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§ 18.4 CONTROL OVER FOREIGN DONEESdetermine whether the ultimate recipient of the contribution is a qualifyingorganization. . . . Moreover, it seems clear that the requirements of . . . [thefederal tax law] would be nullified if contributions inevitably committed togo to a foreign organization were held to be deductible solely because, in thecourse of transmittal to the foreign organization, they came to rest momentarilyin a qualifying domestic organization. In such cases, the domestic organizationis only nominally the donee; the real donee is the ultimate foreignrecipient. 19Thus, the problem of earmarking that arises when the American donee organizationacts as a conduit for the American donor is resolved when the Americanorganization exercises meaningful discretion and control as to the ultimate use ofthe contributions.An important test in this regard is who solicited whom: Did the individualtaxpayer seek out the recipient organization’s cooperation to facilitate applicationof the funds to a designated project, or did the American donee organizationseek the donor’s support of a project identified by the organization? Whenthe recipient charitable organization designates the overseas use of the funds,the donor’s contribution produces an allowable deduction. The donor maychoose from among overseas uses presented as options by the charitable organization.However, when the donor identifies a desired overseas use, and employsthe charitable organization as a funding agent or conduit, the gift is not allowedas a charitable deduction to the donor.The IRS, in its private letter rulings, is attempting to add another criterion inthis context, which is that the grantor of funds is expected to undertake someform of expenditure responsibility. (The IRS cannot go too far in this regard, however,in that Congress has imposed expenditure responsibility requirements onlyon private foundations. 20 ) For example, in one of these rulings, the IRS observedthat the board of directors of the grantor organization was to “review” and“monitor” the use of the granted charitable funds. 21 In another private ruling,the IRS wrote of a requirement of “periodic accounting” for the monies granted;in this ruling, the IRS found the requisite control, in part because of a monitoringprocedure. 22 Monitoring is also mentioned in other private letter rulings. 23 Sincethis series of private letter rulings began, the IRS has mentioned the control elementas the singular factor on only one occasion. 24§ 18.4 CONTROL OVER FOREIGN DONEESThe IRS clarified the matter of what constitutes adequate control of the donatedfunds. 25 This ruling discussed a situation in which a domestic charitable organizationsolicited contributions in the United States for a specific project of a foreigncounterpart organization. The charity’s charter provided that, in furtherance of itseducational, scientific, and charitable purposes, it had the power to receive and to19 1963-2 C.B. at 104.20 IRC § 4945(h). See Private Foundations § 9.6.21 Priv. Ltr. Rul. 8839029.22 Priv. Ltr. Rul. 8714050.23 See, e.g., Priv. Ltr. Rul. 8408051.24 Priv. Ltr. Rul. 8408054.25 Rev. Rul. 66-79, 1966-1 C.B. 48. 553