The landscape for non-profit organisations, academic institutions, advocacy groups, and charitable enterprises in the US has recently seen dramatic changes. What was once considered a relatively stable and supportive environment for civil society has become increasingly turbulent. The current administration has vocally targeted the credibility and function of certain types of organisations, exacerbated by funding cuts and looming regulatory changes, all of which has helped to create a climate of uncertainty and risk.
This upheaval has obliged non-profits to consider alternative jurisdictions which offer a more stable and secure operating platform both from a funding and programmatic perspective. For many, the UK stands out as a compelling and strategically prudent alternative. Offering regulatory clarity, political stability, a deep talent pool and an internationally focused charity sector, the UK has a lot to offer US charities aiming to re-locate some or all of their operations.
What Is Happening in the US
The US non-profit sector has been subjected to intense scrutiny under the current administration. Perhaps the most significant development has been the drastic reduction in funding for international aid through the US Agency for International Development (USAID). Once the world’s leading provider of humanitarian aid, USAID has seen its funding slashed to less than 20% of what it was prior to the current presidency. This has crippled the operational capacity of some US non-profits working globally, especially where existing programs are being moved under the direct control of the State Department, better to align foreign aid with an “America First” agenda.
In parallel, American universities, have also come under political fire. Institutions that focus on research related to social justice, climate change, and international development have been accused of political bias, with some facing threats or actual withholding of federal funding. Billions of dollars in grants and contracts have been frozen or redirected, undermining the ability of higher education institutions to support external research initiatives, including those led by non-profit collaborators. The chilling effect on academic freedom has extended to non-profit beneficiaries, many of whom had previously relied on these partnerships for consistent funding and shared expertise.
Beyond funding cuts, non-profits with a focus on environmental sustainability, climate policy, and equity, diversity, and inclusion (EDI) have been adversely impacted. These organisations are increasingly viewed with suspicion by federal authorities and have found themselves targeted not only through defunding but also through burdensome regulatory proposals. Suggestions to amend tax exemptions, introduce complex reporting requirements, or conduct political investigations into non-profit activities have left many feeling as though they are operating under siege.
This environment of political and regulatory uncertainty renders mid to long-term planning a huge challenge and has become a significant distraction from advancing the mission. The priority for some US-based non-profits has therefore shifted from growth and expansion to survival. In light of these challenges, some non-profits are now looking across the pond to a more benign and supportive jurisdiction to host their operations.
The UK as a Strategic Alternative
Against this backdrop, the UK presents a strong case as a strategic base for US non-profits seeking stability, regulatory clarity, and international scope. With its long history of charitable engagement and strong legal infrastructure, the UK offers an attractive environment for mission-driven organisations looking to navigate uncertain times.
One of the UK’s most valuable assets is its regulatory framework with a dedicated independent regulator, the Charity Commission for England and Wales. This allows for more consistent and less politicised approach to oversight, unlike in the US where regulation is tied closely to the IRS. The Charity Commission is known for its measured and constructive engagement with charities, focussing on governance and best practice, which fosters a more predictable and collaborative environment in which charities can operate.
The UK also benefits from a unified legal and tax system, avoiding the complexity of federal-state conflicts that exist in the US. In some European countries like Switzerland, individual cantons may impose local conditions on charitable operations, like requiring a percentage of funds to be spent within the locality. It also does not have the fixed distribution requirement of US private foundation or apply an exit charge for moving assets off shore like some European jurisdictions. The UK has no such restrictions; charities established in the UK are permitted to carry out their work internationally, so long as their activities meet the criteria for charitable purpose under UK law. This flexibility makes the UK a particularly attractive for charities with global operations.
The UK’s favourable tax regime provides another significant benefit. Charities in the UK enjoy a range of generous tax reliefs, including full exemption from corporation tax, capital gains tax, inheritance tax, income tax, and Stamp Duty Land Tax. Additionally, mechanisms like Gift Aid provide extra incentives for donor contributions. Gift Aid allows charities to reclaim basic rate tax on donations from UK taxpayers, effectively increasing the value of donations by 25% at no extra cost to the donor. This can substantially boost fundraising efforts for relocated or UK-based branches of US organisations and provides a supportive environment for philanthropic fundraising.
Another major advantage for US charities relocating to or expanding into the UK is the cultural and legal compatibility between the two jurisdictions. Not only do the countries benefit from a shared language, simplifying transition arrangements but US charity law also has deep roots in English common law, providing a familiar legal structure for American organisations. Governance practices, fiduciary responsibilities, and strategic planning frameworks overlap considerably. This baked in familiarity allows US non-profits to adapt quickly to the UK environment.
For US non-profits considering the UK, establishing a UK branch or subsidiary does not have to mean a complete lift and shift. In fact, many organisations maintain dual structures that allow them to operate both domestically and internationally. Staff transfers, board governance, and financial management can be mirrored across jurisdictions, and donors can be reassured that the organisation’s mission remains consistent.
Conclusion
The UK offers a mature and well-regulated non-profit sector, favourable tax treatment, and a legal environment conducive to international work. With strong cultural ties and operational compatibility with the US, the UK provides US non-profits with a credible option to safeguard programmatic activity during this period of political uncertainty, financial volatility, and regulatory unpredictability.
For more information about how your non-profit can benefit from a UK presence, please contact the Broadfield UK non-profit team. We are here to help you navigate the transition and take advantage of all the UK has to offer.
