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Donation law & donation receipt in the association simply explained

In addition to membership fees and sponsorship money, many clubs and associations live from donations. But what is the right way for a club to handle donations? In this article, you will find out everything that sports clubs and associations need to know about donation law and donation receipts - because there are a few pitfalls waiting for you here that you can easily overcome with a little know-how.

spized | Club management

March 5, 2025 |

Whats’ on this page

1. What is a donation anyway?

2. What types of donations are there?

3. What is the difference between small and large donations?

4. How should a donation receipt be recognised?

4.1 Under what conditions may the organisation issue a donation receipt?

4.2 Are there any specifications as to what a donation receipt should look like?

4.3 Who is liable for incorrectly used donations and incorrectly issued donation receipts?

5. Exhibitor liability vs. initiator liability

What is a donation anyway?

Let's start with the basics: A donation is a voluntary contribution for a charitable, benevolent or ecclesiastical purpose. In the case of a sports club, the charitable purpose is fulfilled if the club can prove its non-profit status. A contribution, for example in the form of money, is a donation if it is not linked to a service in return - in contrast to sponsorship.

We can't do this without referring to a few laws and paragraphs - so let's keep it short: the law on donations is regulated in various laws, such as the Income Tax Act (EStG) or the Corporation Tax Act (KStG), depending on the stakeholder group. These allow donations to a non-profit organisation to be tax-deductible for natural persons under Section 10b (EStG) and for corporations under Section 9 (KStG). This means that people who donate to your association can donate up to 20 per cent of their income and offset this in full in their tax return.

For this to be possible, however, the beneficiary association must fulfil a few conditions, which we will now reveal to you.

What types of donations are there?

The procedure differs slightly depending on the type of donation - so let's start with a few definitions. The law on donations distinguishes between four types of donation for non-profit organisations: Monetary donation, donation in kind, expenditure donation and remuneration donation.

A cash donation is, as the name suggests, a money transfer or the handing over of cash.
Donation in kind refers to the donation of commodities, such as equipment, clothing or furniture. In a sports club, this naturally also includes jerseys. Donating a jersey set does not mean that you as a club (or team) cannot choose the jersey yourself. You can let off steam creatively in the design and design your jersey yourself with us at https://www.spized.com/en/design-your-own-jersey - the donor then simply pays for the costs. If required, the donor's name or logo can also be easily integrated here.
A compensation donation is a donation in the form of working time for the organisation, which the ‘working person’ donates to the organisation. He or she thus waives his or her salary compensation and can claim this in his or her tax return with a donation receipt from the organisation. However, the prerequisite is that an appropriate remuneration has been agreed in writing with the organisation in advance and the person only waives payment afterwards.
In the case of expense donations, the donor waives reimbursement of expenses that he or she has incurred for the organisation. This could be, for example, travelling by car for club purposes, telephone charges, entry and registration fees for competitions, postage costs or the purchase of office supplies for the club.

In order for the organisation to issue a donation receipt in the case of an expense donation so that the donation can be deducted for tax purposes, the following requirements must be met:

The waiver of reimbursement of actual claims must be visible on the donation receipt.
The donor must have a legal claim to the specific entitlement. This is either already covered by the association's articles of association or the association and donor conclude a separate contract.
The waiver of remuneration may not be agreed in advance.
The organisation must have the financial means to reimburse the costs.
The donor must formulate their claim in writing, voluntarily and within three months.

What is the difference between small and large donations?

Small donations are donations worth a maximum of 300 euros. The good thing for you as an organisation with these donations: You do not necessarily have to issue the donor with a donation receipt so that they can claim the donation for tax purposes. A so-called simplified receipt is sufficient for the donor: the booking confirmation from their bank. However, the following information must be visible here: Name and account number of donor & recipient, amount of the donation and booking date, purpose of the donation and whether it is a donation or a membership fee.

Dealing with large donations - i.e. donations worth more than 300 euros - is a lot more complicated for organisations. In this case, the tax office requires the donor to provide a donation receipt issued by the organisation so that the donation can be deducted from tax. If, for example, a kit is donated to you, a large donation can quickly materialise.

Incidentally, large donations in the event of a disaster that are made within a short period of time and - as the name suggests - are linked to a ‘disaster’ for the organisation are exempt from a donation receipt. In this case, a bank statement is sufficient for the donor's tax return.

How should a donation receipt be recognised?

Quite simply, a donation receipt must always be recognised by the association for the year in which it was made - regardless of whether the donor states that they want to donate for the previous or the next year. Donations that reach the organisation in 2025, for example, must also be recorded in 2025 in order to avoid problems with the tax office.

