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Significant Advancements for the 3rd sector

New non-profit package for Austria

Publication date: 21 Sep 2023

Transnational Giving Europe is thrilled to share some fantastic news accompanying the Austrian Federal Government’s recent charitable and donation package. This marks a significant milestone in the ongoing reform of the non-profit sector in Austria, promising substantial enhancements in the positioning of non-profit foundations within the country.

“The federal government’s package is a milestone for the entire third sector and also strengthens non-profit foundations. It is a clear recognition of their work for civil society! Only together will we overcome the challenges of our society today and in the future. Non-profit foundations can now do this faster and more effectively thanks to the improvements in their operations!” Ruth Williams, general secretary of the  Verband für gemeinnütziges Stiften, says.

Fostering Philanthropic Growth

Austria’s philanthropic sector is diverse and dynamic, encompassing a wide range of causes and organizations. It reflects the country’s commitment to social responsibility, cultural preservation, and addressing pressing societal challenges through charitable giving and non-profit initiatives. However, the philanthropic foundation sector in Austria has been relatively limited.

Nonetheless, since the introduction of tax deductibility for donations in 2009, charitable contributions in Austria have experienced a significant upswing. Furthermore, the 2015 amendment to the Federal Foundation and Fund Act has resulted in the establishment of approximately 100 new nonprofit foundations. The forthcoming reforms represent a steadfast commitment to expanding tax incentives, thereby cultivating a more favorable environment for charitable donations and nonprofit initiatives. These reforms also aim to dismantle prevailing barriers, particularly those affecting educational and cultural associations, ultimately promoting fairness and igniting greater dedication within the nonprofit sector. So, this equalization of non-profit status and tax deductibility for donations represents not only a commitment to fairness but also a catalyst for increased philanthropic dedication.

As Ruth Williams expresses, “The new framework has the potential to make more philanthropic investments available for essential projects – for example in education!”.

In this regard, we at Transnational Giving Europe express our heartfelt gratitude to the Austrian Foundation Association for their relentless dedication to enhancing the scope, caliber, and reception of charitable funding within Austria. Their steadfast backing of nonprofit foundations has played a pivotal role in catalyzing constructive transformations. The association has adeptly served as an advocate and nexus for charitable stakeholders in Austria, shaping a vibrant initiative committed to fortifying our society’s resilience. Their efforts stand as a noteworthy illustration of how cooperation and shared commitment can contribute to the development of a stronger and more compassionate community.

A Transformative Tool for Empowering Philanthropy

This package serves as an unequivocal recognition of the immense and invaluable contributions that non-profit organizations make to our society, especially in a world beset by a multitude of contemporary challenges, where the virtues of unity and collaboration stand out as our greatest assets. Non-profit foundations are in a stronger and more fortified position than ever with these improvements made to their operating framework. They are now exceptionally well-prepared to assume the leadership role in spearheading collective endeavours aimed at tackling the multifaceted and pressing issues that characterize our society today. As they navigate these challenges, non-profit foundations are not only fulfilling their immediate responsibilities but also playing a pivotal role in shaping a brighter and more promising future for generations yet to come. Their dedication to making a meaningful impact is a testament to the resilience and fortitude of the non-profit sector in the face of ever-evolving global challenges.

Ensuring legal certainty, the package also enhances the conditions surrounding charitable foundations. To incentivize the establishment of these foundations, the caps on the tax-effective consideration of capital stock donations are set to rise, presentation options will be made available, and the use of funds will become more flexible. In their initial years, foundations will have greater leeway to invest in their charitable purposes using the foundation capital itself, enabling faster responses to emergencies and crises. This flexibility also simplifies the accumulation of larger foundation capital. Moreover, the requirement of working for three years before applying for donation tax deduction will be shortened to just one year.

Towards a Philanthropic Future

To sum up, these transformative reforms in Austria’s philanthropic landscape, spurred by the government’s charitable and donation package, herald a new era for the non-profit sector. The words of Ruth Williams, general secretary of the VgS, echo the optimism and potential of these changes, emphasizing their significance for charitable foundations and civil society as a whole. These ground-breaking advancements and updates are propelling us toward a future where philanthropy takes its rightful place at the forefront of positive change and transformation in our society.