GERMANY. Current situation: Facts and figures from the 2010 CF-GSR survey

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1 GERMANY Community foundations Current situation: Facts and figures from the 2010 CF-GSR survey Number of community foundations at October 1 st certified CFs out of about 250 in total Number of community foundations established in Total sum of assets, including endowments, at the end of About US$ 157,404,000 Total sum of grants made by community foundations in US$ 12,9 million Total sum of income/donations in US$ 22.3 million Percentage of population that has access to a community About 30% foundation. Community foundation with the largest assets, including endowments, as of October 1 st 2010, and the size of its assets. CF Hamburg, US$ 21 million Complete list of community foundations (with primary contact name and address) For the complete list of German Community Foundations, see: Initiative Bürgerstiftungen (at the Association of German Foundations) 2 : Community foundation staffing Most community foundations in Germany have no paid staff. According to Initiative Buergerstiftungen, in total, almost one hundred persons are employed by community foundations on a professional basis, but the majority of community foundations is run by volunteers or part-time employees because the community foundations can not afford to employ full-time management, but are able to attract dedicated volunteers. 3 1 Volksbank s Aktive Buergerschaft counts a total of 257 community foundations, The difference in numbers may be due to factors such as: AB proactively approaches all newly founded CFs in Germany (some of which have not applied for the Certificate ) and a different approach in operationalizing the "10 characteristics". Per Aktive Buergerschaft s data, the percentage of population that has CF-access is 41% 2 Initiative Bürgerstiftungen is part of the Association of German Foundations. 3 Aktive Buergerschaft is a registered nonprofit association (e.v.) which aims at fostering civic engagement in Germany. It was established by the cooperative banking group as part of their corporate citizenship and serves as a CF support organization. It reports that about half of all CFs are run by volunteers only. About 20% have a full-time employee like a CEO or an assistant.

2 Legal environment The legal and tax environment in Germany is favourable to non-profits (including community foundations), and there are legal/ tax incentives given to organized philanthropy, including community foundations. Fiscal incentives for community foundations are the same as for any other non-profit foundation in Germany. A first law regarding tax relief for foundations (foundation tax reform) went into force on 1 January Recently, the German federal assembly passed a law to further strengthen civic engagement, which retroactively went into force starting on 1 January The additional tax incentives in this law benefit newly-established community foundations, as well as the donations towards the assets of already existing community foundations. Moreover, the amount for deductible donations has been raised. This continues to improve the conditions for the financial development of community foundations. There are basically two rules regulating tax deductions for donations: percent law: Donations up to 20% of the income of the donor are tax-deductible. This is an improvement, as before the amount for tax-deductible donations ranged from five percent up to ten percent (5% to 10%), depending on the individual non-profit purpose of the non-profit. Nowadays the 20 percent rule applies to donations for all charitable purposes million law: When a donor makes a donation to a foundation's endowment, he gets a tax deduction up to an amount of 1 million once in ten years. Married couples can claim tax deductions for the amount of 1 million twice in ten years. According to the old regulation, only 307,000 were tax deductible, and only if they were donated to a newly-established foundation. For community foundations the new law is very important as, not only has the amount of tax deductible donations been raised, but the law also helps community foundations to build up endowments in the long term by offering tax efficient solutions for donors who give to already existing community foundations. Voluntary engagement in community foundations has been facilitated. For example, a tax free amount of 500 per year was introduced as an allowance for special expenditures of volunteers. Also, there is a special regulation in place concerning the devolution of an inheritance. If the inheritance is donated to a charitable foundation within two years after the succession, the estate tax is annulled retroactively. Key trends affecting community foundation development 4 1. As of the 1 st of October 2010, there were 207 certified community foundations in Germany. Currently ( ), there are 207 community foundations active in towns and regions. Since the first establishment of a community foundation in 1996, a wide community foundation movement has developed. All over Germany, individuals and organizations commit time, passion and money in order to contribute to the positive development in their regions. Foundation assets grow even during the first year of the financial crisis. Despite the financial crisis, most of the 4 Sources: Official numbers provided by Initiative Buergerstiftungen/Association of German Foundations Other: Aktive Bürgerschaft e.v. (Ed.): Report Community Foundations in Germany. Facts and Trends Berlin 2009.