Under what conditions may the organisation issue a donation receipt?

As a non-profit organisation, you are entitled to issue your donors with a so-called donation receipt as proof of their donation. This is also known as a donation receipt or donation receipt. As a donor, you need this receipt to be able to deduct the donation from your income tax return.

However, the organisation may only issue this donation receipt if all of the following criteria are met:

Non-profit status: The association must be able to prove its non-profit status. This is done with the so-called notice of exemption, which is issued by the tax office after it has successfully checked the non-profit status. This notice of exemption must be renewed every five years.
Correct use: The donations are used for the charitable purpose of the organisation. Exception: A donor expressly wishes their donation to be used to build up assets - in which case this is also permissible.
Voluntariness: The donation is made without any kind of consideration from the organisation and is voluntary.

If all the criteria are met, your organisation may issue the donor with a donation receipt. But be careful: not every person in the organisation is authorised to do this! The association's articles of association provide information: according to these, only people who represent the association externally, i.e. the board or the treasurer, are generally authorised to sign the certificate. However, this is not set in stone: according to donation law, you can also authorise other members of the association to do so at a general meeting.

By the way: The person authorised to issue the document does not necessarily have to sign by hand - a digitally scanned signature is also permitted.

Are there any specifications as to what a donation receipt should look like?

Quite clearly: Yes! The finance ministries of the federal states provide sample templates depending on the type of donation and donor, which you must use when issuing a donation receipt. Just fill in the correct data such as the name and address of the donor, the date of the donation, the amount or value of the donation (in numbers and letters) and the reference number and date of your exemption notice.

You are therefore not allowed to simply draft your own certificate - not only will this not be recognised, the association is also liable for the accuracy of the information. This not only applies to the choice of words - changing the order and adding to or rewording the official template is also prohibited. And even the format is specified: the donation receipt may not exceed one DIN A4 page - you may use the reverse side and even design it as you wish.

Sample form 1 is used for monetary donations - this applies to classic monetary donations, membership fees and expense donations. By the way: As an association, you may only issue donation receipts for membership fees if this is explicitly stated on the association's exemption notice.

For donations in kind, use template 2. It is important to state the correct value of the donation in the donation receipt: If the item is as good as new, you can enclose the invoice. If it is used, the current value must be estimated - official depreciation tables (AfA tables) provide guidance here.

And in the event that a donor makes several donations to your organisation in one year, you can use the collective confirmation and do not have to certify each donation individually.

You can find the sample templates of the responsible Ministry of Finance online - depending on the federal state.

Who is liable for incorrectly used donations and incorrectly issued donation receipts?

This brings us to the last and very important question of liability. Section 10 b (4) 2nd sentence of the EStG will help you here:

‘Anyone who wilfully or through gross negligence issues an incorrect confirmation or causes donations not to be used for the tax-privileged purposes stated in the confirmation is liable for the lost tax.’

Translated, this means that the association is liable for lost taxes at a flat rate of 30 per cent of the donation amount (plus any applicable trade tax of 15 per cent) if a donation receipt is issued incorrectly or the donation is used incorrectly. Now it is not only clear why it is so important how you use a donation in the organisation, but also why the correct issuing of the certificate is so relevant.

In the event of liability, the following threatens:

Obviously, of course, the additional tax payment with a flat rate of 30 per cent of the donation amount, which was shown in the incorrect donation receipt
possibly even the withdrawal of non-profit status
as well as possible claims for damages and other legal consequences

Exhibitor liability vs. initiator liability

Now it is particularly important for the board of directors or the person who signed the donation receipt: the law distinguishes between two types of liability - issuer liability and initiator liability.

If the donation receipt was issued incorrectly - no matter why, no matter how - the organisation is liable. The issuer's liability therefore only applies to the organisation itself.

The situation is different when it comes to donor liability: If donations are used incorrectly (i.e. not as desired by the donor or not for charitable purposes), both the organisation and the natural person making the donation may be liable - and with their private assets. So be careful when signing - because ignorance or ‘gross negligence’, as the law calls it, does not protect against punishment.

By the way: As a club or association, you are obliged to keep a copy of every donation receipt. In principle, this is ten years - a reduced retention period of seven years applies to electronically transmitted donation receipts.

Our tip for clubs and associations: take out insurance to cover the worst-case scenario. As nice as the ‘win-win’ situation with donations may be for both the donor and the benefiting organisation, there are a number of obligations for the organisation, especially with large donations. With our tips on how to handle donations correctly, your organisation will be well prepared when the next donation arrives.