What requirements must be met for an organization to be recognized as charitable?
April 12, 2022 | 50,00 EUR | answered by Roberta Lahn
Dear Sir or Madam,
my name is Tobias Riedmüller and I am a board member of a sports club. We aim to be recognized as a non-profit organization in order to enjoy tax benefits and issue donation receipts. Unfortunately, the exact requirements for non-profit recognition are not fully clear to us yet.
Our club pursues exclusively charitable purposes, such as promoting sports and youth, as well as integrating people with disabilities. We are considered charitable under the tax code (§ 52 AO) and provide corresponding evidence for our activities.
However, we have heard that there are additional criteria that must be met for a club to be recognized as charitable. We are concerned that there may be further requirements of which we are not yet aware.
Therefore, my question is: What specific requirements must be met for our sports club to be recognized as charitable? Are there specific articles of association that we need to consider? What tax obligations will we have if we are recognized as charitable?
I would greatly appreciate it if you could answer these questions in detail so that our club can take the right steps to obtain charitable recognition. Thank you in advance for your support.
Sincerely,
Tobias Riedmüller
Dear Mr. Riedmüller,
Thank you for your inquiry regarding the recognition of your sports club as a nonprofit organization. It is commendable that you are familiarizing yourself with the requirements for nonprofit status in order to maximize the tax benefits and the ability to issue donation receipts.
In order for your sports club to be recognized as nonprofit, you must indeed meet certain requirements. Firstly, the nonprofit purposes you pursue must be clearly defined and solely focused on promoting sports, youth, and the integration of people with disabilities. It is important that these purposes are enshrined in your articles of association and actively practiced.
Another important criterion for nonprofit recognition is the selflessness of the association's activities. This means that the association must not primarily pursue self-serving interests, but must solely serve the common good. It is important that board members do not derive financial benefits from the association's activities and that the association's funds are only used for nonprofit purposes.
Furthermore, certain provisions must be included in your articles of association that meet the requirements of the tax office. These may include regulations regarding the remuneration of board members, the use of association assets in the event of the dissolution of the association, and the use of funds for nonprofit purposes.
If your association is recognized as nonprofit, you will also have tax obligations. You will be required to maintain proper accounting records and submit an annual tax return. Additionally, you must regularly report on the fulfillment of your nonprofit purposes and present these reports to the tax office.
Overall, it is important that you thoroughly familiarize yourself with the requirements for nonprofit status and, if necessary, seek professional advice to ensure that your sports club meets all necessary criteria. I hope this information is helpful and wish you success in obtaining nonprofit recognition.
Sincerely,
Roberta Lahn
