tax and charity to a future non-profit organization case

Hello, what is the opinion or advice one can provide for this tax and charity case study: A US-based American citizens couple plan to open a non-profit organization (a healthcare clinic or an orphanage) when they retire in 25 years in a foreign country (Mexico or SE Asia). They plan to contribute $10,000 annually beginning now to some sort of fund/trust/ foundation that accumulates over the next 25 years. The money will use to build and run the non-profit organization in the chosen foreign country. In addition, they may have donated funds from others in the US over time to help fund this cause. Obviously, the donors would like to have a tax deduction allowance in their returns. Question: Does the current US tax laws allow them to write-off the $10,000/yr as a tax deductible to a charity trust/fund? Option: If needed, the couple can use invest the $10,000/yr to buy the land or assets at that foreign country until it's mature in 25 years and convert it into the non-profit organization by selling those assets. Or they can build the skeleton non-profit organization now and expand it over the years as funds arrive annual. Thanks

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We don't have enough information to give a detailed answer, so the following is a generalization. Until there is an actual operating charity, the best you are going to be able to do under US tax law is to set up a foundation. The foundation would need to secure its own tax exempt status with the IRS. During the time that it is accumulating rather than operating, the foundation will be required to pay out approximately 5% of its assets each year to charitable organizations that are operating and that are publicly supported. Once the foundation switches into its operating phase, it can apply to the IRS to be reclassified as a "private operating foundation", which will eliminate the 5% payout requirement. The fact that the charity plans to operate abroad creates additional potential US tax problems. The IRS is hesitant to grant tax exemptions to organizations that plan to operate exclusively outside of the US.

--Chris