3 community foundations were able to increase their assets in The total sum of assets of community foundations in Germany rose to US$157 million, i.e. a growth rate of 20%. 2. As half of all conventional foundations have assets of up to , community foundations no longer play a minor role. The average of 2009 would level on a capital of approximately 600,000 or about US$836,000. Nowadays, community foundations can hardly be considered the little siblings of conventional foundations any longer. Due to the conceptually designed, longterm accumulation of assets within the framework of non-earmarked as well as earmarked endowment contributions to the basic assets or to donor-advised funds, as well as to being deeply rooted in society (especially with committed citizens in the bodies and projects), community foundations offer the potential to build more permanent resources for the civil society than conventional foundations ever could. 3. The first community foundation in East Germany was founded in 1998; in West Germany, in 1996/1997. Indeed, the new establishments in East Germany took place a little hesitantly, but almost every year saw the establishment of new community foundations. Twenty years after Germany s reunification, the regional community foundation sectors in East and West still display different developments. There are obviously fewer certified community foundations in East Germany compared to West Germany (East: 21, West: 86, on October 1 st, 2010). But it is important to note: East Germany is home to only about 10% of all community foundations; but only about 20% of the entire German population lives there. Many East German community foundations surprise with their diverse mainly volunteer-based and low-cost and yet successful projects. 4. Community foundations are an established foundation model of donors and contributors of the private sector. The main supporters of German community foundations are private individuals and companies of the private sector. In 2008, almost 70% of the endowment contributions came from citizens; a further 20% were given by private companies, making up two thirds of all contributions of organizations. With regard to donations, the community foundations can rely on private commitment as well: Almost half of all donations were given by private individuals, one third by companies. It seems that the basic idea of the community foundation model to raise private funds for self-organized, private, civic engagement is being successfully implemented in reality. 5. Community foundations in Germany have to build up their endowment much more to strengthen their sustainability and to be able to pay a professional administration. Many community foundations are in danger of losing influence by lacking financial back-up. With increasingly rough cuts in financial support by the Government of Germany, the reduction in public spending on the social sector, education, culture, and healthcare, for example, is already a great challenge for the German community foundations, as they do not want to take over tasks for which the government is responsible, or to jump in when public money/support is cut. Community foundation activity and impact The table below shows how CFs in Germany are bringing changes to the community, as reported by Initiative Buergerstiftungen (IBS) 5 : 5 Results by Volksbank-institution Aktive Buergerschaft with no major difference

4 citizens more involved in people-led development less poverty/more equal society Remarkably positive changes Positive changes Slightly positive changes No changes Some negative changes improvement in the position of marginalised groups more responsive authorities increased awareness of environmental issues support to arts and culture activities more trust within the community greater transparency/accountability stronger linkages across different parts of the community increased charitable giving through the community foundation Examples: 1. Support of volunteering services: Many community foundations - especially in East Germany are closely cooperating or even running their own volunteering agencies 2. Awareness of common/ public issues within the community: A lot of community foundations start their work by support a major local case: Dresden community foundation not only founded a museum for the popular writer Erich Kästner, but also actively helped in the Dresden flood catastrophe in Integration of pupils/citizens with a migration background: Due to the significantly lower knowledge in German language among children with a migration background, many community foundations offer special programmes to improve their reading, speaking and writing skills. 4. Educational issues: One of the classical projects organized by German community foundations. Volunteers regularly assist schools in improving the childrens (mainly kindergarten and primary school) reading abilities. Involving mostly senior volunteers helps integrating their abilities and experience.

