when fundraising across borders. In this comprehensive guide, we’ll explore if and how you can legally fundraise globally, the requirements and regulations, as well as tips for running an effective international fundraising campaign.
Is it legal to fundraise internationally?
The short answer is yes, it is legal for charities, nonprofits, social enterprises, and individuals to fundraise across borders and accept donations from foreign countries in most cases. However, the regulations, requirements, and restrictions vary significantly depending on the country or platform you are fundraising through.
Generally speaking, most countries allow foreign entities or individuals to fundraise as long as they follow local laws and regulations. The two key factors to consider are:
- Fundraising regulations in the country you are located in (where the fundraising originates)
- Fundraising regulations in any countries you want to raise funds from (where donors are located)
Both sets of laws need to be followed to legally run a global fundraising campaign. Some key fundamentals across most countries include:
- Registering as a charity or nonprofit in your own country
- Abiding by fundraising, charity, and taxation laws
- Providing financial and activity reporting
- Issuing donation receipts
However, always check the specific laws for any country you wish to fundraise in. Some countries prohibit foreign fundraising entirely unless certain requirements are met. Others have strict registrations and may audit international charities raising funds locally.
Common fundraising regulations
While regulations vary significantly, some requirements are common across many countries:
- Registration or notification – Many countries require foreign charities or fundraisers to formally register or notify local authorities before starting local fundraising activities.
- Permission-based fundraising – Some countries require prior approval or licenses for any public fundraising. This may restrict options to online or invitation-only fundraising.
- Local bank account – Opening a local bank account may be required to receive or withdraw donations from a country.
- Financial reporting – Submitting financial reports on donations received or how funds are used is often required.
- Activity reporting – Reporting on operations and activities in a country may also be required.
- Taxation – Rules regarding payment or exemption from local taxes or duties on donations received internationally.
Be sure to research the latest fundraising regulations in each country you intend to raise funds from. Failing to follow requirements could lead to your campaign being shut down, fines, or other penalties.
Do I need to set up a local entity?
In some countries, you may need to establish a local entity or subsidiary to legally fundraise. This is more common when fundraising within a country regularly or on a large scale. Reasons you may require a local entity include:
- Needing a registered address, business number, or license to operate in the country
- Required for opening a local bank account to receive domestic donations
- Needed to file local taxes, financial reports, and other compliance
- Establishing a local entity for transparency and accountability
- Helps build relationships and trust with local stakeholders
Examples of establishing a local entity include:
- Registering a local branch, chapter, or subsidiary of your existing organization
- Partnering with a local organization and establishing a joint venture
- Incorporating a company or local nonprofit in the country
Seek legal and tax advice to choose the best entity structure. Also factor in the costs and administrative requirements of setting up and maintaining the local entity.
How can I legally receive international donations?
Once fundraising regulations are met, you also need to consider how to legally and efficiently receive international donations:
Online donations
Online fundraising platforms like GoFundMe, JustGiving, or Kickstarter make it easy to receive global donations. The platforms handle compliance, payouts, and currency conversion. Popular globally, they allow donors to easily contribute from almost any country.
Bank transfers
Wire transfers allow direct donations to your bank account from abroad. Ensure your bank account accepts foreign currency deposits. Be aware of any transaction fees or poor exchange rates some banks may charge.
Local bank accounts
Opening local bank accounts in your target countries streamlines receiving donations and improves transparency. You can directly receive domestic transfers and deposits from local supporters.
Payment processors
Payment systems like PayPal also enable international transactions and currency conversion. Donors from many countries can easily contribute using their existing accounts and saved payment methods.
Cryptocurrency
Receiving donations by cryptocurrencies like Bitcoin eliminates cross-border fees and simplifies exchanges across currencies. It also provides supporter anonymity and may help avoid some regulations.
Cash donations
In-person cash donations will likely be limited to your own country due to traveling with large cash sums across borders being restricted. But it remains an option for fundraising locally.
Tips for running an international campaign
If fundraising globally, keep these tips in mind for an effective and compliant campaign:
- Research relevant laws and regulations in all target countries.
- Register properly and complete all required reporting.
- Be transparent by highlighting your mission, activities, and reporting.
- Provide financial statements and show impact to build trust.
- Accept donations through major online platforms for convenience.
- Have a plan to cheaply convert and repatriate funds raised.
- Localize your messaging and marketing to connect with audiences.
- Partner with well-known groups in each country for credibility.
- Use images, videos, and stories showcasing those impacted locally.
- Utilize social media and local marketing channels to spread awareness.
Challenges of global fundraising
While fundraising globally provides expanded opportunities, key challenges to consider include:
- Compliance complexity – Navigating diverse regulations, registrations, reporting, and taxes across multiple countries.
- Tax implications – Determining any tax liabilities on funds raised from different countries.
- Money transfers – Getting donations cost-effectively from international sources into usable funds.
- Currency exchanges – Converting money raised into one common currency.
- Language & cultural barriers – Communicating effectively with diverse global audiences.
- Operational challenges – Managing complex, long-distance logistics and partnerships.
- Public trust – Overcoming skepticism of foreign organizations fundraising locally.
Thorough planning and local knowledge helps minimize these obstacles when fundraising globally. Seek professional legal and financial advice when needed throughout the process.
Alternatives to fundraising globally
If fundraising across borders seems too complex for your needs, some alternatives to consider include:
- Partnering with established groups already fundraising globally in the cause area.
- Focusing fundraising efforts only on your own country initially.
- Participating in collaborative global fundraising campaigns on issues like disasters or poverty.
- Running marketing campaigns to raise awareness globally rather than active fundraising.
- Focusing on impact and results rather than money raised across borders.
- Virtually supporting international projects through skill-sharing rather than financial contributions.
Conclusion
Fundraising globally introduces exciting opportunities but also key legal, financial, and logistical considerations. Take the time to thoroughly understand requirements in all countries you wish to fundraise from. With adequate planning and preparation, international fundraising can significantly support causes and organizations driving important global change.