Buying the land and doing the construction work for the project requires a local charity; however the endowment may be best situated elsewhere – for example, to avoid political risks in the longer-term.

The client might therefore choose to set up a registered charity in the UK to hold the endowment, which would also give the client flexibility to raise outside funds for the project. Similarly, the client might also consider setting up a charity in the US (a 501(c)(3) organisation) either in addition to or in lieu of a UK charity.

Registration of the charity in an onshore jurisdiction (with the associated regulatory and reporting requirements) can provide external donors with reassurance as to the credibility of the charity as well as tax efficiency.

Alternatively, if the clients prefer for the project and its financial accounts not to be publicly available, as they would be for a registered charity, then they might consider setting up the endowment as a charitable purpose trust in an offshore financial centre, and then having ‘Friends of’ charities, which could be based in various countries, linked to the main educational institution charity.

The ultimate structure will depend largely on the clients’ preferences, as well as the family’s tax exposure.