27. September 2005 Monika Granja, Czech Donors Forum

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27. September 2005Monika Granja, Czech Donors
Forum
Percentage Philanthropy Workshop
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Czech Donors Forum

• The Czech Donors Forum (CDF) is a non-profit
  initiative, which provides support and leadership
  to the donor community in the Czech Republic. Its
  mission is to support the development of
  organized philanthropy and to serve the Czech
  donor community (360 foundations, 900 foundations
  without endowment, corporate and community donors)

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CDF Mission

• To support and strengthen philanthropy in the
  Czech Republic
• To provide giving
• To strengthen foundation sector
• To improve the environment for donors

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CDF Programs

• Foundations and Foundations without endowment
• Corporate philanthropy development
• Building Favorable Environment for Donors and the
  Non-Profit Sector
• Donors Message Service (DMS)
• Education and research
• International cooperation

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CDF central spheres of interest

• consolidation of foundations and endowment funds
• creation of conditions favorable for corporate
  giving
• improvement of the legal environment of
  philanthropy, namely the advocacy of the
  possibility to allocate 1 of tax
• promoting best practice

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1 Project
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Reasons of creating 1 Project

• Major foreign donors leaving the Czech
• Republic
• To find new local and more balanced resources of
  support for NGOs
• To diversify NGOs income
• To strengthen position of non-profit sector in
  the society

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CDF roles

• Elaborate 1 law
• Getting consensus
• Campaign and advocacy

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Elaborate 1 Law

• In 2003 CDF sets the Legal group of experts
• Legal group prepared the legal basis of the 1
  Law (the Amendment to Income Tax Law)
• CDF prepares analysis of the political
  background, economical analysis, experiences from
  the CEE
• In 2004 CDF passes 1 Law to the legislative
  process

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The Model of 1 Law

• 1 Law as a part of the Income Tax Law
• Recipient of 1 - public benefit NGOs
• Provider of 1 - physical entities, who are
  paying income tax
• Tax offices - administration of the distribution
  process

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Getting consensus

• CDF sets the Advocacy and Communication groups
• Advocacy group prepared the strategy of promotion
• Communication group prepared the campaign strategy

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The communication campaign and advocacy

• Two main goals
• Inform NGOs, media, political representatives
  (media campaign)
• Promote the 1 Law (negotiation with the
  government boards, political representatives)

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Communication campaign

• 1 for better life

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Target groups of the campaign

• NGOs
• Media
• Politicians
• Tax offices
• Ministry of finance

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Methods of the campaign

• Internet (www.rozhodni.cz)
• Press information
• Public opinion research
• Radio, TV

• Newspapers
• Seminars, conference
• Individual meetings (NGOs, politicians)
• Print materials (leaflet, brochure)

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www.rozhodni.cz
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Public opinion research

• In June 2005 CDF carried out public opinion
  research
• 509 respondents in age 15 69 years
• Question Would you like to have an option to
  allocate 1 from your taxes to public benefit
  NGO?
• More than 50 of respondents said yes (54 of
  them women, 46 man)

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Advocacy

• Creating Initiative for 1
• Negotiation with the Ministry of finance
• Negotiation with the Government (council
  committees)
• Negotiation with single political parties

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Initiative for 1

• The Initiative for 1  is an informal grouping
  of non-governmental non-profit organizations,
  which support the implementation of the option to
  transfer 1  of personal income tax (by physical
  entities) for public benefit activities.