5 Community involvement The following table shows how community foundations in Germany involve the community in their work: Are community activists involved on boards/committees? Do community foundations promote the use of volunteers from the community? Do community foundations participate in community issues and discussions led by others in the community? Do community foundations promote information about the community (e.g. through Vital Signs or similar research and sharing of information)? Do community foundations convene or lead discussions on issues of community importance? Are community foundation Boards or governance structures reflective of the diversity of the community? Yes Somewhat No Examples: 1. Regular round-table discussions in Stuttgart on subjects like palliative care or the accessibility of local cultural programmes for poorer families 2. Creation of a public park: Offering a green and modern environment for members of all generations (Community Foundation Achim) 3. Establishment of an office for volunteering services (especially in East Germany: Community Foundations Barnim Uckermark, Jena, Dresden etc.) Community foundations doing more than making grants 1. The majority of German community foundations are developing and realising their own projects instead of supporting other projects (although many do both). In most cases based on volunteering, the German community foundations give a good example of how citizens take active responsibility in community issues, and they actively organize volunteering in their community. Concrete examples would include mentoring projects for children with a migration background, like in Hamburg or Berlin or the support of children's reading abilities by volunteers. 2. One good example for all: Community foundation "Stiftung Bürger für Leipzig" (Saxony).With its endowment fund for education "Musik macht schlau" ("music makes smart") the foundation enables children and juveniles from low-income families to have access to musical education and supports interested and talented children in the long run, thereby the foundation advocates the enhancement of musical learning opportunities in kindergartens and schools. The foundation also wants to convince politicians from the federal state of its concerns. "Musik macht schlau" is widely supported: the musicians of the successful band Tokio Hotel donated the initial capital for the fund. Together with other godfathers, they take over the costs for the instrument lessons. Donation campaigns such as Citizen's picnic and a Citizen's lottery also benefit the fund. The Stiftung Bürger für Leipzig counts on a strong network. It closely cooperates with the sociocultural centre of "Geyserhaus e.v.", the music school "Tonicum", support associations, school board members, the music director of the university, parents, and teachers.

6 The importance of small grants Community foundations do not want to fully support a project, but to give impulse for civil engagement in a variety of issues. And a good project does not necessarily need a lot of money. Often, it is an association with a certain time and financially set requests who asks for small grants. German community foundations, next to their own projects, also support smaller projects with which they still have great impact. Smaller community foundations, which do not have the possibility to make their own large projects, engage in this way of grantmaking. Community foundation income Types of funds most frequently supported by donors 1. Donor-advised funds 2. Flow-through or Pass-through funds 3. Unrestricted funds Types of donors who give to community foundations 1. Individuals 2. Charitable organizations 3. Government (mainly on local or district level) 4. Companies/ Corporations Strategies for engaging and servicing donors 1. Community events like fund-raising brunches, concerts, etc. 2. Offering of legal advice (tax reduction, inheritances, etc.) 3. PR via good projects and diverse media 4. Donor Engagement Trends in donor engagement 1. Creating your own donor-advised fund 2. Donations on a flow-through-money-basis Assessing and communicating impact 1. Annual reports of CFs 2. Annual events for donors 3. via local media 4. Annual March Survey of Initiative Buergerstiftungen (Community Foundation Initiative) always including new data as of March 31 st 5. Annual report Community Foundations in Germany. Facts and Trends by Aktive Bürgerschaft and the online community foundations finder.

7 Networks Community foundations in Germany benefit a lot from national and international networks, and have intense as well as good relations among themselves. The Affinity Group Buergerstiftungen and the Initiative Buergerstiftungen serve as the independent federal network with outreach by their representatives in the several German states/länder. Twice a year in spring and autumn at working meetings of the Affinity Group at the Association of German Foundations, all certified community foundations meet regularly for exchange and joint learning. Additionally the affinity group meets at the Annual Assembly of the Association of German Foundations. Examples of successful national and international collaborations: 6 Community foundations in Germany, for example, cooperate within the network that Affinity Group and Initiative Buergerstiftungen offer. For that purpose, there are several opportunities: a. National Day of Community Foundations in Germany (1 st of October, initiated by the Affinity Group of the Association of German Foundations) b. National Day of Action of German Community Foundations (community foundations presenting their successful everyday s-projects throughout Germany on a single day) c. The "Affinity Group of Community Foundations" (Arbeitskreis Buergerstiftungen) offers community foundations the opportunity to discuss and network. Initiative Buergerstiftungen organizes up to three nationwide meetings as well as several regional meetings in order to support peer-to-peer exchange and learning among community foundations. d. The award Foerderpreis Profilschaerfung, granted by Breuninger Foundation is helping to develop community foundations profile and to give the whole movement new inputs. e. The award Alliance for Public Spirit (Allianz für Buergersinn; funded by Herbert Quandt Stiftung) aims to increase public and media awareness of the concept of community foundations and to highlight best practice as volunteering services and advanced training is concerned. f. The research done by Initiative Buergerstiftungen is published every year in autumn on October 1 st, the German-wide organized National Day of Community Foundations. On the basis of the March Survey it does research on community foundations, e.g. on their financial development, their funding and their activities in Germany. g. The website presents the newest developments and projects of Community Foundations in Germany, provides information about the work of community foundations throughout Germany and offers useful downloadable materials for free. h. Initiative Bürgerstiftungen s monthly newsletter reports on community foundations and current developments i. Public Relations and Advocacy Initiative Bürgerstiftungen informs those involved in the media, politics, and business about community foundations and their current developments in order to communicate the commitment of community foundations in Germany and to improve the conditions in which they are working. j. Publications by IBS/ CFI on the development of German community foundations k. Participation in international conferences by members of community foundations and IBS 6 For additional activities by the Volksbank s network Aktive Buergerschaft please see

