Foundation sees fall in 1% tax donations
One of Hungary’s best-known children’s charities is having to appeal for more funds after the annual 1% personal income tax campaign left it markedly down on additional income compared to last year.
Every year Hungarian tax payers are able to donate 1% of their personal income tax to a charity of their choice, at no additional cost to themselves. To do so, however, they have to make their wishes known to the tax authority; if not, the 1% simply goes into the general state budget. This year, the National Tax and Customs Administration (NAV) was, for the first time, filling in electronic tax returns, and that seems to have impacted the money going to charities.
Writing in its regular newsletter, the Magic Lamp Foundation (Csodalámpa Alapítvány) said that it has received HUF 12.5 million through the 1% campaign in 2017, and thanked all its supporters. But it also noted: “Unfortunately, this amount is a HUF 3 million, or 20%, decrease compared to the previous year, which is a whopping 5% of our balance sheet total.”
Speaking exclusively to the Budapest Business Journal, founder Gábor Patzauer said he was sure that an “important reason” the tax donations were down was due to NAV filling in the forms, without needing any interaction from the taxpayer to become official. But he thought that was not the sole cause.
“The second reason could also be that, because of some well published scandals in recent years, the general public distrusts the NGO sector. Most of those who have direct contact with – or are beneficiaries of – an NGO act, but the general public is passive. […] Actually, it is very sad that so many people do not care enough to give their 1% to a civil organisation; it does ‘cost’ nothing but time and a very little effort,” he explained.
The founder was keen not to blame NAV itself, pointing out that tax payers had the opportunity to checked their tax return through the “Ügyfélkapu” portal, where there was still a possibility to direct their 1% to an NGO of their choice. He estimates that the e-tax returns covered about 40% of all income tax declarations this year. “For instance, in our case we ‘lost’ about 20% relative to last year (HUF 12 mln vs. HUF 15 mln in 2016) and about 600 taxpayers from the 2,900 in last year.” Patzauer says the shortfall is, generally speaking, not unique to his foundation; the loss is about average for charities of the size of Csodalampa this year.
Ironically, for the first time in 2017 the Magic Lamp Foundation had a dedicated online campaign using Facebook and Google Grants, which was managed on a pro bono basis by a professional team. “We even created a new, modern-looking home page at the start of the campaign. Our presence in the social media generated some more homepage visits, but those did not realise in 1% donations. One of the causes could be that this year we distributed our presence evenly during the campaign. In 2016 our presence was matched to the peak periods of tax returns.”
It is important to note that some foundations earned about the same amount as last year or even actually grew their take; why isn’t always clear, but it could be a bigger marketing budget, an important social cause, or simply an NGO-name that attracts more interest. “The Board of Magic Lamp will analyse and act on this year’s experiences in order to fare better next year,” Patzauer said.
The Magic Lamp Foundation helps children between the ages of one and 18 suffering from a life-threatening disease by granting them a wish, and was set up after Patzauer and his wife lost their own eight-year-old daughter to cancer in 2003.
At the time of writing, the foundation had made another 196 wishes come true to date in 2017. “That brings us to 3,228 wishes granted in total in the past 14 years, bringing joy, happiness, and hope to 3,228 sick kids.”
If you wish to make a donation to the foundation, you can do so through its website (csodalampa.hu/csodalampa/English).
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