Donations are the financial lifeblood of many organizations and associations. To allow your donors to deduct their contributions from taxes, they need a properly issued donation receipt for the tax office (also referred to as a donation certificate or confirmation of donation). However, it’s not only your supporters who benefit from this—it’s also an important tool for your organization to build trust, increase transparency, and foster long-term relationships with your supporters. In this article, we’ll answer all the key questions regarding donation receipts.
Note: The information provided here refers to donation receipts in Germany. For information on issuing donation certificates in Switzerland, please refer to our article on donation receipts in Switzerland.
Inhalt
- What is the difference between a donation receipt, donation certificate, and confirmation of donation?
- What types of donations are there, and what should organizations consider?
- How do donation receipts benefit donors?
- What are the requirements for organizations and associations?
- Which organizations are allowed to issue donation receipts?
- Who is authorized to issue donation certificates?
- What information must a donation receipt contain?
- Where can you find templates or samples for donation receipts?
- What happens if incorrect donation receipts are issued?
The Essentials at a Glance
- A donation receipt serves as tax documentation and is also known as a donation certificate or confirmation of donation.
- Associations can only issue donation receipts if they are recognized as tax-privileged and pursue charitable, benevolent, or religious purposes. Under certain conditions, nonprofit limited liability companies (gGmbHs), nonprofit entrepreneurial companies (gUGs), and educational institutions may also issue donation receipts.
- Donation receipts must be issued according to an official template with all mandatory information. Organizations are liable for any incorrect donation certificates, and in cases of misuse, the board can be held personally liable.
- For donations up to €300 (small donations), a simplified donation proof, such as a bank statement, is sufficient.
- Associations are required to document each donation and keep the records for at least ten years. For electronically issued donation certificates, a retention period of seven years applies.
1. Basics of Donation Receipts 📜
→ What is the difference between a donation receipt, donation certificate, and confirmation of donation?
Whether it’s called a donation receipt, donation certificate, or confirmation of donation—they all refer to the same thing: an official document confirming that a donation was received by the recipient. Donors can use this document to claim their donations for tax purposes.
→ What types of donations are there, and what should organizations consider?
Donation receipts are not only required for traditional monetary donations. Proof in the form of a confirmation of donation is also necessary for in-kind donations, expense donations, and remuneration donations. Each type of donation has specific requirements that must be met when issuing the document. Proper documentation and accurate valuation of these donations are crucial to meet legal requirements and maintain donor trust.
→ How do donation receipts benefit donors?
A properly issued donation receipt allows your supporters to deduct their donation from their taxable income, thereby reducing their tax burden and ultimately lowering the financial cost of the donation.
2. Requirements for Issuing Donation Receipts 🔎
→ What are the requirements for organizations and associations?
Your organization must be recognized as tax-privileged. This applies if it pursues charitable, benevolent, or religious purposes and this has been confirmed by the tax office in the form of a tax exemption certificate. Additionally, the following conditions must be met for a donation to qualify:
- Charitable purpose: Donations must be used for the charitable purpose specified in the organization’s bylaws. This ensures that the donation is not used to build up the organization’s assets, except when explicitly desired by the donor.
- Voluntary without compensation: Donation receipts can only be issued for voluntary contributions without any form of compensation. Excluded are expenses such as ticket purchases or sponsorship activities.
→ Which organizations are allowed to issue donation receipts?
Associations are among the classic organizations that can issue confirmations of donation for their donors. However, even if your organization is not an association, it may still be eligible to issue donation receipts if the aforementioned requirements are met. This can include nonprofit corporations and educational institutions.
→ Who is authorized to issue donation certificates?
In general, individuals authorized to represent the association or organization may issue donation certificates. These typically include:
- Board members
- Treasurers
- Financial officers
3. Content of a Donation Receipt ✒️
→ What information must a donation receipt contain?
A donation receipt must be issued in accordance with the official template. This template must not be altered in terms of content or language. However, you are free to design the back of the receipt as you see fit.
→ Where can you find templates or samples for donation receipts?
The Federal Ministry of Finance provides official templates that can be easily downloaded. Make sure you use the correct template, e.g., for monetary or in-kind donations.
Tip: FundraisingBox offers a donation receipt tool. This allows you to use legally compliant text templates and send the receipts by post or email.
To learn more about how to create donation receipts using FundraisingBox, check out our article on the topic.
→ What happens if incorrect donation receipts are issued?
You should exercise great care when issuing donation receipts. If incorrect confirmations of donation are issued by your organization, it can lead to tax disadvantages for your donors. Furthermore, your organization can be held liable.
