The Dutch ANBI foundation
The Netherlands offers different type of foundations, the ANBI foundation is the foundation (Dutch: Stichting) most commonly used for non profit organisations. ANBI stands for: ‘Algemeen Nut beogende instelling’, an entity serving a general purpose. Non profit organisations are also referred to as ‘NGO’ or Non Governmental Organisation.
What is an ANBI foundation exactly?
An ANBI foundation is a legal entity (a foundation). A foundation is formed by constituting a notary deed with a notary public. The foundation needs to have certain provisions in it’s articles of association to be able to qualify for ANBI status. The ANBI status application can be performed by sending your application, following a list of requirements from the Tax office.
What are these requirements?
- The organisation needs to serve the charitable purpose for at least 90% of it’s spendings.
- The organisation does not strive for profit with it’s charitable activities (It may make profit with commercial activities, but it must use this profit for the charitable purposes).
- The persons involved in the organisation fulfill the integrity standards (can not have a recent criminal record).
- No person or entity can manage the charity’s assets as if they are their’s. Board members and directors can not have a majority vote for usage of the funds of the charity.
- The charity can not keep more funds than reasonably is needed for the work of the charity. The own assets need to stay limited
- The payment for policy makers is limited to an expenses compensation or minimal compensation.
- The charity needs an actual policy plan, this needs to include the charitable cause, the way fundsa re generated and how the assets are managed and spent.
- The charity needs a reasonable balance between management cost and spendings.
- Funds that are left after closing the charity, need to be spent to a charity with a similar cause.
- The institution needs to follow the administrative requirements. The accounting needs to show which policy maker received which amounts of fees and declarations. The costs that have been made. And the nature of the income and the way the funds are managed.
- The institution needs to publish specific information on it’s own or general website. This consists a summary of the management and persons, the policy plan, the financial accountability, it’s activities and the financial compensations for it’s members.
(FAQ) ANBI Stichting
- What is the difference between an ANBI foundation and a regular foundation?
The difference between an ANBI foundation and a regular foundation is the ANBI status. The ANBI status is an extra step that needs to be performed after forming the ANBI. The ANBI also has certain tax exemptions, but also certain restrictions that a regular foundation does not have.
- What are the benefits of an ANBI foundation?
Donators to the foundation may receive tax exemptions for their donations. The ANBI foundation also has certain tax exemptions that stimulates the charitable aspect. There is no tax to pay on donations received, there is also no tax to pay on founders donating to the foundation.
- Can an ANBI foundation make profits?
Yes it can, as long as the profits are used to fund it’s main charitable cause.
- What can the ANBI spend funds on?
In short: Anything that benefits the goal of the charitable cause. This can include fundraisers, promotions, giveaways and so forth. And all activities that are related to that.
A foundation may involve other companies for assistance with it’s services. Imagine the World Nature Fund hires an event planner company to plan a fundraiser, or a digital marketing company to fix their website.
- What are the restrictions of an ANBI foundation?
In short: For obtaining the NGO status, the founders declare that the goal should not be to make the board members wealthy, or for board members to receive disproportionate amounts.
- May an ANBI foundation compensate board members?
Yes, but there are limits to board member compensation. For preparing and filing a meeting, a board member can receive a maximum of €356. For larger NGO’s there are different criteria.
- May an ANBI Foundation compensate it’s staff and volunteers?
Yes, volunteers may receive up to €170 per month or €1900 per year tax free.Above this amount the foundation would need to pay the salary through a payroll accountant and pay the employer taxes. The employee in this case has to include this in his income tax filings.
- Can an ANBI foundation pay out cost declarations to it’s members?
Yes, any declared costs (which has to be substantiated in the accounting with a proper document), may be paid out to members. There are no limits on such declarations. Of course the relevancy to the organisation and it’s activities should be clear.