Introduction

Cross-border philanthropy operates within a dense and continually evolving regulatory landscape shaped by global standards, national legal frameworks, and sector-specific expectations. Grantmakers engaged in international activity must manage overlapping obligations related to anti-money laundering and counter-terrorism financing, sanctions compliance, tax law, governance, and transparency, often across multiple jurisdictions simultaneously. These requirements are increasingly risk-based, data-driven, and enforcement-oriented, raising the stakes for effective due diligence and ongoing oversight.

This article examines selected core regulatory questions that shape contemporary cross-border philanthropic practice, with a comparative focus on the United States, the European Union, the United Kingdom, Canada, Switzerland, and Australia. Rather than providing an exhaustive legal survey, it highlights points of convergence and divergence across regimes, the influence of global standard-setters such as the Financial Action Task Force, and the practical implications for grantmakers seeking to operate responsibly, compliantly, and at scale in an increasingly scrutinized international environment.

Global Standards: The Role of FATF

At the core of the international regulatory environment lies the Financial Action Task Force (FATF), whose 40 Recommendations underpin most AML/CTF (anti-money laundering, counter-terrorism financing) frameworks globally. Since 1989, these recommendations have driven the development of local laws, demanding rigorous due diligence practices, robust documentation of beneficial ownership, heightened scrutiny for high-risk activities, and strict compliance with international sanctions lists. As of 2025, FATF maintains both a “grey list” of countries under monitoring and a “black list” for jurisdictions such as North Korea, Iran, and Myanmar, where systemic deficiencies continue to present heightened financial crime risk. 

The expectations for philanthropy are especially nuanced: FATF’s Recommendation 8 recognizes that nonprofit organizations can be misused for terrorism financing, but it explicitly calls for focused, proportionate, and risk-based measures rather than blanket restrictions on the sector.  The standard stresses that only those NPOs that fall within the FATF definition and exhibit elevated terrorism financing risk should be subject to enhanced oversight, and that controls must not unduly disrupt or discourage legitimate charitable activity.  For grantmakers, this translates into a disciplined risk-based approach, where due diligence, monitoring, and documentation are scaled to the specific risk profile of the grant, geography, delivery channel, and partner organization, rather than applied as one-size-fits-all compliance.

United States: Dual Paths and Deep Scrutiny

Within the US, cross‑border grantmaking by private foundations or Donor Advised Funds (DAFs) is often described as a two‑track system: when granting directly to foreign organizations, foundations typically rely on either Equivalency Determination (ED) or Expenditure Responsibility (ER) to ensure their grants are treated as qualifying distributions rather than taxable expenditures.  ED is a good‑faith process through which a qualified tax practitioner reviews the foreign grantee’s governing documents, financial information, and public support data to determine whether the organization is the equivalent of a U.S. public charity under sections 501(c)(3) and 509(a), a conclusion that usually rests on detailed documentation similar to what U.S. public charities must maintain.  When ED is not obtained, a foundation instead exercises ER: it conducts an appropriate pre‑grant inquiry, enters into a written grant agreement restricting the funds to specific charitable purposes, requires that the grant be maintained as a separate fund devoted to those purposes, obtains periodic narrative and expenditure reports until the grant is fully spent, and reports the grant and its oversight on Form 990‑PF.

Sanctions compliance under the Office of Foreign Assets Control (OFAC) requires effective screening and internal controls. Civil penalties may be imposed even when violations are unintentional, while substantially heavier fines and, in serious cases, criminal charges apply when violations are knowing or particularly egregious. In practice, this requires grantmakers to screen counterparties and key principals against relevant United States sanctions lists and, where appropriate, international sanctions lists, and to document how potential matches are reviewed, cleared, or escalated.

Grantmakers must also address Foreign Corrupt Practices Act (FCPA) risk, particularly where grantee leadership or counterparties include government-linked officials. This includes systematically assessing for Politically Exposed Persons (PEPs) within governance and senior management as a core component of anti-bribery controls and the identification of corruption vulnerabilities.

In parallel, the Financial Crimes Enforcement Network’s (FinCEN) beneficial ownership regimes, which require many legal entities within the financial system to identify or report individuals who own or control 25 percent or more of an entity, as well as those exercising substantial control, have raised expectations for transparency. Sophisticated foundations increasingly mirror these standards in their own due diligence on intermediaries and complex grant structures.

Canada: Rising Accountability and Integration

Canadian philanthropy is shaped by FINTRAC (the Financial Transactions and Reports Analysis Centre of Canada) and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTA), which together establish broad AML/CTF standards. Beyond banks and formal financial actors, these rules increasingly apply to donation intermediaries and, under certain conditions, to charities—especially those handling significant international flows, engaging in cash transactions, or operating in high-risk jurisdictions. Canadian grantmakers are also subject to Canada Revenue Agency (CRA) governance, requiring detailed documentation to prove “direction and control,” ensure grants advance recognized charitable purposes, and maintain firm boundaries between permissible charitable activity and prohibited political advocacy. When cross-border grants intersect with the interests of US donors, the requirements of the Canada-US Tax Treaty may require foundations to maintain documentation that satisfies both countries’ revenue authorities, all while adhering to growing expectations about beneficial ownership and risk monitoring.

