Gesetz zur Stärkung des Ehrenamtes

At the beginning of 2013, both the German Bundesrat and Bundestag passed the 'Gesetz zur Stärkung des Ehrenamtes' (i.e. the Law on the Strengthening of the Honorary Office). This Law contains a series of new regulations in the area of the laws on donations, foundations and non-profit organizations. The aim of the Law was to improve the legal framework of civic involvement in Germany. Of special interest to the foundations are the new regulations concerning the so called »Endowment prohibition« and the principal-depleting foundations. According to previous regulations, a foundation was prohibited from granting another foundation its financial means in order for it to create capital. Now the present regulations state that tax concessions are not impossible if a corporation bestows a maximum of 15 % of its means on another taxprivileged corporation in order to endow them with assets. Under German Law it is thereby, for the first time, possible for foundations also to contribute to the capital of endowed chairs with their own means. A second important change for the foundations concerns the possibility of using up the foundation's assets over a period of time. According to the new regulations in section 81 BGB (German Civil Code), the fulfillment of the purpose of the foundation can even then be seen to be permanently guaranteed if the foundation uses up its assets within a minimum of at least 10 years. Deviations in the state foundation laws must be adapted to this new federal regulation. Other amendments include the doubling of the maximum amount of assets that married couples can bestow on foundations, the determination procedures for the recognition as a non-profit organization, the extension of the deadlines for the timely use of assets as well as new regulations on the establishment of reserves and the supplying of assets.