How can a club lose its non-profit status?
July 12, 2023 | 50,00 EUR | answered by Thomas Tressel
Dear lawyer specializing in association law,
My name is Emma Keck and I am a board member of a non-profit organization. Lately, we have made some changes within the organization and I am concerned that we may risk losing our charitable status.
Our organization is dedicated to environmental protection and regularly organizes events to raise awareness about environmental issues. We mainly finance our projects through donations and membership fees. However, some uncertainties have arisen recently, such as the use of donations or the statutory alignment of our events.
I am worried that these uncertainties could lead to the loss of our charitable status. This would not only be problematic for our organization, but also for our supporters and donors.
Therefore, I would like to know what possible reasons could cause an organization to lose its charitable status, and what steps we as the board can take to ensure that we continue to be recognized as a non-profit organization.
Thank you in advance for your support and advice.
Sincerely,
Emma Keck
Dear Mrs. Keck,
Thank you for your inquiry regarding the charitable status of your association. As a lawyer specializing in association law, I understand your concerns and would like to assist you in ensuring that your association continues to be recognized as charitable.
There are several possible reasons why an association may lose its charitable status. One of the most common reasons is the failure to fulfill the purposes set out in the articles of association. This means that the activities and projects of the association are not in line with the charitable goals set out in the articles of association. It is therefore important to ensure that all activities and projects of your association are clearly and unequivocally focused on promoting environmental protection and are pursuing this purpose.
Another possible reason for the loss of charitable status is the improper use of donations. It is crucial that all donations and membership fees are properly recorded and used exclusively for charitable purposes. Clear rules and control mechanisms should be established within the association to ensure that finances are managed transparently and responsibly.
Furthermore, it is important for the association to regularly review compliance with all legal and tax regulations. This includes regularly reviewing the articles of association to ensure that they comply with current legal requirements.
To ensure that your association continues to be recognized as charitable, I recommend reviewing and potentially adjusting the points mentioned. It may also be advisable to seek professional support from a tax advisor or lawyer to ensure that all legal and tax requirements are met.
I hope that this information is helpful to you and I am available for any further questions you may have. Thank you for your commitment to environmental protection and best of luck for the future of your association.
Sincerely,
Thomas Tressel, Lawyer
