Concept and Legal Basis of Public Collections
The Concept Public Collection refers, under German law, to a collective action in which a large number of people collect monetary or in-kind donations for a charitable, benevolent, religious, or other social purpose. Public collections take place within established legal frameworks and are subject to specific regulations, particularly regarding authorization, implementation, and oversight.
Definition and Delimitation
Distinction from Other Forms of Collection
A public collection differs from private collections or fundraising campaigns due to its open character, directed at the general public. Actions that are privately organized and not directed at the broader public do not fall under the legal provisions for public collections.
Legal Definition
Legally, public collections are mainly governed by the Collection Acts (SammG) of the individual federal states, as the federal government has refrained from legislating in this area. The definition regularly encompasses all collections of money or material assets that are conducted for charitable or benevolent purposes, regardless of who the donors are.
Legal Regulations
Collection Laws of the Federal States
Since there is no uniform federal regulation, each state has enacted its own collection laws. The key aspects concern:
- Authorization requirement: Public collections generally require authorization, provided the respective state law prescribes it. Exceptions to this requirement can exist, especially for collections by church, political party, or school entities.
- Official Responsibility: As a rule, public order offices or district offices are responsible for issuing the authorization.
Overview of Typical Contents of State Collection Acts
- Definition of Collection and Scope of Application
- Authorization Requirements
- Implementation Regulations
- Reporting and Notification Obligations
- Sanctions for Violations
Purpose Restriction and Proof of Use
A central element is the purpose restriction for the collected funds or items. Donations received through a public collection must be used for the specified purpose. The collecting organization is required to keep detailed records of the use of the funds and, upon request, to account for them to the relevant authorities or donors.
Information and Labeling Obligations
Within the framework of a public collection, organizers are required to clearly and unequivocally indicate their identity and the purpose of the collection. Organizers must also appoint a collection leader who is responsible for the proper execution.
Authorization Process
Process of the Authorization Procedure
To carry out a public collection subject to authorization, an application must be submitted to the competent authority before commencement. The following information is generally required:
- Details on the purpose of the collection and the planned use of funds
- Period and geographical area of the collection
- Number and personal details of the participating collectors
- Proof of proper organization and accounting
The authority checks the reliability of the applicants and may grant authorization subject to conditions, especially regarding documentation and reporting obligations.
Grounds for Rejection and Conditions
Authorizations may be refused or revoked, for example, if:
- there are doubts about the charitable nature of the purpose,
- the reliability of the organizers is not guaranteed,
- or if repeated violations of the Collection Act have occurred.
The competent authority may impose conditions on the execution of the collection, such as the obligation to submit a detailed report on the use of funds or to provide certain securities.
Execution of Public Collections
Permitted Collection Methods
Public collections may be conducted in various forms, including:
- Street, house-to-house, and home collections: Personal solicitation in public spaces or at people’s doors.
- Placement of collection containers: Stationary containers in business premises or public institutions.
- Events: Benefit events, raffles, or bazaars with a collecting character.
The Collection Acts specifically regulate which collection methods are permitted and which requirements apply, for example, to the design of collection boxes or identification obligations for collectors.
Liability and Sanctions
Violations of the Collection Acts, such as failure to comply with the authorization requirement or improper use of funds, are subject to sanctions in the form of fines or criminal measures. In addition, the collecting organization can be held liable for damages related to the collection.
Supervision and Proof Obligations
Reporting and Documentation Obligations
After completion of a public collection, the collecting organization is regularly required to submit a comprehensive report to the authorizing authority. This includes:
- A detailed report of the collection results
- Detailed breakdown of expenditures
- Proof of use in accordance with the intended purpose
Public Participation and Transparency
Some Collection Acts require the publication of the results of public collections. This serves to promote transparency and inform the public about the use of the collected funds.
Tax Aspects
Charitable Status and Tax Benefits
In a tax context, the charitable status of the collecting organization is of central importance. Only organizations recognized as charitable under the Fiscal Code (AO) by the tax authorities may issue donation receipts, which enable donors to claim tax deductions.
VAT Treatment
The conduct of public collections is generally exempt from value-added tax (VAT) provided they serve a charitable purpose and no remuneration is involved. Different regulations apply to commercial activities that do not pursue charitable objectives.
Public Collections in International Comparison
European Law
A unified European regulation does not currently exist. The legal frameworks for public collections are developed at national level. However, a cross-border aspect may arise with online donation appeals, in which case international private law regulations and national collection laws must be observed.
