Save tax with donations
A donation not only supports the work of a charity but can also reduce your own tax burden. However, the charitable intention should be the priority. Therefore, it is important to know who receives the donation and how the money is used.
The German Central Institute for Social Issues (DZI) provides guidance in this area. It awards a donation seal to reputable organisations that must meet certain criteria. The DZI checks, among other things, how the donations are used and the costs for advertising and administration. These expenses must not be disproportionately high. As a guideline, administrative costs exceeding 35% of total expenditure are unacceptable.
Organisations with the DZI donation seal may use it on their website and in publications. The DZI currently lists around 250 organisations, from „action medeor“ to the „Zukunftsstiftung Entwicklungshilfe“. However, the absence of a donation seal does not necessarily mean that the organisation is disreputable, as participation in the voluntary „donation MOT“ involves annual fees.
In such cases, a look at the organisation's annual report can provide information on how funds are used – often more informative than a simple brochure.
In addition to a clear conscience, donors benefit from being able to claim the donation for tax purposes. Donations are deducted as special expenses in the tax return. Donations made in the assessment year 2024 are entered in the main form of the income tax return. Since 2007, for donations up to 200 Euro, a simple proof of payment, such as a bank statement or transfer slip, is sufficient. For higher amounts, a donation receipt is required, which most organisations automatically send at the beginning of the following year.
Note: Not every donation or membership fee is tax-deductible. Contributions to sports clubs, carnival clubs, local clubs, or choral societies are not recognised. On the other hand, donations and membership fees to clubs active in nature, animal protection, welfare, or monument protection are tax-deductible.
There is a special regulation for donations to political parties: Here, you receive a direct tax reduction of 50% of the donation, up to a maximum of 825 Euro (single) or 1.650 Euro (married). Amounts beyond this can be deducted as special expenses up to the maximum amounts of 1.650 Euro (single) or 3.300 Euro (married).
In addition to cash donations, donations in kind can also be claimed for tax purposes. For example, if you donate old clothes to a charitable organisation, you should request a donation receipt documenting the market value and condition of the donated items.
