Bureaucracy takes a bite out of charity donations

In 2005 Poles gave zł.61 million to 'public benefit organizations' (OPPs) through the option to designate one percent of their income-tax payments to charity. The figure represents a significant increase from the previous year's amount of zł.41.6 million. Nevertheless, if every taxpayer donated one percent of his or her income tax to OPPs, the organizations would have nearly zł.300 million at their disposal.

The director of Habitat for Humanity Gdańsk, Monika Żelazkiewicz, claims that one of the reasons for the disparity is Polish society's mentality. She said that people still think that this option is the same as a classic donation - just giving away their money. "But they would have to pay that money [as tax] anyway," she stresses.

Unsurprisingly, bureaucracy doesn't help potential donors. "The main problem is that the law gives the OPPs possibilities, but it also takes away from them by creating obstacles for those donating," Żelazkiewicz said.

Those willing to donate one percent of their income tax have to calculate the amount, take the money from their own pocket, go to a bank or a post office and make the donation. Then the donor submits the annual tax report to the tax office and could wait up to three months to be reimbursed for the amount donated. However, according to new regulations to be introduced in January 2007, the process will be simplified. The person willing to make a donation will indicate on the tax form which OPP should get the one percent, and the tax office will handle the rest.

Another issue is the very strict requirements an association or a foundation has to meet to gain the status of OPP. For this reason, renowned organizations such as Monar, which helps drug addicts and also deals with the homeless, have not received the correct status yet. As Monar's chairperson, Jolanta Łazuga-Koczurowska, explained, the organization is currently considering whether to apply for this status.

"The money received from the one-percent donations is not big, while large funds go to bookkeeping, reports and audits," she says. Łazuga-Koczurowska adds that even before it could consider applying, Monar had to introduce changes in its charter and undergo an audit.

"The law favors small organizations, the larger ones are carefully monitored and have to meet many formalities," she adds.