Commercial enterprises of associations or foundations in Turkey are subject to all law and legislations that may concern them during their operations. Although the administrative board of association has appointed an executive to the commercial enterprise, it is still responsible for the management and administration of the commercial enterprise. However, a commercial enterprise is subject to followings;
1) Commercial law 2) Law of Obligations 3) Law of Associations 4) Civil Law, in case, the commercial enterprise is affiliated with a foundation 5) Corporate Tax Law 6) Value Added Tax (VAT) Law 7) Labor Law, in case of employment of staff 8) other laws and regulation are in relation with its operational areas (e.g. Ministry of Agriculture in case of food production?
Considering the relevant regulations, it is obligatory for the associations to conduct an internal audit and then to issue an internal audit report regarding this audit.
There are several types of evaluation form formats. But, you can find a sample here (in Turkish) and revise it in accordance with your needs, if you want.
Where the relevant call for proposals allows for the work performed by volunteers to be considered as acceptable co-financing, such co-financing must be considered as eligible personnel costs in accordance with articles 181, 186 and 190 FR, and must take the form of unit costs.
These unit costs will be fixed by the contracting authority and provided in the call for proposal. The value of the volunteers' work may comprise up to 50% of the co-financing, the latter corresponding to the part not financed by the EU contribution.
This type of costs must be presented separately from other eligible costs in the estimated budget. The value of the volunteer's work must always be excluded from the calculation of indirect costs. Any eligible costs incurred by the beneficiary linked to the work of the volunteer, for example travel and accommodation, may be claimed separately as eligible costs.
For more information, please check out Companion.
VAT exemption is a kind of “full exemption”. So, no VAT is paid for the purchasing goods and services within the scope of the project.
For more information, please check out Communiqué for IPA II.
For "aid collection", the organization should take an active role and make a request. In other words, a CSO who aims to collect aid should apply for a permission from public authority. But donations can be realized by a person’s own will and it’s not compulsory for a CSO to apply for a permit. Besides, "aid collection" can be performed to achieve a designated goal, however, it’s not necessary to set a specific goal for donations.
For this reason, it's recommended to avoid such actions like advertising, making a call, directing people to donate, which may be perceived as "aid collection" until the application for permission to collect aid is finalized.
It’s recommended to create different bank accounts for aid collection and donations. Please be noted that the bank accounts for aid collection are inspected at the end of the permit period.
More details on this regard can be found at primary legislation below;
- Law of Associations (in Turkish)
- Turkish Civil Code (Provisions on Associations and Foundations) - (in Turkish)
- Law of Charity Collection (in Turkish)
- Regulation on Associations (in Turkish)
- Regulation on Charity Collection Principles and Procedures (in Turkish)
For more information on aid collection can be found at the website of DG of Relations with Civil Society.
Event management is a process to organize and manage activities effectively and properly. There are a number of significant principles that should be considered, especially in the organization and management of rights-based activities implemented by CSOs. Sivil Düşün Events Management Guide for Civil Society (in Turkish) is a recommended resource that contains detailed information about event management.
Necessary Documents for application of VAT exemption are as follows:
- VAT tax exemption information form (to be issued by both Contracting Authority and the Beneficiary)
- Copy of Grant contract
- Copy of Budget (Annex II of the grant contract)
- Application Letter
For more information, please check out Communiqué for IPA II
According to Article 99 of the Turkish Civil Code, “Association revenues consist of membership fees, income generated through association activities or association assets, as well as donations and aids.” Article 10 of Law No. 5253 on Associations regulates the issues of assistance and cooperation. Under this article, associations may receive financial assistance from, and provide financial assistance to, associations with similar purposes, political parties, labor and employer unions, and professional organizations, in order to achieve the objectives set out in their bylaws. The legislation sets out different procedures for donations received domestically and those received from abroad.
Article 21 of the Law on Associations regulates donations and assistance received from abroad. According to this provision, associations may receive in-kind and cash assistance from foreign individuals, institutions, and organizations on the condition that they notify the local administrative authority (mülki idare amirliği) in advance. The form and content of the notification are specified in the Regulation on Associations. Cash donations must be received through banks, and notification must be made before such funds are used.
Another fundraising activity is regulated under Article 100 of the Regulation on Associations. According to this article, fundraising activities conducted by natural persons, associations, institutions, foundations, sports clubs, and newspapers or magazines, pursuant to Law No. 2860 on Fundraising (Yardım Toplama Kanunu), are carried out under the authority of units responsible for civil society relations.
Article 2 of Law No. 2860 sets out the principles governing fundraising activities conducted by persons and organizations authorized to raise funds in line with their purposes and the public interest. Fundraising activities conducted within the structure of the Turkish Armed Forces, as well as donations and aids made by members or other persons to associations, unions, and their umbrella organizations, sports clubs, professional organizations, and foundations authorized to receive donations, as well as revenues generated from their own resources, fall outside the scope of Law No. 2860.