Literature and Sources
- Collection Laws of the German Federal States
- Fiscal Code (AO)
- Commentaries on Donation Law and Collection Act
- Regulations on the Implementation of Public Collections
Conclusion
The legal consideration of public collections in Germany is shaped by a multitude of state-specific regulations. The focus is on the protection of public order, transparency, and the proper use of collected funds. Due to the central importance of charitable status and the protection of public trust, strict compliance with legal requirements is essential. A comprehensive overview of the state-specific regulations as well as the generally applicable tax principles is always recommended prior to conducting a public collection to ensure a legally compliant organization and execution.
Frequently Asked Questions
Who is authorized to conduct a public collection?
The authorization to conduct a public collection is basically regulated by law in Germany. According to the respective Collection Acts of the federal states or the Collection Act (SammlG) of the federal government, a public collection may generally only be conducted by legal entities, such as registered associations, foundations, or public-law corporations. Private individuals are excluded in most cases. The organizing entity must pursue charitable, benevolent, or religious purposes within the meaning of the Fiscal Code (§§ 51 ff. AO), which must usually be proven by an appropriate certificate of charitable status from the tax office. Applicants are also obliged to demonstrate the reliability and professional suitability required to conduct the collection. This is generally evidenced by police clearance certificates of the responsible individuals as well as evidence of the proper execution of previous collections. Furthermore, a detailed description of the collection purpose, planned procedure, intended use of the collected funds, and intended allocation of resources is often required. The absence of these prerequisites generally leads to the denial of authorization in practice.
What authorizations are required for a public collection?
A public collection generally requires an official permit. The responsible authority is usually the public order authority at the location of the collecting organization or the local city or municipal administration. The application for authorization must be submitted at least several weeks before the collection begins and must contain numerous details, such as the period and geographical area of the collection, the method of execution (e.g., street collection, house-to-house collection), information about the organizer, purpose of the collection, and the intended use of funds. Authorities especially review the charitable status, the credibility of the collection purpose, and the reliability of the organizer. In certain cases (e.g., for nationwide or statewide collections), special procedures with additional requirements may apply. Collections without authorization are administrative offenses in most federal states and may be sanctioned by fines or prohibition orders.
What documentation and reporting obligations exist for public collections?
After the completion of a public collection, organizers are legally required to prepare an accurate and complete accounting of the collection result and the actual use of the collected funds. This accounting must be submitted to the competent authorizing authority within the stipulated deadline. It generally includes a statement of all revenues, expenditures (including administrative costs), detailed use of funds in line with the stated collection purpose, and evidence of the disbursement and use of funds. This detailed documentation serves regulatory oversight to prevent misuse and misappropriation of the collected funds. Violations of documentation and accountability obligations can result in sanctions such as repayment claims, fines, or even future collection bans.
What legal requirements apply to the use of funds?
Funds collected may be used solely for the charitable, benevolent, or religious purpose specified in the permit and application. Any use of funds contrary to the purpose is prohibited under the Collection Acts and may result in civil, regulatory, or even criminal consequences. Additionally, only reasonable administrative costs may be covered from the collected funds. Excessive administrative costs or profit-making intent are legally inadmissible. The supervisory authority must be given a thorough account of the use of funds. Donation receipts may only be issued after actual receipt of the donation and exclusively for permitted purposes.
What sanctions apply for violations of collection laws?
Violations of collection laws can result in various sanctions. These include administrative measures such as fines, coercive fines, or immediate cessation orders issued by the authorities. If funds are misused or collected without a permit, criminal offenses such as fraud or breach of trust may also be involved, which can have significant criminal consequences for the responsible persons. Revocation of charitable status and loss of tax privileges under the Fiscal Code may also result. Additionally, violations can give rise to civil claims for damages by donors or third parties.
Are all fundraising activities subject to the Collection Act?
Not all fundraising activities are necessarily subject to the Collection Act. Collections in the private or family sphere without public appeals, as well as collections within the framework of closed events (e.g., club celebrations, church services, school events), are generally exempt from the authorization requirement and the strict rules of the Collection Act, provided they do not address the general public in public spaces. Purely online fundraising campaigns may also—depending on the federal state—fall outside the scope of the Collection Act, as long as there is no direct collection in public spaces. However, even in these cases, the rules on use of funds and charitable status must be observed, insofar as tax advantages are to be claimed.
Are there special regulations for advertising and collection service providers?
Advertising and collection service providers who solicit donations or conduct collections on behalf of charitable organizations are also subject to the provisions of the Collection Act. They must be commissioned by the charitable organization and be named in the collection application as well as in the authorization documents. Agreements on fees, commissions, or administrative expenses must be disclosed transparently, and the costs must be reasonable in relation to the collection proceeds in order not to endanger the charitable status and permissibility of the collection. Authorities regularly examine the appropriateness of cost allocation and can prohibit the collection if the expenses for advertising and collection services are excessive.
