Category: Blog

Blog, NPO

How a Non Profit Association is financed – the main sources of income

Associations have different ways of obtaining the funds necessary for their functioning and for the conduct of their business.

The most common is undoubtedly the request for a registration fee to the various members (membership fee), necessary to be part of it and have the right to vote in the assemblies; to these will be added the membership fees of the members to the various activities of the Association. Read our post How should the piece of proof be made to a member for the payment of the social fee or an activity?

These funds will be integrated through:

any c ontributions straordinar the required members in order to cover increased costs or losses that may arise from the development of institutional activities;

liberal disbursements , whether made by members or by third parties (natural persons, companies, entities), to support the institutional purposes of the association; read our post The Liberal Payments to entities and associations: how they work

inheritance and testamentary bequests ;

contributions from institutions (municipalities, provinces, regions, public bodies, etc.); read our post Associations and courses for schools. Are they exempt from VAT?

fundraisers , to be organized solely and exclusively to raise money to finance the Association’s activities. The funds thus collected, in addition to being excluded from the VAT regime, do not contribute to the formation of income and are exempt from any other tax (e.g. entertainment tax). These tax concessions, however, are recognized only if the fundraisers are public , carried out occasionally and concomitant with celebrations, anniversaries or awareness campaigns.

The reference legislation (art. 2, Legislative Decree 460/1997) does not specify, however, when public collections can be considered “occasional” and therefore benefit from the aforementioned tax breaks. To protect yourself from any tax disputes, it is good to respect the conditions set out in art. 25, paragraph 2, of Law 133/1999 (article containing tax provisions relating to ASDs in the 398/1991 regime): the number of events during the tax period must not exceed 2 and the amount of funds raised in the tax period must not exceed the maximum limit of 51,645.69 euros . It is believed that the occasion remains even if the event repeats all the years and even if it lasts several consecutive days.

For public fundraising, pursuant to Article 8 of Legislative Decree 460/1997, it is also mandatory to draw up (regardless of the drafting of the REFA), within four months of the end of the financial year, a specific and separate report from the which must be clearly and transparently, also by means of an illustrative report, the income and expenses relating to each of the celebrations, anniversaries or awareness campaigns.

Blog, NPO

What are non profit organizations?

Is there still someone who works to achieve socially useful, profitless goals? The answer is yes, these are non-profit organizations, also known by the name of non-profit associations.

Today it is not uncommon to hear about non-profit bodies or associations, especially on the issue of migrants, yet not everyone knows what it is about.

The expression immediately refers to the term profit; but is it really possible to think that someone works and commits himself without putting profit as the ultimate goal?

Just think that in Italy non-profit companies have increased by 28% compared to 2001, so much so as to lead to a real reform of the third sector.

So the non profit has undergone, in recent years, a strong impulse which, however, must necessarily correspond to a qualitative growth in its services.

What are non-profit organizations: the definition

Defining exactly what non-profit organizations are is not easy at all. First of all, we say that these associations belong to the so-called Third sector, that is, the sector in which organizations that have an intermediate position between the market and the State are placed.

What exactly does a non-profit organization mean? This term has Anglo-American origins and derives from the union of “not” with the name “profit” and is therefore used to indicate those organizations that operate non-profit, that is, profit and which are characterized by having as objective the good common. To these entities the State recognizes legal personality, which allows it to separate the assets of the entity from that of the administrators, protecting it from the risk of capital confusion in the event of debts.

The fact that the entity is “non profit” does not mean that it does not produce assets: the only difference is that the profit made is never distributed among the members but increases the common assets to be used in other operations of Volunteering.

All non-profit organizations pursue altruistic ends and often operate in areas of the world affected by hunger, wars, illiteracy and epidemics. Furthermore, for some years many organizations have taken care of the protection of the environment, in consideration of the worsening phenomenon of global warming.

What and how many types of non-profit organizations are there?

It must be specified that different types of non-profit associations can be traced. We will try to clarify, taking into consideration two of the main subdivisions.

First of all, from a fiscal point of view, these entities can be distinguished in:

non-profit organization: entity in possession of a specific tax qualification in correspondence with certain legal requirements.

non-commercial entity, that is, an entity that does not deal exclusively or predominantly with a commercial activity;

commercial entity, i.e. the non-profit organization which mainly carries out a commercial activity.

A second possible classification is the one that takes into account the legal point of view. In this regard, non-profit entities can be structured in different forms:

  • recognized associations;
  • social promotion associations;
  • amateur sports associations;
  • unrecognized associations;
  • foundations;
  • committees;
  • voluntary organizations;
  • Onlus;
  • social enterprises;
  • social cooperative trusts;
  • non-governmental organizations.

Each association or entity therefore pursues its goal in a different way, without prejudice to the common point that all of them reside in the lack of a profit.

Who works in non-profit organizations?

Given the free service, one of the most complex aspects for non-profit organizations is to find staff. For some years now, bodies have been focusing on organizing training courses and traineeships to recruit human resources, especially young graduates and recent graduates.

Through training and awareness, more and more young and motivated resources will contribute, contributing to the cause, making it their own.

View More