If donation receipts are issued incorrectly, either deliberately or through gross negligence, the organization is liable for the unpaid taxes. Under § 10b (4) sentence 2 of the German Income Tax Act (EStG), the liability is set at 30% of the donation amount. For taxable entities, an additional trade tax of 15% may apply.
Personal liability of the board members
If the association misuses donation funds or provides false information, board members can be held personally liable. This means the person signing the donation receipt may be required to cover tax payments or damages from their private assets. In addition to financial penalties, there is also a risk of losing the association’s tax-privileged status.
A liability insurance policy for financial damages can be useful to protect board members from personal risks.
- Issuer liability:
If incorrect confirmations of donation are issued, either deliberately or through gross negligence, the organization is liable for the unpaid tax. The liability amount is 30% of the reported donation and applies to the organization, not the individuals involved. - Initiator liability:
If donation funds are not used for the stated charitable purposes, both the organization and the responsible individual can be held personally liable. The liability amount is again 30% of the donation.
Examples of incorrect donation receipts:
❌ The donation was not made voluntarily but as a mandatory membership fee.
❌ The donation is used for asset building instead of the stated charitable purpose.
❌ A benefit, such as advertising services, was provided in return for the donation.
❌ The reported value of an in-kind donation does not match the actual value.
❌ The stated donation amount exceeds the actual donation.
4. Obligations and Deadlines 🕛
→ From what amount must a donation receipt be issued?
Donations up to €300: A simplified donation proof, such as a bank statement or transfer confirmation, is sufficient for tax purposes. A formal donation receipt is not required. The simplified proof must include:
-
- Name and account number of both the recipient and the donor
- Amount (in euros) and booking date
- Charitable purpose
- Indication of whether it is a donation or a membership fee
Donations above €300: For higher amounts, an official confirmation of donation using the prescribed template is required.
→ What is a consolidated donation certificate?
A consolidated donation certificate simplifies donation management for organizations when multiple donations are received from the same donor within a year. Instead of issuing individual confirmations for each donation, all donations can be summarized in a single certificate.
The consolidated donation certificate must include:
- The term “Consolidated Donation Certificate”
- A detailed list of all donations with date, amount, and type of donation
- Confirmation of the donor waiving reimbursement in the case of expense donations
- A description of donated goods in the case of in-kind donations
- The total amount of all donations on the front page
- A declaration that no additional individual receipts were issued for these donations
→ How long must donation receipts be kept?
Organizations are required to retain donation receipts for ten years. This can be done by copying, filing, or storing them electronically. The goal is to ensure proper use of donation confirmations and correct documentation of received funds.
→ By when should a donation receipt be issued?
Ideally, a donation receipt should be issued by January 31 of the following year. This gives your donors enough time to include the receipt in their tax return.
👉 Tip: Use the FundraisingBox feature to automatically issue donation receipts after receiving a donation or at a specific time of the year.
→ Can donation receipts also be issued digitally?
Yes, donation receipts can now be created and sent electronically. The retention period for digitally issued receipts is seven years.
5. Donation Receipts and Fundraising 🎯
→ How can donation receipts be used for fundraising?
Every time you send a document to your donors, you create a point of contact. By using this contact as an opportunity to personally address your supporters, your fundraising efforts can benefit significantly. Use the opportunity to attach a personal thank-you note to the donation receipt and highlight the impact of their donation.
- Building trust: Donation receipts enhance transparency and credibility, strengthening donor trust.
- Incentives for large donations: The tax benefits of donation receipts can motivate donors to contribute larger amounts.
- Process automation: Digital receipts reduce administrative workload and improve the donor experience.
- Expressing gratitude: Sending donation receipts with a personalized thank-you message fosters stronger relationships.
- Communicating value: Emphasize in your fundraising emails that every donation is tax-deductible with a receipt.
- Encouraging regular donations: Highlight the long-term tax advantages of recurring donations to encourage sustained support.
- Promoting in-kind donations: Inform donors that in-kind donations are also tax-deductible with a receipt to encourage resource contributions.
Conclusion
Donation receipts are an essential tool for your organization to retain donors and offer them tax benefits. With the right knowledge about requirements, obligations, and various types of donations, you can ensure a smooth process. Use digital tools and automate the process to save time and strengthen donor trust.
Sources
https://www.ehrenamt24.de/wissen-fuer-vereine/vereinswiki/spendenrecht-spendenbescheinigung/
https://deutsches-ehrenamt.de/steuern-finanzen/spenden-finanzierung/spendenbescheinigung/