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Initiative for 1

• Was founded in October 2003
• Today more then 120 NGOs are the members (big
  national NGOs, regional NGOs )
• CDF coordinates the communication and advocacy of
  Initiative

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Initiative for 1

• The mission
• Inform about 1
• Support the Amendment
• Negotiate with the politicians

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The arguments of the advocacy

• 1 adoption is political statement
• 1 distribution mechanism of minimum load for
  the Tax offices administration
• 1 involves the citizens to the public policy
• 1 brings new local sources for NGOs

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1 Law in legislative process

• 1 law CDF submitted to Government Council Board
  of NGOs
• In May 2004 Board accepted 1 law and
  recommended Government to submit it to Parliament
• In August 2004 Governments demission

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1 Law in legislative process

• In December 2004 new recommendation of the
  Government Council Board to submit 1 Law
• In April 2005 Prime ministers resignation
• In May 2005 new Government declaration
  proclaimed to adopt 1 law

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Reasons of long advocacy process

• Demission of the Government (1 Law has to be
  submitted to Parliament by Government)
• 1 is by KDU-CSL (political party in Parliament)
  communicated as possible funding of Churches
  from the state
• Back pressure from strong NGOs afraid to lose
  state subventions

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DMS project
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What is DMS

• DMS means a donating SMS standard service
  branded as Donors Message Service
• DMS is a traditional public collection using the
  modern technologies

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Reasons for creating DMS project

• To find the new local and more balanced recourses
  of support for NGOs
• To develop giving
• To develop non-profit sector
• To find standardized and transparent system of
  giving
• Non commercial conditions

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DMS project

• Czech Donors Forum, all 3 mobile operators,
  content provider, bank (e-bank)
• The project offers NGOs to fundraise from
  individual donors through SMS
• All partners provide service for operational
  costs under 10. NGO gets 90 of all money sent
• (Instead of 60 -40)
• Mobile operators supporting marketing and
  promoting this as a CSR service

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Concept of DMS

• One phone number 87777 Same principle of SMS
  DMS_KEY WORD(eg. DMS WINGS)
• Same price for SMS (1 EUR)
• Central information - www.darcovskasms.cz

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DMS costs

• One DMS is 30 CZK VAT (19)
• Recipient of DMS (NGO) obtains 90 of the price
  DMS

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DMS and VAT

• From technical reasons DMS is burden with VAT
• prepaid cards VAT is charged upon credit
  purchase regardless of purpose or later use
• Contract possibility to separate
• Law on VAT and Law on Donations Tax donations
  are tax exempted

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DMS and VAT

• Operators and CDF set to solve VAT issue
• Finance Ministry did not deal with VAT issue
• DMS public campaigns TATRY and ASIE brought
  public attention and awareness
• Public pressure to solve the VAT issue (January
  May 2005 the national newspapers 38 times
  published VAT issue)

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Advocacy

• Operators and CDF put together Expert Group
• Members of Expert Group 1 tax consultant from
  each operator and representative of Ernst and
  Young
• Preparation of VAT issue solution
• shortterm
• longterm

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Shortterm solution

• Refund of VAT (collected from public campaigns)
  by the Government was proposed and achieved in
  the form of exceptional state subsidy
• Government committed by Act to prepare long term
  solution

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Longterm solution

• Expert Group elaborated Amendment to VAT Law
• Amendment submitted to Finance Ministry for
  remarking
• Government will submit Amendment to Parliament

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Reasons of successful advocacy

• From the beginning of DMS project CDF pressed to
  solve VAT issue
• CDF insisted on publishing the price of DMS apart
  form VAT (30 CZKVAT)
• Big public pressure
• CDF and all the 3 operators joined in solving VAT
  issue

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DMS in numbers

• Project starts in April 2004
• 74 NGOs participate in project
• Total 3.1 million DMS sent so far
• Project ASIA (Civic association Adra, Public
  benefit corporation People in need, Caritas )
  1. 6 million DMS
• Project TATRY (Foundation Environmental
  Partnership) 300.000 DMS

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Conditions for NGOs to participate on DMS project

• Public benefit NGO
• Provide documents annual report, financial
  report, certification of its existence for at
  least 2 years
• Conformation of conducting a public collection
  via telephone line
• Propose the purpose for which the acquired
  resources will be utilized

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www.darcovskasms.cz
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DMS communication
Corporations - partners
Clients of mobile operators
DMS
NGOs
Media
Government and public officials
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Thank you for your attention

• Further information
• www.darcovskasms.cz
• www.rozhodni.cz
• granja_at_donorsforum.cz