Charity Organisations

Some non-profit organizations are created by their founders as charities. This article should begin with the question "What is a charitable organization?" And the answer to it. The definition of "charitable organization" is contained in Art. 6 ФЗ №135 "On Charitable Activities and Charitable Organizations" of 11.08.1995. It is quite simple and understandable: charity is a non-governmental non-profit organization set up for charitable purposes and carrying out charitable activities for the whole society or for a particular category of persons. The list of charitable purposes is exhaustive and is contained in Art. 2 of the Law in question. Here are examples of such goals: promoting the protection of childhood, maternity and paternity, activities in the field of physical culture and sports, and so on.

Also, the Law contains the definition of charity. Charity is the voluntary activity of individuals and organizations for the disinterested performance of work, the provision of services, as well as for the disinterested transfer of property to citizens and legal entities. Gratuitousness of such activities is its main characteristic. Often, charitable organizations use the work of volunteers who carry out charitable activities for free. With such persons, charitable organizations conclude contracts that are of civil law character. The subject of such contracts is the gratuitous performance of works / services. The supreme collegiate management body of the charitable organization also carries out its activities on a voluntary, gratuitous basis. The founders of a charitable organization are not entitled to distribute the profits received by the charitable organization. The only purpose of creating a charitable organization is to carry out charitable activities in accordance with the tasks enshrined in the organization's charter.

It should be remembered that the charitable organization is non-profit, therefore, to charitable organizations, the provisions of Federal Law No. 135 "On Charitable Activities and Charitable Organizations" and the provisions of Federal Law No. 7 "On Non-Profit Organizations" are applied simultaneously. Charitable organizations can be created only in the forms of funds, public organizations and institutions. More than any organizational and legal forms of non-profit organizations for the creation of charitable organizations are not suitable.

The law contains significant restrictions on the activities of charitable organizations:

First, charitable organizations work only in accordance with charitable programs. These programs contain a set of activities aimed at solving specific tasks, determined in accordance with the statutory goals of the organization. The charity program is approved as the supreme governing body of the organization. To finance charitable programs, at least 80% of revenues for the financial year, received from non-operating transactions, business activities and business entities created by a charitable organization, must be used.

The next restriction is that the charitable organization has the right to use for the payment of administrative and managerial personnel the amount not exceeding 20% of the money spent by the organization during the fiscal year.

Another restriction is established as follows: 80% of the charitable donation donated by the benefactor in cash must be used for charitable purposes within 1 year from the receipt of such donation. Although the law allows you to depart from this rule in the event that otherwise is provided for by a charity program or by the benefactor who made the donation.

In addition to financial restrictions established by law, charitable organizations are required to strictly comply with the requirements for the provision of special reporting. In addition to accounting reporting, which is submitted by all legal entities, charitable organizations are obliged to provide special reporting to the Ministry of Justice. This reporting should contain the following information:

- Information on the financial and economic activities of the organization;

- information on the personal composition of the supreme governing body of the organization;

- information about the charity programs of the organization (their list and description);

- information on the results of activities of the organization;

- information on violations of the requirements of the Federal Law "On Charitable Activities and Charitable Organizations", if they are identified as a result of inspections of tax authorities, as well as information on measures to eliminate these violations.

In case of revealing repeated violations in the activities of a charitable organization, it can be eliminated by compulsory means.

The activities of charitable organizations are strictly regulated by law. Therefore, before registering a charitable organization, you should once again carefully study the current legislation, as well as the experience of long-standing and successful charitable organizations.