The Non-Profit Reform Act, which has been in force since January 1st, is turning out to be a game changer for Austria as a philanthropy location.
Vienna (OTS) – Foundations active in Austria invested 90 million euros – the same amount as domestic businesses – for charitable causes in the country last year. With the Nonprofit Reform Act, they will be significantly strengthened through greater legal certainty, permanent access to tax deductibility of donations, highly attractive incentives for donors and maximum flexibility in the use of funds in 2024. A new boom in the creation of non-profit foundations is already emerging, as is a significant increase in foundation funds. Additional funding of 40-50 million euros is expected in the education sector alone.
As of January 1, 2024, the Nonprofit Reform Act not only made donations tax deductible for all non-profit organizations, but also significant improvements for existing and newly established non-profit foundations. „The elimination of the audit makes it much easier for foundations to benefit from donations. A decisive step! The decision is also a legal safeguard for the non-profit status of a foundation
“, emphasized Günther Lutschinger, Executive board of the Association for Non-Profit Foundations.
Of the 769 non-profit foundations in the country, only a small fraction were previously listed on the BMF list of beneficiary institutions. In particular, access has so far been largely denied to the fields of education and culture, which are widespread in the foundation sector. In order to promote development, the association supports charitable foundations with special offers.
Philanthropy location is being massively strengthened
With the right to tax deductible donations, foundations can accept donations at preferential rates from 2024. This means that your donors can use the funds provided as tax-reducing expenses. In addition, donations to the assets of a foundation are also tax deductible for donors. Although this is capped at a maximum of 10% of income or annual profit, since 2024 it has been possible for the first time to roll forward the excess amount for nine years. „The ability to present is completely new at the foundation location in Austria and in practice means a tenfold increase in incentives compared to the previous limitation. First-class conditions for philanthropists to get involved in society through their own foundations
“, knows Lutschinger and adds: „Such stimulating legislation cannot even be found in Germany, where over 25,000 foundations operate. This gives reason to hope for a new foundation boom in Austria. After the non-profit reform in 2016, this is another great success for the association for non-profit foundations.
“ As a result of the 2016 reform, at least 110 new foundations were created – 15% of the entire portfolio.
Interest in charitable foundations is growing noticeably
With the legal reform in 2024, the possibilities for using foundation funds have also improved significantly compared to neighboring Germany. The legislature has not only made it possible to leave income in the foundation over a certain period of time and thus build up larger assets, but also to spend part of the foundation on aid projects in a timely manner. This type of flexibility allows foundations to provide quicker and more targeted help as needed – a regulation that makes Austria the envy of many neighboring countries. The reform is increasingly popular among the local wealthy. The Association for Non-Profit Foundations has been receiving an increasing number of inquiries for weeks.
„Thanks to the Non-Profit Reform Act, Austria has caught up enormously in the competition for the best location for philanthropic commitment – a real game changer that will provide a lasting boost to the foundation landscape
“Lutschinger is certain. „If you want to do good on a large scale in the future, you don’t have to go abroad. And maybe some philanthropists will come back again.
“
The Association for Non-Profit Foundations (VgS) is the politically independent interest group for all non-profit foundations in Austria. The network currently has 120 members. These work in the areas of education and social affairs, art and culture, science and research, the environment and beyond. More about the association at: www.gemeinnuetzig-stiften.at
Questions & Contact:
Dr. Günther Lutschinger, Managing Director of the Association for Non-Profit Foundations, T: +43 676 4410108, E: guenther.lutschinger@gemeinnuetzig-stiften.at