8 Sources of support for community foundations Support organizations, infrastructure bodies, etc. 1. Initiative Buergerstiftungen (Community Foundation Initiative) 2. German Federal Government 3. Several Länder (states) governments and municipalities 4. Others 7 Availability of other types of support 1. Technical assistance quite available 2. Peer visits and networking support very available 3. Skills training very available 4. Information, knowledge management, and research support very available Advocacy in public policy The Stuttgart CF participates in round-table discussions on the project culture for everybody. History of community foundations in Germany 8 When the first community foundations were founded in Germany in 1996/1997, no one could see where the development of this new form of civil participation would go 9. While the tradition of charitable endowments in the historical German states dates back to the late Middle Ages, the practice was pushed to the back of the public consciousness by the long-running success of the social welfare state. The post-reunification reform debate in Germany, which aims to address obvious deficits in education and social security and the danger of overburdening the state's capacities, requires the involvement of Civic-minded people. Throughout Germany, there are now some 250 community foundations fitting to the community foundation guidelines, partly adapted from the North American samples and partly adjusted to the German legal and social setting. With Buergerstiftungen/Community Foundations, people can donate, engage and act conjointly for their fellow citizens, and use the endowments earnings for the common good of the community or region. This makes Germany one of the countries with the fastest growing community foundation movement worldwide. In Germany at present, there's a special emphasis on community foundation work in the areas of education and social services, as well as youth, culture and intergenerational projects. The German state grants tax concessions to those who financially support these non-profit projects. Germany's community foundations are characterised by the principle that many 7 Bertelsmann Foundation see Amadeu Antonio Stiftung Aktive Buergerschaft see above Community Foundation Global Status Report, researched and written by Eleanor W. Sacks. Worldwide Initiatives for Grantmaker Support. Updated by the Initiative Buergerstiftungen and the Affinity Group of Community Foundations at the Association of German Foundations 9 The first community foundation in Germany, the BürgerStiftung Gütersloh (formerly Stadtstiftung Gütersloh), was established in December 1996 in Gütersloh, following the initiative by the entrepreneur Reinhard Mohn (Bertelsmann AG) and the Bertelsmann Stiftung. The second community foundation was formally established in December 1997 in Hanover, at the initiative of Professor Dr. Christian Pfeiffer (later Minister of Jusice of the State of Lower-Saxonian). (E. W. Sacks:2008)

