Beyond political risk: why US philanthropies restructure globally

In brief

The US regulatory and political landscape for civil society organisations is more volatile and uncertain than at any point in the past two decades.
Feeling exposed, many US-based philanthropies – especially those in sensitive advocacy or rights-based sectors – are increasingly moving to internationalise their footprints.
The most forward-looking institutions recognise that international structuring offers more than protection against risk; it's a strategic investment in reach, legitimacy, efficiency and long-term resilience.
Mishcon's Impact practice supports US counsel in designing robust, mission-aligned, and internationally resilient structures for their clients.

Why are US philanthropies moving to restructure internationally?

US-based philanthropies face a policy landscape that is shifting in both tone and substance. Federal attention to civil-society organisations – particularly those involved in contentious or policy-adjacent activities – has sharpened. Cross-border grant-making is attracting new scrutiny. And the political discourse around foreign influence, international advocacy, and issue-based organising is becoming more charged.

This has understandably prompted boards, general counsel, and donors to consider risk mitigation measures, including diversification of regulatory exposure.

However, those who limit their response to protection alone risk missing the bigger picture. A dual-jurisdiction or international structure can also create material strategic advantages, such as:

Access to European philanthropic networks and institutions
Greater global credibility for cross-border advocacy
Enhanced donor confidence through diversified regulatory oversight
Operational continuity if US policy conditions fluctuate
Flexibility to run programmes or partnerships directly in Europe
Ability to receive grants from European institutions that prefer (or require) local entities
Access to UK Gift Aid and dual-qualified giving opportunities for global donors
Improved governance, risk management and institutional maturity

Who's under greatest pressure to move?

While all philanthropies are exposed to uncertainty, some are disproportionately affected by funding insecurity, reputational risk, political targeting, or regulatory volatility. These include:

Advocacy, human rights and democracy-related organisations
Climate, environmental and energy transition groups
Migration, refugee support, and border-related nonprofits
Racial justice, equity, diversity and inclusion (EDI) and civil rights organisations
Women’s rights, reproductive health and gender-based advocacy groups
Tech and privacy rights organisations, especially those challenging state use of data and surveillance
Groups engaging in strategic litigation, impact litigation or test case development
Any NGO receiving material foreign contributions or partnering with foreign governments, universities or international networks

For these organisations, a stable jurisdictional foothold – with strong governance, regulatory credibility and operational capacity – is not a luxury; it is a buffer essential to mission continuity.

Key pressure points include:

Donor-advised fund (DAF) regulations and foreign grant-making uncertainty

Proposed changes to DAF regulations, as well as policy discussions concerning foreign grant-making, create strategic uncertainty. More scrutiny, more documentation, and potentially more restrictive structures may be on the horizon.

IRS enforcement focus

Recent guidance reiterates strict compliance expectations around:

Expenditure responsibility
Foreign equivalency determinations
Multi-tiered grant-making
Lobbying and political activity boundaries
Anti-money laundering (AML) and counter-terrorism compliance

Even technically compliant structures can become reputationally sensitive.

Political pressure on certain programmatic areas

Organisations operating in the sectors listed above – rights, climate, democracy, migration, etc. – face disproportionate exposure. For them, an international structure is not a political statement; it's prudent risk diversification.

What does the UK (and Europe) offer them?

New interest in the UK isn't just a reaction to US politics; it's an opportunity to build stronger, more agile philanthropic institutions for the long term by taking advantage of:

A familiar, predictable legal and regulatory regime

The UK provides a familiar legal culture and predictable regulatory regime, including:

A common-law environment
A Charity Commission that is independent, transparent and predictable
HMRC processes well understood by international advisers
A strong, globally connected banking sector
Experienced trustees and advisers familiar with transatlantic structures

New funding opportunities and networks

A UK entity can unlock new funding opportunities and networks, including:

Access to European philanthropists and foundations
Eligibility for UK and EU grant programmes
Alignment with global issue-based coalitions
Legitimacy with international partners who may hesitate to engage with purely US-incorporated entities

Operational symmetry and tax efficiency

Dual-qualified structures offer US and UK taxpayers the opportunity to benefit from:

US tax deductibility
UK Gift Aid and UK tax reliefs
Regulatory alignment for seamless grantmaking
A single governance framework supporting operations on both sides of the Atlantic

This is attractive both for individuals (especially globally mobile families) and institutions with international donor bases.

UK governance expectations

Far from being burdensome, UK governance expectations – independence, clear purpose, transparent oversight – can also strengthen donor confidence, enhance reputational resilience, and improve institutional longevity.

Organisations that embrace this governance culture often find that it deepens institutional credibility and expands partnership opportunities globally.

What opportunities can international structuring create?

Beyond improved resilience, additional concrete advantages include:

Enhanced global advocacy and policy influence

A UK or European platform allows NGOs to engage:

EU institutions
UN human-rights bodies
pan-European policy networks
global coalitions and strategic litigation consortia

This can materially expand influence beyond the US policy environment.

Diversified donor pools and revenue streams

Operating in multiple jurisdictions allows philanthropies to:

Raise funds from UK and European donors
Receive EU and foundation grants unavailable to US-only entities
Structure long-term endowments in stable, predictable jurisdictions

Operational continuity and crisis insurance

If an organisation’s ability to operate in the US becomes constrained – politically, financially or regulatorily – an international platform ensures that:

Work can continue uninterrupted
Resources remain accessible
The mission does not depend on one jurisdiction’s political climate

Programme delivery efficiencies

For organisations working globally (e.g. on migration, human rights, or climate issues), a UK base can:

Reduce administrative barriers
Improve regional coordination
Facilitate recruitment and partnerships

Governance modernisation

Cross-border structures often catalyse improvements in:

Board composition
Compliance frameworks
Reporting
Risk assessment
Transparency

These improvements are increasingly demanded by sophisticated donors.

How Mishcon de Reya can help

Combining lawyers, former regulators, trustees and sector specialists, our Impact practice is seeing a growing number of requests for advice and support from US philanthropies and the firms who represent them.

Partnering closely to ensure seamless coordination with US tax law, foundation rules, DAF requirements etc, we support US law firms, foundations, philanthropists and nonprofits on a wide range of matters, including: