Wednesday, August 5, 2020

Greens call for help for nonprofits

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Janecek, who is also a chairman for the Greens in the Bundestag’s Economic Committee, has therefore prepared an application which will be adopted by the parliamentary group on Tuesday and brought to the Bundestag later this week.

“There is indeed a KfW entrepreneur loan that can be used to finance operating resources,” says the application, which is available to the Handelsblatt. “However, the state’s liability for this loan is 90 percent, which is why, because of the remaining risk, as with the liquidity aids of the special program, the house banks are often reluctant to offer support to less profit-oriented companies. In addition, the entrepreneur loan is detached from the Corona emergency aid, and the interest rates do not fall under the relief from the special program. “

According to a survey by the Social Entrepreneurship Association SEND, more than a third of the companies surveyed fear that under the current circumstances they will no longer be able to do business after three months. Abandoned events, closed educational institutions and the declining purchasing power of customers are particularly problematic for social enterprises.

600,000 non-profit organizations in Germany

While the federal government was still firmly committed to promoting social enterprises in its coalition agreement, Janecek said, “However, until today it has not been able to present anything specific.”

Especially now in times of the corona pandemic, social enterprises are particularly dependent on political support, “since they are often active in sectors particularly affected by the lockdown and, according to the current status, many of them fall outside the funding grid”. The problem with social enterprises: they are so diverse in their corporate form that tailored support is difficult.

On Monday, the Federal Association of German Foundations and the Stifterverband, together with non-profit umbrella organizations and organizations, also appealed to politicians not to let non-profit organizations down. There are more than 600,000 non-profit organizations in Germany in which more than 30 million people are involved.

The call for help has apparently reached the federal government. Berlin wants to check how clubs can be financially supported in the corona crisis. This is the result of a letter from the parliamentary state secretary in the Federal Ministry of the Interior, Volkmar Vogel (CDU), to the members of the Union and the SPD, about which the dpa news agency reported.

Many non-profit associations, initiatives and other providers of political education, whose projects have so far been funded by the federal government, are facing significant liquidity problems, the letter said.

The Federal Government does not want to watch “how these important pillars of civil society engagement break away”. Because they made a contribution to social cohesion, in sport, in integration or in the prevention of extremism.

For this reason, one wants to find either “pragmatic solutions” in the right to grant – in individual cases, for example, by promoting online formats, because where face-to-face events cannot currently take place due to the contact restrictions.

It is also conceivable to forego the use of own funds or the assumption of cancellation costs for canceled events. In addition, the Ministry of the Interior has promoted the Ministry of Finance and the Ministry of Economy to include non-profit organizations that are already funded by the federal government under the budgetary title “Corona Emergency Aid for Small Businesses and Solo Self-Employed”.

Baden-Württemberg and Hessen are pioneers in support

“If the federal government puts together a new aid package, it should definitely open KfW’s liquidity aids and funding programs for non-profit companies,” said Janecek. The concept of emergency aid must be rethought.

“Baden-Württemberg is leading the way. There is an emergency aid program for companies with more than 10 employees, which is explicitly aimed at social enterprises. The federal government must work out appropriate aid with the federal states if we don’t want to lose a third of the innovative, social pioneering companies, ”he said.

Hessen has also started a new funding program called “Continuation of Association and Cultural Work” to cushion the financial consequences of the corona pandemic for the club and cultural landscape.

“All 41,000 non-profit associations can benefit from this program,” said Prime Minister Volker Bouffier (CDU) in Wiesbaden on Monday. Depending on the situation of the individual association, it can apply for up to 10,000 euros in financial support.

“The clubs are the glue that holds our society together, and that’s why we have to act,” emphasized Bouffier. The corona pandemic threatens the existence of sports clubs, cultural institutions and initiatives. The state government is therefore doing everything it can to maintain and support the association structure so that it can continue to exist, said the Prime Minister.

The financial impact of the coronavirus pandemic on non-profit associations is sometimes considerable and could quickly become a threat to existence, because associations and tax law do not create associations like corporations, which they can access in times of crisis.

More: The run on the new quick loans from the State Bank KfW begins. Read more here.

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