The effective donation depot

Note from the Effektiv-Spenden Team: This article contains information specific to donors registered in Germany or Switzerland.
Something has happened: A one-time event brings in an unusual amount of money. The sale of a company, for example. Or an unusually large bonus. Or a severance package. In such a situation, many people think about donating a portion of the sudden windfall. German tax law supports this plan: Up to 20% of annual income can be donated tax-free.

Save taxes now - decide later

However, donors often face a serious obstacle: in order to claim the transaction on their tax returns, they must make a binding decision as to where the donation should go. Many people feel overwhelmed by the decision and need more time. Others may already have a clearer idea of where their donation should go, but would like more time to spread it out over several years.

The Effektiv Spenden Depot

To meet these needs, we offer our Effektiv Spenden Depot for this purpose. This gives donors the opportunity to declare their donation directly to Effektiv Spenden and decide later on the specific use of the donation. This is possible because we can issue a donation receipt immediately upon receipt of the donation, which the donor can immediately use in his or her tax return, while he or she does not have to decide on the actual use of the donation until later. In its basic features, the Effektiv Spenden Depot is similar to the Donor Advised Fund (DAF) that is widely used in the English-speaking world. The Effektiv Spenden Depot can be set up in both Germany and Switzerland.

The favorable special case of inheritance

In principle, the same applies to inheritance. In fact, the tax environment is even more attractive. In Germany, for example, the law allows the recipient of an inheritance to donate up to 100% of the inheritance tax-free. This is even possible if the inheritance has already been accepted and the inheritance tax has already been paid. If the recipient decides to donate part of the inheritance within two years of the deceased’s death, this amount will also be exempt from inheritance tax retroactively. In this case, the donor will receive a refund of the excess estate tax paid. 

But even here, the heir often wants to separate the decision about the amount of the gift from their decision about where exactly it should go. This may be because they don’t know yet, or because they prefer to spread the gift over several years. 

There is a solution for this too: our Effective Spenden Inheritance Depot. In this case, too, the donation volume is “temporarily parked” for tax purposes, not directly with Effektiv Spenden, but with a foundation set up by us for this purpose.  

There are no costs

The management of the Depot by Effektiv Spenden is free of charge. 100% of the donations deposited here will be forwarded to the charitable organizations of your choice without deductions at the charities of your choice. 

If you are interested and would like to know more, please contact us and we will discuss the next steps depending on your circumstances and your country of residence - Germany or Switzerland. For the actual implementation, you may also want to consult your tax advisor to ensure that the structure of the account is exactly right for you and your specific situation.