German Federal Environmental Foundation: Legal Foundations and Significance
Die German Federal Environmental Foundation (DBU) is one of the most important and largest foundations of European origin in the field of environmental protection. As a legally independent foundation under public law, the DBU funds projects for the protection of the environment with a particular focus on innovation, sustainability, and practical relevance. The following article provides a comprehensive overview of the legal foundations, functions, organization, and administrative and financial structure of the foundation.
Legal Basis and Establishment
Legal basis and legal form
The establishment of the German Federal Environmental Foundation took place according to the “Act on the Establishment of a Foundation ‘German Federal Environmental Foundation'” dated 18 July 1990 (Federal Law Gazette I, p. 1477), abbreviated as: DBU Act (DBUG). Thus, it is a federal, legally capable foundation under public law with its registered office in Osnabrück. The foundation’s purpose and the rules for its structural organization are set out by this law as well as its own charter.
* Article 1 DBUG governs the establishment of the foundation,
* §§ 2 et seq. DBU Act and the foundation’s charter determine its purpose, administration, asset management, and funding authority.
Position in the German legal system
The DBU is not a supreme federal authority but an independent foundation under public law outside the classic state administration. Its legal status ensures both state affiliation and organizational as well as policy independence for funding. It is subject to government legal oversight, which is exercised by the Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV).
Foundation Purpose and Funding Authority
Statutory Purpose
According to § 2 DBUG, the foundation pursues exclusively and directly charitable purposes in accordance with §§ 51 et seq. of the German Fiscal Code (AO). The funding particularly relates to
* innovative, practice-oriented model projects,
* knowledge transfer in environmental and nature conservation,
* the development of environmentally beneficial procedures,
* the preservation and careful use of national cultural assets in terms of environmental protection.
The foundation’s resources may only be used to fulfill the foundation’s purpose. Commercial activity for the purpose of generating profits is excluded (§ 2 DBUG).
Eligible Applicants and Projects
According to its charter, both natural and legal persons under public and private law are eligible for funding. Supported projects must exemplify innovation, sustainability, and broad impact. The foundation also adheres to the principle of subsidiarity, meaning funds are offered primarily when no other public funds are available.
Administrative and Organizational Structure
Governing Bodies of the Foundation
According to § 5 DBUG and the charter, the DBU has the following governing bodies:
* Board of Trustees: Supervisory and steering body, responsible for guidelines, budget planning, and project selection.
* General Secretariat: Executive body responsible for day-to-day operations and project management.
* Advisory Board of Experts: Advisory body, primarily responsible for the evaluation of funding applications.
The members of the governing bodies are appointed in accordance with § 7 DBUG and the foundation’s charter and act independently. Appointments are made according to expertise, independence, and integrity.
Legal Supervision and Transparency
The legal supervision of the DBU is conducted by the BMUV. The foundation’s governing bodies are required to report to the ministry and are subject to audits, particularly regarding financial management and the use of earmarked funds. Additionally, the foundation annually publishes a report that is publicly accessible.
Asset Management and Financing
Foundation Capital and its Management
The initial capital for the DBU was provided through the proceeds from the sale of the federally-owned Salzgitter AG in 1990/91, amounting to around 1.28 billion DM—one of the world’s largest endowments in the field of environmental protection. The funds are considered earmarked federal special assets and must be managed in accordance with prudent asset management principles.
The ongoing income from the foundation’s capital finances the foundation’s annual work and funding activities. The assets may only be used for project implementation in exceptional cases in accordance with § 4 DBUG (principle of substance preservation).
Beneficiaries and Allocation of Funds
The allocation of funding is transparent and based on the criteria of public benefit and demonstrable environmental impact. The funding process includes a formal and substantive review of applications, evaluation by independent experts, and a decision by the Board of Trustees. The decisions are only subject to limited judicial review since they are acts of indirect state administration.
Tax Considerations
Charitable Status and Tax Treatment
In line with its charter objectives and purpose, the DBU is a tax-privileged entity. Its earnings are not subject to corporate or trade tax (§§ 3 no. 6, 5 para. 1 no. 9 KStG, § 3 no.6 GewStG) as long as the funds are used exclusively for charitable purposes. Contributions to the foundation, such as inheritances or donations, are generally exempt from inheritance and gift tax (§ 13 para. 1 no. 16 ErbStG).
