Donations - from whom and what for?
Destatis, 8 February 2008
Donations are a topical subject not only at Christmas and during election campaigns. Negative news like those about Unicef also ensure media coverage. Last year the legislation relating to donations was reformed in the "Gesetz zur weiteren Stärkung des bürgerschaftlichen Engagements", a law to further improve the framework conditions for citizens' commitment and involvement. The resulting consequences will take few years' time to show in the results of income tax statistics. However, the data for 2001 to 2004 already provide interesting insights into the socio-economic structure of donors, the amounts donated and donation purposes.
Donation purposes
The legislator does not subsidize any possible donation but only donations for specific purposes laid down by law (Art. 10b and 34g Einkommensteuergesetz (EStG – Income Tax Act)). The largest group are donations for charitable, religious, public, scientific and cultural purposes and donations to churches (in the following referred to as charitable purposes). Second in terms of donation frequency are donations for political purposes. The term "donations" includes also membership fees.
As regards the amounts donated, contributions to funds – which make up the third group – exceed donations for political purposes, except in 2002. A person liable to pay taxes (meaning two persons if spouses are assessed jointly) may have included donations for several purposes in the tax return.
Table on the subject: Donations included in the tax returns
The readiness to give partly depends on the current situation. Large natural disasters like the Tsunami and the Elbe flood, for instance, help to raise funds at short notice; the course of the election periods has an impact on donations to political parties.
Donations included in the tax returns and their number
Donations included in the tax returns amount to some EUR 4 billion per year. The greatest increase in the amount donated was recorded from 2001 (EUR 3.7 billion) to 2002 (EUR 4.2 billion) (+12%), which was the year when the river Elbe overflowed its banks. After that the amount tended downwards but remained above the level of 2001. Increases of up to 79% were recorded for the funds area, while after a steep rise in 2002 (+81%) donations to political parties fell markedly (- 21% and -10%).
Compared with the amount donated, the annual changes in the number of donors were less pronounced (ranging from -5% to +4%). In the individual groups, however, the numbers varied differently, too: the number of persons donating money for political purposes went down from year to year, while after an increase by 10% (in 2003) the number of contributions to funds nearly doubled in 2004 (+98%).
Every third person liable for income tax contributes
When all persons paying income tax are subdivided into donors and non-donors, it turns out that the share of donors remains almost constant at one third in the period under review. Every year the donors account for a share of the overall income which amounts to nearly 50 percent. So the average income of donors (some EUR 50,000) is 66 percent higher than the average income of non-donors, which amounts to just under EUR 30,000. On the whole, the about 9 million donors included donations to the amount of around EUR 4 billion per annum in their tax returns. Thus the donors claimed 0.9 percent of their income as expenditure for tax-approved donation purposes. The fiscal authorities decided that of the donations included in the tax returns during the assessment period of 2003, EUR 2.9 billion were in fact tax-deductible. On average, that would be an approved donation to the amount of EUR 107 per taxpayer or EUR 325 per donor liable for income tax.
Taxpayers and total income
An average EUR 363 and EUR 372 were donated for charitable and political purposes, respectively, and EUR 12,900 were given to funds.
Do the rich give more?
As the income rises, the number of taxpayers who include donations in their tax returns increases. In 2003 the share of taxpayers in the income bracket of up to EUR 30,000 who included donations in their tax returns was about one fourth, while is was well above two thirds with persons earning EUR 100,000 and more. In contrast to that, the donation is highest in relative terms (3.6% of the income) in the income bracket of up to EUR 10,000 and it decreases steadily as the income grows. Only those who earn EUR 100,000 and over use an above-average share of their income (1.1 percent) for donation purposes.
Do children increase the willingness to give?
The group of persons liable to income tax is made up in nearly equal parts of married couples and single persons (who are unmarried but may have a partner). In the assessment period of 2003, married couples accounted for 63 percent of the donors and contributed 70.1 percent to the amount donated.
Of the 5.6 million donating couples, 96.9 percent included donations for charitable purposes in their tax returns, 12.0 percent donations for political purposes and 0.5 percent contributions to funds. Broken down by the number of their children (relevant for taxation purposes), only couples without children gave money for political purposes with an above-average frequency (13.6 percent), and most contributions to funds came from couples with 3 or more children (0.9 percent). Donations for charitable purposes were recorded for all groups of taxpayers to the same extent.
When we look at the amounts included in the tax returns, a different picture emerges: While couples with 3 or more children give 65.7 percent of their donations for charitable purposes and 26.7 percent for political purposes, couples without children focus on charitable purposes (71.1 percent) and funds (21.1 percent). Couples with 1 or 2 children give about 86 percent of their contributions for charitable purposes; the rest goes in equal parts to funds and political purposes.
Related to all taxpayers, most donors are found among couples with three or more children (44.6 percent). As regards the amount donated, single persons and couples without children show the highest ratio of 1.21 and 1.18 percent of their income, followed by couples with 3 or more children (1.15 percent).
This article is based on data from the annual income tax statistics, which covers all those assessed for income tax purposes. In 2001 there were about 27.8 million persons liable to pay income tax, with their numbers slightly falling until 2004. About half of the taxpayers are spouses assessed jointly. The results for 2004 are preliminary.
Detailed results are presented in the paper "Spenden in Deutschland" (only in German) published in Wirtschaft und Statistik 2/2006.
Author:
Dr. Nicole Buschle - Federal Statistical Office
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