The European Union: Convergence and Complexity

The EU is in the midst of regulatory consolidation, with the 6th Anti-Money Laundering Directive (6AMLD) and an associated AML Regulation (AMLR) creating standardized rules for all 27 member states. These reforms establish harmonized predicate offenses, corporate liability for AML/CTF violations, intensified beneficial ownership transparency at a fixed 25% threshold, and enhanced bank and securities registries. Most notably, the new European Anti-Money Laundering Authority (AMLA), operational since 2025, coordinates enforcement and offers direct supervision for the EU’s largest financial institutions, fostering cohesion that was previously elusive. Nonprofits in the EU are not universally classified as “obliged entities,” but banks and cross-border funders expect documentation and practices comparable to those applied to financial sector actors. GDPR (the General Data Protection Regulation) governs all personal data processed within compliance activities, from PEP screening to beneficiary vetting, mandating strict standards for privacy, data minimization, and transparency in all due diligence work.

Despite EU efforts to harmonize, variations persist in how member states define comparability for public-benefit status and donor deductibility, particularly in the legal recognition of foreign equivalents. Foundations must compile and maintain comprehensive documentation to establish that their foreign grantees would be recognized as public-benefit entities at home, or work through designated intermediaries.

The UK: Post-Brexit Oversight and Charity Law

Since Brexit, the United Kingdom has maintained practical alignment with European and FATF principles while asserting its own sovereign regime through four principal charities regulators: the Charity Commission for England and Wales, the Scottish OSCR, the Northern Ireland Charity Commission, and HMRC. UK charitable law expects grantmakers to undertake thorough due diligence on all international grants, demonstrate a clear advance of charitable purpose, and maintain financial controls sufficient to ensure proper fund use. Advisory materials and recent Charity Commission reports stress documented pre-grant inquiries, formal written agreements, real-time monitoring, clear record-keeping, and robust conflict-of-interest management. Serious failures in these areas are subject to either administrative enforcement by charity regulators or, in more severe cases such as fraud, criminal prosecution.

Switzerland: Minimal State, Maximum Peer Governance

Switzerland presents a unique case, focusing on self-governance and flexibility. The Swiss Foundation Code, a system of best-practice guidelines established and updated by sector peers, emphasizes independence, transparency, professionalism, and accountability within grantmaking foundations. There is no centralized or federal supervisory authority; instead, oversight varies by Canton, resulting in significant variability across the country. Amendments in 2024 further empowered founders to adapt and modify their foundations, decreasing barriers to formal amendments and making the Swiss model one of the world’s most permissive legal environments for philanthropy. However, global banking partners and international counterparts increasingly expect Swiss entities to harmonize their due diligence, KYC, and beneficial ownership practices with standards emerging from the EU, US, and FATF. Foundations seeking to access cross-border funding or engage major partners are thus well advised to meet or exceed those external expectations.

Australia: National Integration and Compliance

Australia’s approach is characterized by its unification of registration, reporting, and AML/CTF compliance through the ACNC and AUSTRAC. The ACNC register is a public resource, enabling anyone to verify an Australian charity’s financial and governance status, while AUSTRAC requires those engaged in international work (especially larger foundations or those sending money abroad) to implement risk-based compliance strategies, document beneficial ownership, and adhere to escalating review and documentation where risks or amounts increase. This dual system creates a transparent, standardized national landscape for grantmakers and increases interoperability with global compliance demands.

Areas of Convergence and Difference

These six jurisdictions share notable regulatory convergence. All require risk-based screening. Nearly all have intensified beneficial ownership requirements, now harmonized at 25% in most cases, and all demand rigorous sanctions compliance and increasingly robust documentation. Compliance is not one-size-fits-all: the amount, complexity, location, organizational history, and sector-specific risk shape exactly how much screening and monitoring is required. However, divergences remain significant. The depth and accessibility of beneficial ownership registries, the legal recognition of public-benefit entities, approaches to enforcement, and the tax treatment of cross-border gifts still vary, compelling organizations to maintain agile compliance functions and consult local expertise as needed.

Sector and Regulatory Trends

As regulatory technology advances, compliance tools—from multi-source sanctions screening to AI-powered adverse media alerts—are becoming standard practice in sophisticated foundations. Increasingly, regulators are examining not simply whether paper records exist, but whether oversight and monitoring protocols truly scale with risk. In the EU, as AMLA expands its direct supervisory reach, and in North America as both US and Canadian authorities intensify beneficial ownership enforcement, compliance officers will need continuous professional development and active engagement with sector peers to keep pace. Meanwhile, philanthropic organizations operating across borders are also expected to maintain awareness of the evolving impact of cryptocurrency, digital assets, and new modes of payment, all of which are rapidly being absorbed into the global AML/CTF framework.

Conclusion

International grantmaking in 2025 is simultaneously more standardized and more complex than ever. Across geographies, FATF-driven rules serve as a universal touchstone, while local law and regulator priorities ensure that effective compliance demands jurisdiction-specific attention and continual adaptation. Highly effective philanthropic organizations incorporate continuous learning, maintain comprehensive documentation, engage legal and compliance experts, and participate actively in peer networks to stay ahead of both risks and regulatory expectations. The outlook for global giving is positive: while the compliance burden is non-trivial, the growth of sector-specific best practices, digital transparency, and risk-based approaches is making responsible and impactful international philanthropy more accessible and sustainable than ever before.