9 citizens donate for many goals to serve the public good in a given community or region. But they strongly differentiate when it comes to the size of their financial endowment or the number of donors. There are currently (1 st October 2010) about 29 community foundation euro-millionaires in Germany, mainly in large cities such as Dresden, Hamburg, Hannover or Stuttgart. But due to their competent work in serving the public good, active community foundations have also been established in smaller communities. In the early years the development of community foundations was fostered by the Bertelsmann Stiftung, Körber Stiftung and other private foundations, which considered community foundations a particularly attractive vehicle for donors of moderate wealth. Overseas support came from the Charles Stewart Mott Foundation and others, the integration and involvement of early community practitioners in international networks as TCFN or WINGS-CF helped enormously to implement the idea of Community foundations in the country. These above mentioned foundations provided administrative support and technical assistance to several community foundations during their start-up phase. Early on and parallel to these measures the Arbeitskreis Bürgerstiftungen (Affinity Group of Community Foundations) as part of the Association of German Foundations was consolidated as a regular forum for community foundations. The supporting foundations organized or supported opportunities for peer learning on the national and international level. They also set up a support structure for community foundations: Initiative Buergerstiftungen (Berlin), backbone of the Affinity Group and closely associated with the Bundesverband Deutscher Stiftungen (Association of German Foundations) and supported by major nonprofit foundations. The German community foundations movement does offer a specific characteristic: As the German term for community foundations Bürgerstiftung is not legally protected; at an early stage of their development, and as a lesson learnt from the US-movement, the Affinity Group of Community Foundations developed standards for Community Foundations as early as the year Since 2003 community foundations can apply for a Seal of Quality, a certification based on the above mentioned standards, called 10 Characteristics of a community foundation. These characteristics refer to qualities like political as well as majority-driven independence, autonomy or transparency of the community foundation. After the approval through an independent jury of experts the certification is awarded by the Association of German Foundations for the durance of two years. The certification gives a strong contribute to the trust community foundations enjoy in the German public, and is one reason that Germany is the country with the world-wide fastest growth of community foundations, in total number only second to the USA. The official numbers published by the Association of German Foundations therefore always quote the existing number of certified community foundations and only an estimate of those not successfully certified yet. Community foundations are widely seen as instruments to foster civic engagement on the local level. In contrast to the Anglo-American world, most German community foundations are not purely grantmaking organizations. They do not confine their activities to providing financial support for charitable projects, but also develop, conceptualize and implement their own programs very often in a very innovative and sustainable way.

10 Support Organization: Initiative Bürgerstiftungen History and purpose 10 To create a sustainable and lasting support to the promising development of community foundations in Germany, as well as to overcome the limitations of the voluntarily run Affinity Group of Community Foundations, the Initiative Buergerstiftungen (Initiative for Community Foundations, IBS) was founded in 2000 as backbone of the Affinity Group and an independent advocate for the community foundation movement. As a project within the Bundesverband Deutscher Stiftungen (Association of German Foundations), several private foundations such as Robert Bosch Stiftung, Breuninger Stiftung, Körber Stiftung and the Federal Ministry of Family Affairs, Senior Citizens, Women and Youth guarantee the funding. Overseas support comes from Charles Steward Mott Foundation. Since the beginning the initiative has been supporting the existing community foundations and movements to establish them on the regional and national levels. With strong ties with the Affinity Group of Community Foundations, the IBS supervises the awarding of the quality label Guetesiegel for community foundations, which the Association of German Foundations hands out for the period of two years. It is a financially, in regard to contents, independent project of the Association of German Foundations and its services are free of charge. Within the framework of its role as an independent advisor and facilitator for Germany's community foundations, the Community Foundations Initiative also concentrates on selected special projects with a topical or regional focus, for example, the appraisal of cross-generational project work or the special initiative Community Foundations in East Germany. The international exchange of ideas and opinions especially with the Anglo-American community foundations and foundations in Central and Eastern Europe is of enormous importance to the German community foundation movement, which is why the Community Foundations Initiative maintains close contact with transatlantic and internationally- oriented organisations (TCFN, WINGS-CF, CoF, CFC, efc). Structure and organization 1. No membership is necessary. 2. The paid staff of the Inititive Buergerstiftungen consists of four people: Gabriele Fleischer (secretary), Axel Halling (project assistant (100 %), Ulrike Reichert (project assistant (60%), Dr. Burkhard Küstermann (project leader). 3. The Affinity Group of the Association of German Community Foundations is headed by Nikolaus Turner, Member of the Board of Trustees, Buergerstiftung for the District of Fuerstenfeldbruck. 4. Additional project starting 2008: Supporting the movement of community foundations in East Germany. 5. Main sources of income, partners: Association of German Foundations, Breuninger Foundation, Robert Bosch Foundation, Körber Foundation, Charles Stewart Mott Foundation, Federal Ministry of Family Affairs. Recent accomplishments offering access to community foundation-related information via homepage, including advice on organizational first steps for establishing a community foundation distribution of newsletter on community foundations organizing/ taking part in/ supporting all kinds of community foundation-related events exchange of best practices/ successful projects via poll of community foundation projects offering several readers concerning community foundation business in.pdf and print Community Foundation Global Status Report

