gfdsnjkghi4372

Charity is bringing disinterested help to those in need. Various actions can be taken to achieve the goal. The name of such activity comes from the Latin word “caritas”, meaning mercy or Christian love. Initially, charity was associated with Christianity, but now also secular organizations are involved in charity activities.

Charitable activities are carried out by various types of organizations. As a result, their reach can exceed national borders. The basis of charitable organizations is formed by volunteers who work for free for people in need.

What are charities and what do they do?

Charitable organizations are institutions whose primary task is to help those in need. Such organizations work mainly for the benefit of people or animals. These are non-governmental organizations that help the sick, disadvantaged and the poorest. If an organization has been operating for at least two years, it may apply for the status of a public benefit organization (OPP). In Poland, OPP was introduced on January 1, 2004 on the basis of the Act on Public Benefit and Volunteer Work.

Obtaining the OPP status gives charity organizations great opportunities:

• they can receive 1% of personal income tax. In the tax declaration, everyone has the right to indicate the organization to which 1% of their taxes will be transferred;
• are exempt from certain taxes – e.g. income tax and legal transactions;
• they get the opportunity to inform about their activities free of charge on the radio and television.

Where do charitable organizations obtain funds for their activities?

Charities do not work for profit, and their only purpose is to help those in need. So where do they get the funds for their activities? There are several sources of financing, including:

• a donation, which is a form of a legal contract and may be financial or in kind. The funds are transferred by the donor who does not have any benefit from it;
• deduction of 1% of income tax – each taxpayer as part of the annual settlement may transfer 1% of his tax to a selected public benefit organization;
• public fundraising – funds are collected for a specific purpose, and such action requires obtaining an appropriate permit;
• grants from public funds – they are popularly called grants and are a non-returnable financial grant that is transferred to a charity for a specific purpose.

The largest charities in the world

World charitable organizations help people on all continents. The largest charities in the world include:

• The Red Cross and the Red Crescent are organizations that help the victims of natural disasters and the poor. They also conduct educational campaigns;
• Goodwill Industries International – focuses on supporting disabled people and their families. It also specializes in training for people who are at risk of total social exclusion;
• YMCA, or the Union of Christian Male Youth – has been operating since the mid-nineteenth century. Currently, she supports young people and their physical and spiritual development.

The goal of the foundation’s activity should be socially or economically useful. So what?

1. Purpose of the foundation

The purpose for which we can establish a foundation is not arbitrary – according to Art. 1 of the Act on Foundations – should be socially or economically useful, in line with the basic interests of the Republic of Poland, in particular such as: health protection, economic development and science, education and upbringing, culture and art, social care and assistance, environmental protection and the care of monuments . The expression “in particular” means that the purposes mentioned in the Act, and the above-mentioned purposes, are given only by way of example. In practice, this means that the foundation may pursue any charitable or social or economically useful goals, provided, however, that they are of a public nature.

Sometimes it may seem that the purpose for which we would like to establish a foundation is most useful, e.g. financial aid in the form of a long-term scholarship for an orphaned child. However, the purpose stated above is not public. Therefore, it is important to remember when defining the scope of the organization’s activities that the foundation should not be created to satisfy the private, personal good of the founder or any other person, but for the general good.

A characteristic feature of a foundation is the non-profitability of the purpose for which it was established.

When starting to define the purpose or goals of the foundation, it should be remembered that they are given in the foundation act and in the statute. At the stage of establishing the foundation, the goals stated in the foundation act and in the statute must be exactly the same. In addition, it is important that the wording affects, inter alia, on the possibility of receiving subsidies, taking advantage of tax exemptions, accepting donations.

Detailed description of goals

Goals should be broadly defined, and at the same time as specific and understandable as possible. Thanks to this, the person reading them can easily imagine what the organization wants to achieve and in which directions to act. Sometimes it happens that the statute includes goals taken directly from the catalog of goals presented in Art. 4 of the Act on Public Benefit and Volunteer Work. This does not mean, however, that it is necessary to use the literal wording of the act.

You have to keep the so-called the Golden mean. Write broadly, so as not to change the statute every year, but be specific. If we only focus on one or two goals at first, nothing bad will happen, no one will be able to question it.

Objectives set out in the statute, and income tax exemption

The Foundation, as a legal entity, is subject to tax obligations. One of such obligations is the obligation to pay income tax, which results from the act on corporate income tax. The same act also contains provisions on tax exemption (Article 17 (1) (4)) – the foundation may take advantage of these exemptions if the statutory goal of the foundation is to operate:

• scientific, scientific and technical,
• educational, including educating students,
• cultural,

and activities in the field of:

• physical culture and sport,
• environmental protection,
• supporting social initiatives for the construction of roads and telecommunications networks in the countryside and water supply to the countryside,
• charity,
• health protection and social assistance,
• vocational and social rehabilitation of the disabled and
• religious worship.

In practice, this means that the funds obtained by the foundation will be subject to tax exemption (income will be exempt from income tax) if they are intended for purposes and activities that are included in the above-mentioned areas, which are the statutory goals of the foundation (i.e. resulting from the provisions of the statute).

Objectives set out in the statute and donations

It is also important for the foundation to be able to receive support in the form of donations, both by individuals and companies. People who want to support activities in this way, e.g. cultural or charitable activities of a selected foundation, can benefit from a tax deduction. This possibility is provided by the Personal Income Tax Act and the Corporate Income Tax Act. The donation will be tax deductible if it is transferred by bank transfer, for the purpose of implementing the statutory goals of the foundation included in the catalog of goals listed in Art. 4 of the Act on Public Benefit and Volunteer Work.

