What is a circle of friends
Circle of friends or friends' association - pros and cons
The terms friendship or support group and support association are often used interchangeably. This is understood to be a group of people who, through their activities, conduct donation campaigns or fundraising for a non-profit organization.
Legally, in terms of their effect and their possibilities, however, both forms of organization must be viewed and assessed very differently.
Circle of friends or sponsors
Such a support group (Freundeskreis means the same thing) does not initially have a formal legal framework within association law or the tax code. In most cases, interested parties have found each other who would like to support a special purpose through their cooperation or donations. The groups of friends, which are often self-organized in the vicinity of refugee accommodation, are such a loose structure. There is no formal external representation, no board of directors, no statutes and no independent charitable status.
A start-up from an organization is also very common. For example, when a parish founds a fundraising group that is staffed internally (by functionaries) and externally (specialists, volunteers), which more or less independently designs and implements fundraising measures.
If a support group is set up or is set up directly to support a specific institution, it can either act completely independently of this or rather has the role of an externally staffed working group.
The development association is, as the name suggests, an independent association registered in the association register and has practically always received the status of non-profit status from the tax office. Such an association has a statute with a written association purpose, a board of directors, well-known members and a general meeting.
But which form is now useful? There are a few points to consider:
A) Friends' Association
Start-up and organizational effort: This is rather larger, although there are model statutes for development associations in accordance with the tax code (AO). At least seven members are required, a board of directors, independent bookkeeping and regular general meetings are required. Any costs incurred are to be borne by the association (e.g. bank fees).
Durability: An association can be dissolved at any time by a vote of the general meeting, but the effort is much higher due to the necessary majority and certification, so that a longer service life can be assumed.
Donation receipt: As an independent legal entity, the development association can apply for non-profit status and issue donation confirmations. According to the tax code, if the statutes are structured accordingly, he can forward 100% of the donations raised directly to the non-profit "parent organization" to be funded.
Relationship to the "mother": The non-profit organization to be funded by the development association has no direct access to the development association. You can arrange for someone from the organization to be represented on the board of the friends' association. But the general assembly can revoke this at any time by changing the statutes.
Frequent problems in the cooperation between the development association and the sponsored organization are:
- Uncoordinated appearance of the development association with the logo of the "mother". However, this can be forbidden by the mother.
- The association only passes on its funds under certain conditions for the use of funds and the parent organization has a different need or views the condition critically. This happens more often in practice and leads to conflicts. For example, if a development association wants to support Chinese lessons in a kindergarten, but the kindergarten urgently needs funds for the playground renovation.
- Former employees / board members of the organization become active in the development association and pursue a “parallel policy” or act against their successors in the “mother”.
- The advertised donor addresses are only available from the sponsoring association. The beneficiary organization has no legal claim to these addresses.
But there is also a big advantage: If, for example, the organization is not allowed to accept donations as a home sponsor (or only under high bureaucratic hurdles), an organization, personnel and instructions independent association can be an elegant alternative to also be able to do fundraising in the area of the home law. The parent organization may not then be made aware of the donors, nor may it take over the donation bookkeeping for the development association.
The development association is similarly advantageous for public institutions such as kindergartens or schools, where otherwise the local council often has to decide whether to accept each (!) Individual donation.
Start-up and organizational effort: The support group can easily be established ad hoc by voting of those present. It does not require a formal board of directors, but can appoint spokespersons or representatives. However, this has no legal effect as, for example, in association law. In its essence it corresponds to a working group.
But: If the federal district becomes “independent” and appears to the outside world in such a way that it is perceived as an independent legal entity, it automatically forms a BGB society and each “member” is individually liable for possible obligations that are entered into in this form. An example would be if the sponsoring group as such orders elaborate catering for a benefit event in its own name and not in the name of the sponsoring organization without prior consultation or commissioning. In the event of a conflict this can end in such a way that the customer is personally liable for the payment of the catering.
Durability: It can be set up or dissolved informally at any time by a vote of the participants or the supporting organization. At the same time, there are also long-term and very successful fundraising support groups.
Donation receipt: Recognition of non-profit status is excluded, as the sponsorship group cannot apply for this independently according to the tax code. Funding groups can therefore not issue their own donation receipts. The donations must go to an account of the beneficiary organization and be confirmed by this. The development association collects donations in the name and on behalf of the “parent organization”. So he cannot open his own bank account like a club. However, the “mother” could open a separate Förderkreis account at the bank in order to be able to separate the funds raised by the Förderkreis more easily in terms of presentation and accounting, if this should make sense under the circumstances.
The big advantage of a support groupt is that it can easily be docked to an existing organization and thus committed people can be involved in the work in parallel with existing committees. According to the name, a sponsoring group can also name a “board of directors” in order to be able to have a stronger external effect or to satisfy possible needs for recognition.
The support association and support group are often, but wrongly, given equal status. If there is no compelling reason to found an association, I recommend the support group, which is tied to the organization more closely or further as required, and which can easily be equipped with the necessary skills for successful fundraising.
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