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Removing Obstacles to Cross-Border Philanthropy; The Time Is Now

Legal, fiscal and administrative barriers still limit European cross-border philanthropy.

Publication date: 4 Jul 2024

Philea and Transnational Giving Europe have recently published a collection of case studies about the 6 major obstacles to cross-border philanthropy. “Removing Obstacles to Cross-Border Philanthropy; The Time Is Now” urges the EU to take further steps to facilitate cross-border donations.

The 6 barriers to Philanthropy:

The European philanthropy sector counts 186,000 organisations with an annual expenditure of over 54.5 billion and a million of donors. Despite this and the contribution of $16 billion in cross-border philanthropic outflows, the sector remains challenged by administrative, legal and fiscal barriers.

  1. Discriminatory tax treatments and complex procedures. European tax-systems pose a real challenge to donors and organisations when it comes to donations and allocating assets abroad tax-effectively.
  2. Difficulties in accessing banking services. Organisations have seen their attempt to open a bank account in a foreign country being met by closed doors and reticence. They have also reported bank’s transfer delays of charitable donations to foreign organisations.
  3. Lack of legal recognition of foreign organisations. Foreign organisations are required to open a branch in the respective country before being able to enter into contracts. Complying with different legal requirements regarding fundraising has also lead organisations to end projects in some countries.
  4. Impossibility of cross-border merger of foundations. The EU and most European states lack of a regulation on cross-border merger forcing philanthropic organisations to looking for other ways to finalise the process.
  5. Burdensome process to transfer seat or perform conversion cross-border. Philanthropic organisations cannot shift headquarters across borders due to a lack of regulations both at EU and at state level.
  6. Restriction on foreign fundings. The foreign funding agent restriction is a legal requirement to register as foreign-funded organisations leading to a stigmatisation of their fundings and activities.

The way forward

Despite the considerable barriers, the latest policy developments give some hope. The European Commission has adopted in June 2023, a previous proposal for a Council recommendation on developing social economy framework conditions. European states taxation framework, non-discriminatory taxation of charitable organisations and donors are also discussed in two annexed documents.

Download the report here: Removing Obstacles to Cross-Border Philanthropy; The Time Is Now