How do foundations settle accounts with money donated by donors?

Donation is one of the many sources of funding for a foundation. Despite limited profits, foundations undertake activities aimed at acquiring funds for the implementation of statutory objectives, and therefore are also obliged to formally account for them before the tax office. However, it is worth knowing that they have the option of being exempt from paying income tax.

How does the foundation show the amount of donations received from donors?

The basic obligation that every foundation must fulfill is to prepare an annual financial statement that includes all revenues from statutory activities. This report must include the overall amount of donations received and a breakdown of donations made by natural and legal persons. It should also include the foundation’s current financial condition. Another element is the tax settlement.

Foundations are required to submit both the financial statements and the income tax declaration by praticular date, they are required to approve the financial statements by adopting a resolution. The tax return must include the total amount of all donations that are deducted from the tax base of the donors.

They are shown in the attachment to the settlement . It is very important to indicate even the smallest donations in it. When it comes to large amounts (a one-time donation over partor an annual amount for one natural / legal person over particular amount of money), they must be shown together with the indication of individual donors.

In addition to formal obligations regarding accounting for donations made by foundations, they are required to fulfill the information obligation. This means that they must publish information about the donations received in the mass media, on the Internet and show it in a place generally accessible to interested persons. This should be done at the time of filing the tax return. It is worth knowing that this obligation does not apply to organizations whose total annual income does not exceed particular amount of money.

What dates are still important for the foundation?

A very important date to remember for any foundation is July. It is by this date that it is required to send the complete financial statement together with the approved and signed resolution to the appropriate Tax Office.

This is very important as it completes all reporting activities from the beginning of the year and fulfills the legal obligation of the organization. In the case of foundations that also conduct business activities, the next important date is July. Then, they must also complete the KRS-Z30 form, which they are obliged to send along with the above-mentioned documents to the Tax Office.

Another important date is the end of the year, ie December 31st. At that time, the foundation is obliged to prepare a report on its activities according to the formula of the Minister of Justice. The next step is to send him to the ministry.

The honesty of the foundation and the desire to raise the opinion and recognition in the community prompts many foundations also to less formal obligations to settle the received funds. This time it concerns directly the donors.

Financial disclosure helps many foundations, especially new ones, gain credibility. Therefore, it is worth maintaining constant contact with donors, and even supporting them and helping them, for example by informing them about the possibility of deducting a donation in PIT. These activities can repay many years of donor loyalty.