Control and Evaluation
Audit Mechanisms
The foundation is subject to regular financial auditing by the federal ministry as well as, where applicable, the Federal Court of Auditors. The appropriateness and economic efficiency of fund usage are ensured by internal control mechanisms and external expert opinions.
Accountability and Reporting
The annually prepared reports provide an overview of the source and use of funds, project results, and the foundation’s statutory activities. This supports transparency and public oversight.
Summary and Significance
Die German Federal Environmental Foundation is a federally governed, legally capable foundation under public law with a comprehensive special legal status. It combines substantial foundation capital, legal and organizational autonomy, as well as strict charitable status, and is subject to government legal oversight. Its legal and structural framework ensures impact-oriented environmental funding with a focus on transparency, subsidiarity, and the promotion of innovation. The foundation is a key player in Germany’s environmental policy and exemplifies effective support for environmental and climate protection through public-law foundation models.
Frequently Asked Questions
How is the German Federal Environmental Foundation (DBU) legally organized?
The German Federal Environmental Foundation (DBU) is a legally capable private foundation with its registered office in Osnabrück. Its organization and operations are primarily governed by the foundation law of the state of Lower Saxony and the foundation’s charter. The establishment took place under the Act establishing the German Federal Environmental Foundation (DBU Act) of 18 July 1990. The DBU manages its assets independently, but is subject to government supervision in accordance with foundation law. The highest body of the foundation is the Board of Trustees, responsible for strategic management and oversight; in addition, a Secretary General acts as managing director, with specific roles and powers defined in the charter.
What is the legal procedure for awarding DBU funding?
The allocation of funding by the DBU is subject to a comprehensive application and selection process that is transparent and based on objective criteria. Legally binding is that all applicants must meet the funding requirements set out in § 2 of the foundation’s charter. The allocation of funds follows the principles of cost-effectiveness and efficiency. The application requires a detailed project description demonstrating eligibility and compliance with funding guidelines. After positive evaluation by expert panels and the Board of Trustees, funding is awarded with a legally binding funding commitment. Recipients are obliged to use the funds for the specified purpose and to provide proof of use in line with statutory provisions and the DBU’s funding conditions.
What statutory reporting obligations does the DBU have?
According to § 6 of its charter, the DBU is required to prepare an annual detailed business report, presenting both asset management and project funding transparently. In addition, the foundation must regularly account to the competent foundation supervisory authority of the state of Lower Saxony for its management and use of funds. These reporting obligations serve public and state oversight and are based on the provisions of the German Civil Code (BGB) for foundation law, alongside applicable state and foundation law requirements.
How is the DBU subject to government supervision?
Although the DBU is an independent foundation, it is nonetheless subject to so-called legal supervision by the foundation authority of the state of Lower Saxony. This supervision covers whether the foundation observes the founder’s intentions, the charter, and relevant foundation law, particularly regarding the use of assets and adherence to statutory purposes. Supervision does not intervene in ongoing projects or operational decisions, but only in cases of imminent or actual relevant legal violations, following the principle of proportionality.
What legal obligations exist toward recipients of grants?
Legally, funding by the DBU is provided through public-law funding notices or grant agreements. These set out clear rules for the use of funds, documentation, repayment, reporting obligations, and matters of copyright and licensing for funded products (e.g., studies, software). Violations of these conditions, such as misuse of funds or use for unintended purposes, justify repayment claims and may result in further sanctions.
Particularly relevant regulations for the DBU’s activities?
The DBU’s activities are particularly governed, in addition to the founding act and the charter, by the German Civil Code (BGB) with reference to foundation law, the Administrative Enforcement Act, budget law, procurement law (especially for projects with procurement-relevant elements), grant law, and applicable data protection and transparency provisions (e.g., GDPR, IFG). Relevant environmental law regulations must also be observed, as far as they are affected by funded projects.
What is the legal framework for international DBU funding projects?
The DBU can, according to its charter and funding principles, also support international projects if they relate to the foundation’s purpose and comply with the rules of German grant and tax law. For cross-border projects, EU legal regulations, bilateral agreements if applicable, and specific rules on tax justice and international use of funds apply. Contracts and the management of funds must also comply with German and, if applicable, European law in such cases.
