Financing the Work of the German Caritas Association
The financial statements 2016 (balance sheet, income statement, notes 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 and Brussels. It does not include the financial results of Caritas’ roughly 24,300 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 2016 the grants amounted to EUR 94.4 million, whereof EUR 10.6 million were spent for financing the statutory tasks at federal level of the Headquarter of the German Caritas Association, while EUR 83.8 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 10.9 million. Of these funds EUR 7.4 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 73.0 million.
EUR 68.8 million of these funds were forwarded to welfare services in Germany (including the federal volunteer 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 1.7 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.
Donations
The movements in donations are to a large extent dependent on disasters with high levels of media coverage, leading to major fluctuations in donation proceeds for Caritas international. While EUR 41.7 million was collected in 2015, particularly due to aid projects in the Middle East, the victims of the earthquake in Nepal and for other emergency and disaster relief programmes worldwide, EUR 30.5 million in donations were received in 2016 primarily for aid projects to ameliorate the refugee situation and for the victims of Hurricane Matthew in the Caribbean.
Funds donated to Caritas through charitable legacies or bequests in wills amounted to EUR 7.5 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 10.1 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 6.9 million. The revenue from sales and events accounted to EUR 12.8 million, they are used to cover the expenses incurred.
Expenses
- 65.6 per cent of total current expenses or EUR 110 million was the direct result of project work. These included EUR 43 million for Caritas’ projects in Germany and EUR 67 million for the International Department’s worldwide projects. Compared to 2015, there was a 4.7 per cent increase in project expenses in 2016.
- Personnel expenses for the head and branch offices amounted to EUR 27.1 million. This was 16.1 per cent of the Association’s budget and showed a year-on-year increase of EUR 3.0 million, due to the 2.4 % increase in salaries in 2016 and new recruits, particularly for refugee work.
- Operating expenses amounted to EUR 27.6 million, which constituted 16.4 per cent of the budget. The increase in other operating expenses by EUR 0.7 million results from additional maintenance expenses for fire safety measures and the continued renovation of the Lorenz-Werthmann-House to improve its energy balance.
- Expenditures for interest, operating taxes, grants to third parties and depreciation and amortisation amounted to EUR 3.3 million, which was 1.9 per cent of the annual budget.
Balance sheet
- The financial assets include securities amounting to EUR 80 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 55.4 million and provisions for pensions amounting to EUR 11.4 million.
- The current assets include other securities and bank balances of EUR 158 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 137 million.
