For individuals as well as private, family, and public foundations, regulations governing U.S. contributions to Mexican organizations are fairly straightforward and set out in the U.S.-Mexico Tax Treaty of 1994.  According to the U.S. Internal Revenue Service, a U.S. donor (individual or corporation) may make a charitable gift to a Mexican registered nonprofit in direct proportion to their Mexican sourced income.  As such, U.S. expatriates working and living in Mexico can qualify for making charitable gifts that would be deductible against their U.S. taxes relative to their Mexican earned income. On the other hand, a U.S. retiree living in Mexico with U.S. sourced income (retirement or pension) could not deduct such a gift from their U.S. taxes.

While the U.S. IRS does restrict a U.S. individual donor’s ability to give directly to a Mexican nonprofit, such gifts may be made through a registered U.S. public charity like the International Community Foundation (ICF), which serves as an intermediary for the purpose of making charitable gifts abroad. For this reason, many individual donors, including those currently living in Mexico, find it useful to work with a philanthropic organization such as ICF for their Mexican charitable giving needs.

In the case of a charitable gift through an intermediary like ICF, the foundation in question must assure themselves that the grantee organization is equivalent to a 501(c)(3) organization in the United States, meaning that the organization has a charitable or educational purpose, it is legally constituted with a board of directors, that no organizational profits are distributed among board members, and that upon dissolution, all assets will revert to another 501(c)(3) organization. Since these requirements are almost identical to the Mexican legal requirements for an Asociación Civil, it is not difficult to establish this equivalency in most cases. Where this requirement cannot be fully met, a grant may be made so long as the organization is pursuing a charitable intent and the intermediary public charity in the United States exercises “expenditure responsibility.”