These objectives partially overlap with those mentioned earlier in connection with the income tax exemption. This is for example:

• social assistance,
• charity work,
• health protection and promotion,
• science, education, education and upbringing,
• culture art protection of cultural goods and traditions,
• promotion of physical culture and sport,
• ecology and protection of animals and protection of natural heritage.

Objectives set out in the statute and subsidies

Organizational activities often take the form of projects. Projects respond to some needs or problems that we see around us. After the foundation is established, it can look for money to implement these projects from various sponsors, e.g. companies, corporate foundations, local governments. One of the forms of support for the foundation or its specific activities will be granting it a subsidy. And the one who supports (whether it is a local government or a “private” sponsor) will check whether the activities planned by the organization comply with its statute. If this is not the case, the organization’s application may be rejected for formal reasons.

Non-profitability of the goal

The purpose of the foundation may not be of a profit-making nature, i.e. the purpose of the foundation may not be to raise funds for operations or running a business.

This does not preclude the foundation from running a business. However, it will be described in another part of the statute (not in the part containing the goals and means of implementation, but preferably in a separate paragraph) and will require an entry in the Register of Entrepreneurs in the National Court Register.

It is worth helping, it is much more than a slogan. For many people, broadly understood charity work, volunteering, or simply supporting various actions and foundations, is a value that is permanently inscribed in their lives.

It is worth helping, it is much more than a slogan. For many people, broadly understood charity work, volunteering, or simply supporting various actions and foundations, is a value that is permanently inscribed in their lives. Charitable foundations are organizations that by definition help, e.g. people with disabilities. Thanks to them, those who want to help can choose the form of support (e.g. donation, 1% annually).

Foundation of public benefit – specific activity

The activity of a foundation with the status of PBO is specific because it is focused on providing aid in accordance with specific assumptions. According to the official definition, it is an organization whose main features are:

• capital earmarked for a specific purpose,
• the statute defining the principles of capital use and the nature of the business,
• non-governmental and impersonal character,
• taking over by the management board of custody over the property and responsibility for achieving goals after the foundation is entered into the National Court Register,
  independence from individuals in terms of purposes, property and disposal.

Public benefit foundations have various possibilities of obtaining financial and material resources intended for statutory purposes, in particular donations, inheritances, bequests, subsidies, public collections, 1% tax in the annual settlement. Legal personality and the status of PBOs provide foundations with certain privileges, such as:

• tax exemption: corporate income tax, real estate tax exemption, civil law tax exemption,
• exemption from stamp and court fees,
• the right to publish free information about activities on public radio and television stations.

Foundations helping people with disabilities

In order for a foundation to obtain the status of a PBO, it should operate in one of the public benefit areas defined by regulations. One of them is helping people with disabilities, including the activities of foundations helping children with disabilities. This assistance may be of a very different nature, e.g. the most obvious, i.e. financial support, addressed both to people with disabilities and their carers. It is worth knowing that this applies to help for children with disabilities and adults. Equally important is the joint implementation of educational and professional goals.

The foundations also help in organizing treatment, provide access to the latest methods and rehabilitation. A very important aspect of the operation of a foundation that helps people with disabilities is broadly understood support in fulfilling life passions. Disability does not have to block the way to making your dreams come true. It is worth breaking down stereotypes excluding people with disabilities from many activities – these are also important goals of a public benefit foundation.

What does the foundation live on?

Public benefit foundations, by definition, do not carry out profitable activities, their purpose is charity (e.g. foundations for children with disabilities). Nevertheless, capital is necessary that will allow the implementation of the statutory objectives, as you can easily guess, the initial capital generally does not cover all needs. So let’s take a look at how foundations raise funds for their activities.

Donation – financial or in kind, is things or funds that are donated voluntarily without any benefit. According to the definition, it is a form of contract in which the donor undertakes to provide a free service to the recipient at the expense of his property.

In-kind gifts – a specific type of donation, the subject of which are items given to the foundation by the donor (free of charge). A donor can be a natural or legal person. Write-offs of 1% of personal income tax (this form applies only to foundations with the status of OPP).

Each taxpayer who settles accounts in the annual tax return may allocate 1% of the tax to a selected public benefit foundation. These funds will be transferred by the Tax Office. Public collection – public collection of money or things for a predefined purpose, an appropriate permit is required. Types of public collections:

• collecting donations for money boxes or stationary moneyboxes,
• voluntary payments to a separate account for a given collection,
• sale of the so-called bricks,
• sale of items and services,
• roundabout assembly.

Subsidies from public and private funds – the so-called grants may be awarded by local governments, public administration and private sources (organizations specializing in granting grants). It is a non-returnable financial aid that a foundation helping people with disabilities may receive from a donor (sponsor) for a specific purpose related to its statutory activity or for institutional support.

Paid public benefit activities – carried out as part of the tasks specified in the statute, falling within the area defined in the Act on Public Benefit and Volunteer Work. The foundation may charge fees for this activity. Examples include rehabilitation foundations or those that also offer rehabilitation treatments and services. The most important thing is that income from paid public benefit activities may only be used for public benefit activities.

Fundraising – an effective process of obtaining funds from individuals, companies, organizations, institutions, etc. The funds are collected for social and charitable purposes, and therefore helping people with disabilities fits perfectly into the activities of fundraisers. Methods such as fundraising, lotteries, auctions, public events combined with fundraising, selling bricks, clickable banners on websites are used here.