Supporting organizations abroad - what to bear in mind when donating

“On my trip to South Africa, I learned about a great organization that I would now like to support.” Often, it is travel and personal contact with local people that lead to the desire to support the work of an organization abroad with a one-time or regular donation.

Back home, the realization quickly follows: It's not that simple - especially if it is important to me to tax-deduct the donation. Because even if private individuals are generally free in their decisions, the tax office requires proof that confirms the non-profit status in order to recognize the donation. Since small organizations in particular often cannot provide access to the documents required for auditing, recognition of the donation under German tax law is often not straightforward. Organizations such as Maecenata or Transnational Giving offer help by facilitating a donation transfer abroad for a transaction fee. You will find out what other alternatives exist and what else needs to be considered for donations abroad in the following article.

Please note: This article does not constitute legal or tax advice.

📚 Content

1. Verification of non-profit status - this is the proof the tax office needs

2. Differences: Donations to European vs. non-European countries

3. These platforms help with your international donation

4. Conclusion

Verification of non-profit status - this is the proof the tax office needs

In order for a donation from Germany to an organization abroad to be recognized by the tax office, the organization's non-profit status under German law must first be proven. In order for the tax office to verify non-profit status in individual cases, certain requirements must be met and appropriate proof must be submitted to the tax office. The exact requirements may vary depending on the type of organization and the type of non-profit activity. In general, however, the following evidence is required:

1. Articles of Association: The NGO must have articles of association that clearly define that it pursues exclusively and directly charitable, benevolent, or church purposes. These articles of Association should also contain provisions on how the organization is run and managed.

2. Activity report and annual financial statements: The NGO must submit regular reports on its activities documenting its non-profit endeavors. This may include annual financial statements and a detailed report on the projects and programs carried out.

3. Certificate of non-profit status: Some NGOs may have already received a certificate of non-profit status from another state agency. This certificate should be submitted to the tax office to facilitate recognition as a non-profit organization.

4. Proof of compliance with tax requirements: The NGO must ensure that it meets certain tax requirements, such as maintaining proper books and records and complying with regulations regarding the usage of donations.

5. Information about board members and key personnel: The tax office requires information about the board members and other key personnel of the NGO to ensure they are reliable and qualified.

6. Proof of independence: The NGO must prove that it acts independently of political parties, governments, or other organizations and carries out its activities solely in the public interest.

This evidence and documentation serve to show the tax office that the NGO meets the necessary requirements to be recognized as a non-profit organization. It is important that the organization carefully prepares all target documentation and provides additional information if necessary to facilitate the recognition process.

Donations abroad in crisis situations

Anyone who wants to help during a crisis situation abroad, for example due to the war in Ukraine or the human rights situation in Iran, can do so effectively by donating to established organizations based in Germany that have already been actively providing help in the relevant areas for years. Examples of established organizations operating in crisis areas worldwide include Doctors Without Borders, the German Red Cross, Aktion Deutschland Hilft or UNICEF Germany. Many of these organizations are represented on bcause and can be supported with a donation.

Differences: Donations to European vs. non-European countries

Within Europe, there are often tax regulations that favor cross-border donations, such as the option to tax-deduct donations to non-profit organizations in other EU countries. In contrast, donations outside Europe may involve more complex transaction and processing procedures that require specific knowledge of international financial regulations. In addition, donors and organizations must deal with cultural and language differences as well as currency and exchange rate risks. Specialized platforms such as Transnational Giving Europe (TGE) facilitate the processing and auditing of such donations. We will introduce these and other platforms to you in more detail in the next section.

These platforms help with your international donation

Philanthropy expert Ise Bosch recommends four agencies on her blog besser-spenden.de:

DSZ International Giving Organisation

In order for donations to be forwarded to a foreign organization via DSZ, non-profit status must be established. DSZ takes care of checking the non-profit status itself. In addition, organizations that receive donations via DSZ commit to regular reports on their activities. This ensures donors remain informed about the current progress of impact.

Maecenata

One focus of the Maecenata Foundation is Transnational Giving (TG). The platform handles the verification of the non-profit status of foreign organizations and offers individual advice and support for the donation. For greater transparency towards donors, recipient organizations commit to reporting regularly on their activities.

Transnational Giving Europe

Transnational Giving Europe (TGE) enables secure and tax-deductible donations to non-profit organizations across Europe. With a network spanning over 19 European countries, TGE provides comprehensive support and expertise for international donations. In doing so, TGE takes care of the careful verification of the non-profit status of the recipient organizations and provides reliable donation processing. Here, too, organizations are required to report regularly on their activities.

bcause

For users of bcause, tax issues regarding donations abroad are completely eliminated. This is because bcause takes on the potential risk of an international donation for the user. The user already receives a donation receipt for their payment into their bcause account, as this is a donation to the bcause Treuhandstiftung, which is recognized as a non-profit organization in Germany. The donation to the desired organization abroad is then carried out by the bcause Treuhandstiftung.

Learn more about how you can support international organizations with bcause. Book your free product demo now!

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Conclusion

There are a few things to consider when donating abroad. In particular, the tax aspects and the verification of non-profit status require thorough preparation. Platforms like Maecenata, Transnational Giving Europe (TGE), DSZ International Giving Organisation, and bcause play a decisive role in this context. They simplify the donation process abroad and ensure that help arrives where it is most urgently needed.