The German Fundraising Association is among a number of organisations calling for law changes to ensure that the country’s nonprofit organisations can be political in their actions without fear of losing their charitable status and the tax benefits that brings.
Currently, charities that qualify for nonprofit status under the German law also qualify for exemption from some taxes while supporters can write off their donations in their tax returns. However, nonprofit organisations that are considered to be political, or to act politically, run the risk of removal from this category and so the loss of the associated tax benefits, as well as other opportunities.
Larissa Probst, managing director of the German Fundraising Association (DFRV) draws attention to a further issue:
“Considering the rise of right-wing and populist movements it is more important than ever for associations to take a political stand, whether as a sports club or as a musical society. Losing one’s charitable status means losing the tax benefits on one hand but also the possibility of applying for most government funds and grants of private foundations.”
2020 has seen a number of campaign groups lose their charitable status, including anti-globalisation campaign group Attac and the environmental Campact.
The Finance Ministry has now put forward proposals to introduce a new category for ‘political corporations’ but the sector fears that this may force some charities to make a choice as which one they fit into, and affect the tax benefits they are then eligible for.
The organisations, which also include anti-corruption organisation Transparency Germany, the German Nature Protection Ring, the German Donation Council, the Maecenata Foundation, PHINEO and VENRO, are requesting that the law ensures that:
– Nonprofit organisations are explicitly allowed to use political means predominantly or exclusively to pursue their own purposes.
– Nonprofit organisations can selectively get involved in nonprofit causes and purposes other than their own without damaging their charitable status, for example, if a sports club wants to take part in a demonstration against racism.
– The category ‘charitable purposes’ should be further expanded and the tax code widened to cover causes such as commitment to human and civil rights: a joint statement sent out earlier in November stated these are ‘undoubtedly non-profit, and that should be reflected in the tax code.’
They would also like to see civil society organisations included in a discussion about the changes with the Bundestag, Bundesrat and political parties.
Hartmut Bäumer, Chairman of Transparency Germany, said:
“The loss of nonprofit status is a threat to the very existence of most organisations, and not just because of the associated tax advantages. We cannot afford to weaken civil society – this is particularly true in times of crisis.”