Background: Growing demand for transatlantic philanthropy
The US nonprofit sector is the largest nonprofit sector in the world. The United States' successful charitable sector is a model for nonprofit sectors in countries across the world including Germany. This success traces back to the American history which is dominated by the principles of self-realization of each individual in liberty, democracy, independence and freedom.
Each year, Americans (private foundations, individuals, trusts and companies) donate about 6.39 billion dollars to charitable projects outside the US. However, due to the lack of tax benefits for US donors, the majority of the donations do not benefit German organizations. This fact exists in sharp contrast to the observation that Western European charities are one of the major targets for US donations and more US donors wish to support German charitable projects.
Germany is one of the largest charitable markets for U.S. donations. More than 42 million US citizens trace back their roots to German ancestors. Many of those people still have close ties to Germany and to German relatives. In addition many US companies support local social projects as part of their public-relations work. On a transatlantic scheme this kind of public branding strengthens the relationship between the company's German subsidiary and the charitable project, in a way that attracts considerable media attention that benefits the company and the respective local community.
Incorporating American Friends of Germany, Inc. on September 21, 2005
The idea of establishing an organization which enables US citizens to do good abroad and, at the same time, to provide the maximum tax benefits for charitable contributions, was born in 2005. German citizen Stefan Winheller came up with this concept while he was living in San Francisco and writing his dissertation-thesis on "Non-profit organizations under US and German Tax Law".
He examined how the Internal Revenue Code treats cross-border grants to Germany. Winheller soon discovered that there was a great demand by US citizens to donate to German charities but the lack of tax benefits under US law hindered their ability to donate money freely. Based on these conclusions Winheller decided to found a charitable organization which would enable US citizens to support projects serving the public good in Germany and to receive the same tax benefits as when donating to a domestic US public charity. The new organization's task was to manage and to strictly supervise the proper use of the contributions exclusively for charitable purposes. In addition, the organizations goal would be to further the American-German friendship by - among others - establishing a student exchange program at Golden Gate University to prepare US students in their studies abroad.
The name "American Friends of Germany" was chosen to emphasize the historical closeness of the peoples of the USA and Germany.
During the next few months, painstaking and detailed research on the relevant law and regulations was compiled and the required paperwork was completed. Finally, Mr. Michael Rinné, a friend of Winheller from law school and a current member of the board of directors and treasurer of the corporation, filed the incorporation documents of the new organization with the State of Delaware. On September 21, 2005 American Friends of Germany was incorporated.
Approval by the Internal Revenue Service on August 8, 2006
On August 8, 2006 American Friends of Germany was recognized by the IRS as a §501(c)(3) IRC charitable tax-exempt organization.
German Office and Approval by the German Tax Authorities on April 12, 2007
Since 2007 American Friends of Germany maintains a German office. On April 12, 2007 the organization was recognized as a charity under German law by the German tax authorities.
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