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The policies, politics and laws of doing good - from charity's global front lines to bottom lines.

Innovations in Diaspora Giving

February 8th, 2012 by Blake Bromley, Bio

While in San Francisco, I had dinner with Barnett Barron, a leader in global philanthropy whom I have known for decades. We’ve not only worked together in a variety of situations in various countries in Asia, we also collaborated in the U.S. when he had a leadership role in setting up guidelines to help charities comply with changes the U.S. government instituted for international grant-making after the introduction of the Patriot Act.  Last year Barnett became President of Give2Asia (G2A), .

In 1991, G2A was incubated by Asia Foundation to seek private sector funding for worthy projects. However, while G2A’s origins may be rooted in the desire to reduce dependence on government funding, it quickly established itself as an innovative leader in the world of international philanthropy.  Since its inception, G2A has spent a considerable amount of time and money fostering expertise and developing programming to assist in project design, due diligence and fund management, the purpose of which is to increase the effectiveness and impact of social programs based in Asia.

Much of G2A’s success has come from working with people who came to the U.S. from Asia to get an education or who emigrated due to political and social unrest in their native countries. Many of these immigrants, collectively referred to as the Asian Diaspora, have become successful and wealthy entrepreneurs who wish to contribute to social and educational programs in their countries of origin.  Over dinner, Barnett repeatedly emphasized to me that G2A had no future unless it genuinely added value to the process of translating the philanthropic ideas of the Asian Diaspora into meaningful projects in Asia. We talked about how much value successful immigrants bring to designing philanthropic programs back in their countries of origin because they understand the nuances and challenges of their cultures so much better than foreigners do.  G2A is a major innovator not only in providing alternatives to the Asia Foundation’s government funding but also in mobilizing the minds and the money of the successful Diaspora.

Soon after G2A was established in the U.S., members of the Asian Diaspora in Canada became aware of the sophisticated programs and services offered by the organization.  In response to this increased awareness and interest, in February of 2003, I incorporated and registered G2A as a charity in Canada. The Canadian entity could have adopted one of two different operating models.  One option was to spend the time and money necessary to replicate in Canada all of the knowledge and infrastructure developed by G2A’s American charity.  While this option would be more consistent with CRA’s administrative policies on foreign activities, it would also divert valuable resources from charitable projects in Asia.  The alternative was to take advantage of the knowledge and infrastructure already in place at G2A’s San Francisco headquarters and rely on the reciprocal provisions in the Canada – U.S. Tax Treaty that allow Canadians to give to American charities and vice versa. The Canadian entity chose the second model because it enabled donors to benefit from the American charity’s expertise and maximized the on-the-ground impact of each donated dollar by minimizing overhead in Canada.

In the benevolent sector, this type of strategic decision should be encouraged.  Charities should be allowed to streamline their operations and optimize donated dollars, especially in an economic climate that consistently pushes for charities to reduce overhead costs.  Unfortunately for G2A’s Canadian charity, Canada Revenue Agency does not allow that the reciprocal provisions in the Canada-U.S. Tax Treaty apply to charities despite the efficiency and innovation that it would bring to our own charitable sector.

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Categories: Charity, Compliance, People, Politics

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