Financing the Work of the German Caritas Association

The German Caritas Association is not an affiliated group; it is an amalgamation of its member organizations. Each member organization is financially and economically independent and not supervised or controlled by the head office, but has its own supervisory board.

The financial statements 2007 (balance sheet, income statement and management report) presented hereafter only include the figures of the German Caritas association as the legal entity of the head office in Freiburg with its branch offices in Berlin, Brussels and Munich. It does not include the financial results of Caritas’ roughly 26,000 welfare services and facilities in Germany.

Income

Maintaining a stable income that can finance the comprehensive work of the German Caritas Association sustainably is a difficult task. Financial risks primarily result from the dependency on public funds. Altogether in 2007 the grants amounted to EUR 75.2 million, whereof EUR 11 million were spent for financing the statutory tasks at federal level of the Headquarter of the German Caritas Association, while EUR 64.2 million are assigned to special tasks and projects and were directly forwarded to the work of local providers.
Although for the next years a positive development of the national tax revenue as well as the church taxes is expected, a decrease in grants from these sources could not be excluded. Even if these subsidies nominally remain unchanged, owing to the increase in costs and wages in real terms they are decreasing.

The Grants We Receive Include 

• Church grants amounting to EUR 9.2 million.
  Of these funds EUR 5.1 million were spent for social projects and worldwide disaster aid of the International Department of Caritas Germany.
• Grants from the federal government amounting to EUR 42.4 million.
  EUR 38.2 million of these funds were forwarded to welfare services in Germany (including the community service done by young men instead of military service, asylum and immigration advice services, youth welfare services and support services for handicapped persons) as well as international aid. Only EUR 4.2 million were spent for the statutory tasks of the federal head office. 
• Grants from the European Union amounting to EUR 4.3 million.
  All of these funds were directly transferred to social projects. 
• Other sources of funds include proceeds from charity stamps and lotteries such as GlücksSpirale and Aktion Mensch.
  EUR 16.6 million of these funds were forwarded to the nationwide project work of Caritas welfare services and facilities.

Donations decreased from EUR 18.9 million in 2006 to EUR 18.2 million in 2007. While the willingness to donate was high after the tsunami disaster at the end of 2004, in 2007 people appeared to be somewhat weary of making donations to charities due to the lack of a large-scale disaster with high media coverage.

Funds donated to Caritas through charitable legacies or bequests in wills amounted to EUR 2.1 million. They are used according to the testator’s wishes.

Donations and legacies are important and indispensable for the funding of the work of the German Caritas association. They can diminish the dependency on public funds, but they can not abolish it. Furthermore, donations and legacies are usually assigned to specific purposes, primarily to the worldwide aid of Caritas international, the international department.

Investment income amounted to EUR 15.6 million. The proceeds result from short and long-term capital investments as well as rental and lease contracts. Parts of the investment income are destined for specific purposes, e.g. international aid.

Membership fees from the member organizations of the German Caritas Association and charitable religious orders amounted to EUR 2.0 million. The revenue from sales and events accounted to EUR 13.1 million, they are used to cover the expenses incurred.

Expenses

• 61.8 per cent of total expenses or EUR 83.3 million was the direct result of project work. These included EUR 28.01 million for Caritas’ projects in Germany and EUR 55.33 million for the International Department’s worldwide projects. Compared to 2006, there was a 5.2 per cent decrease in project expenses in 2007.
• Personnel expenses for the head and branch offices amounted to EUR 17.8 million. This was 13.2 per cent of the Association’s budget and showed a year-on-year increase of EUR 0.5 million. 
• Operating expenses amounted to EUR 25.1 million, which constituted 18.6 per cent of the budget. Compared to the previous year, these rose by EUR 0.9 million. Significant additional expenses occurred in 2007 due to the transfer of assets to the Benedict Kreutz Foundation, which was founded in 2006. 
• Expenditures for interest, grants to third parties and depreciation and amortisation amounted to EUR 8.3 million, which was 6.2 per cent of the annual budget.

Balance sheet 

• The financial assets include securities amounting to EUR 68.4 million. These securities are assigned to specific purposes and are not available. The item includes separate assets as well as the longterm assets of the pension fund. Correspondingly the balance sheet shows reserves of the Assistance funds amounting to EUR 53.3 million and provisions for pensions amounting to EUR 9.8 million.
• The current assets include other securities and credit at banks of EUR 127.4 million. This item primarily shows earmarked donations und grants which have to be spent in short term to finance liabilities resulting from earmarked funding. Correspondingly the balance sheet shows on the liabilities side funds for specific purposes amounting to EUR 114.4 million.

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