11 Current challenges/future developments preparing new initiative to support community foundations in former East Germany intensifying network with/between community foundations in Germany updating the increasing amount of information on old/new community foundations Additional resources The Initiative Bürgerstiftungen website is: List of current downloads: Correspondents: Dr. Burkhard Küstermann, Axel Halling, Initiative Buergerstiftungen (IBS) / Initiative for Community Foundations and Nikolaus Turner, Affinity Group of Community Foundations in Germany, Association of German Foundations, Berlin Support Organization: Aktive Bürgerschaft History and purpose 11 Aktive Bürgerschaft is a non-profit organization which was founded by several enterprises of the cooperative banking group in It has been engaged nationwide in strengthening voluntary action and non-profit organizations, corporate citizenship and civil society since Since 2002, Aktive Bürgerschaft (AB) runs its own support program for community foundations. It provides support in establishing, organising and promoting community foundations in Germany by the following services: since 2002, AB gives an annual award ("Förderpreis Aktive Bürgerschaft") to CFs to promote the CF concept, attract public attention to it and to highlight best practice personal consulting and technical support for newly emerging and existing CFs AB supports peer-to-peer exchange and training of community foundations, for example by regional networking meetings for community foundations ("Forum community foundation") AB publishes best practice guides for community foundations (e.g. on setting up a CF, fundraising, marketing, financial management etc.) annual report on the development of community foundations in Germany and in each federal state: "Länderspiegel Bürgerstiftungen" online community foundation finder which facilitates access to CFs and increases transparency by publishing basic financial data: special website with services for community foundations: monthly newsletter which informs subscribers from politics, the media, non-profit organisations, businesses about community foundations and civic engagement AB engages in public relations and advocacy, e.g. by offering a media service, by organizing Community Foundation Days with state governments like in Hesse A bi-monthly newsletter informs board members of community foundations on important developments as well as best practice in the field: Community Foundation Global Status Report

12 Structure and organization - Aktive Bürgerschaft is governed by a board of directors (7 members) and a supervisory board (24 members from civil society, politics, the media and non-profit researchers) - Aktive Bürgerschaft works nationwide with 11 staff from offices in Berlin and Münster. It runs 4 programs: community foundations, corporate citizenship, civil society and service learning. - Aktive Bürgerschaft is funded by banks and corporations from the cooperative banking group. Recent accomplishments We are intensifying our efforts to offer board development and training opportunities, e.g. by our "Forum Community Foundations" which reached 130 board members this fall. AB developed a strategic management tool for CFs: the Community Foundation Check which provides a framework for the strategic management and evaluation AB s community foundation finder facilitates access to CFs in Germany and increases transparency. We are working on enhancing the functions of the CF finder which by now contains financial data, self-portraits and press articles of more than 70 %of CFs Our annual award Förderpreis Aktive Bürgerschaft has become an excellent tool to reach decision makers and to promote the knowledge of CFs. It is awarded in a ceremony in front of more than 500 guests from politics, the media and civil society. Current challenges/future developments Some of the main challenges will be: to provide training opportunities for CFs and support them in achieving more organizational and financial sustainability to disseminate the management tool and support CFs with the implementation to facilitate the establishment of CFs in Eastern Germany as well as in other underserved areas Additional resources Please see our annual "Report Community Foundations in Germany: Facts and Trends 2008": Correspondent: Bodo Wannow, Project Manager, Community Foundations and Bernadette Hellmann, Program Director Community Foundations, Aktive Bürgerschaft Other organizations that support and promote the development of community foundations Other support organizations for community foundations in Germany include: the Amadeu-Antonio- Foundation and the Bertelsmann Foundation. The Amadeu-Antonio-Foundation specializes on the development of community foundations in the eastern Germany.