In addition to collecting revenues in the manner described above, associations may also raise funds—provided that the activity aligns with the public interest—for achieving their objectives, assisting persons in need, and carrying out or supporting one or more public services. In such cases, Law No. 2860 applies. Associations may collect such donations through receipts, donation boxes placed at designated locations, opening bank accounts, issuing donation stamps, organizing exhibitions, cultural or sports performances, raffles, tours, and entertainment events, or by using automated or electronic information processing systems. Under Article 6 of the Law, “persons and organizations may not conduct fundraising activities without obtaining permission from the competent authority. However, the President determines and announces which public-benefit associations, institutions, and foundations may conduct fundraising without permission. Unauthorized fundraising activities are immediately halted by security forces, and legal proceedings are initiated against those responsible.”
If the fundraising activity covers more than one district within a province, permission must be obtained from the provincial governor. If it is limited to a single district, permission is obtained from the district governor. If the activity covers more than one province, individuals or legal entities intending to conduct the activity must obtain permission from the governor of the province in which they are based, and the permitting governorate must inform the relevant governorates and the Ministry of Interior.
In order to establish an economic enterprise, first of all, "economic enterprise can be established" must be included in the statute of the association. After that, a board of directors decision must first be taken to establish the economic enterprise.
Members, donors and volunteers are important forces that support professional staff of CSOs. The growth in voluntary works in CSOs lead to growth in their operations. A good number of qualified volunteers enable CSOs to reach human resources which they could not have achieved with their financial capacities.
Benefitting from volunteers effectively is an important skill for CSOs. Volunteers provide support to the administration and to help accessing in-kind supports and financial resources. They also contribute to several different functions, such as promoting community engagement and participation in the society and to popularize the success and operations of the organization.
Besides,
- Working with volunteers enhances the recognition of the organization, ensures that its operations and works are acknowledged by the society,
- Volunteers act as a bridge between CSOs and society,
- Volunteers contribute to increase effectiveness of CSOs operations,
- CSOs implement projects/programmes with limited budgets, human resources and in other difficult circumstances. The support of volunteers enables CSO to implement their activities easier and in a more effective way.
- The support of volunteers provides motivation for the staff in CSO,
- Voluntary participation of experts, individuals who are well educated or people who are experienced in project management contribute to the positive impact on the efficiency, and quality of work of CSOs.
For more information, please check out
- Manual on the measurement of volunteer work, ILO
- “501 Common” website collaborations with volunteers
The beneficiary will be able to apply for VAT exemption certificate in accordance with one of the following criteria;
- If the allocation of grant is equal or less than 4 million TL, beneficiary shall apply to Directorate of Tax Office,
- If the allocation of the grant is more than 4 million TL, beneficiary should apply to Directorate of Revenue Administration in Ankara,
- If beneficiaries who are located out of Ankara and the allocation of grant is equal or less than 2 million TL, they should apply to the Provincial Directorate of Tax Office in their provinces. In absence of Provincial Directorate of Tax Office, beneficiaries have to apply to the Local Tax Administration (Defterdarlık) in their provinces.
- If beneficiaries who are located out of Ankara and the allocation of grant is more than 2 million TL, they should apply to the Provincial Directorate of Tax Office in their provinces. In absence of Provincial Directorate of Tax Office, they have to apply to Revenue Administration in Ankara
- In accordance with the Communiqué for IPA II and above criteria on the amount of the grant, exchange rates of the Central Bank of Republic of Turkey should be taken into account, while calculating the allocation in TL.
For more information, please check out Communiqué for IPA II.
In accordance with the Communiqué for IPA II, VAT certificate holder NGOs should prepare and submit the annual ‘IPA II Purchase Notification Form’ to the registered tax office by the end of February of the following year.
Annual IPA II Purchase Notification Form can be found in Annex 8 of Communiqué for IPA II at http://www.gib.gov.tr/uluslararasi_mevzuat
For more information, please check out Communiqué for IPA II.
Enjoyment and satisfaction: The volunteers gain joy and moral fulfillment along with life experience.
Self-confidence: Self-assertion, self-actualization and feeling useful while being a part of an activity lead to self confidence.
Teamwork skills development: With or without any job experience, voluntary work improves such skills like job sharing and collaborative success. Additionally, leadership skills will also improve.
Station and social status, new friends and milieu: The new social environment, acquired through voluntary activities, is to contribute positively to individuals' social lives.
New areas of interest: The CSOs working areas in which the volunteers are involved can enable them to get into new fields and, even new job opportunities might be available
Advocacy is an activity by an individual or group that aims to influence decisions within political, economic, and social institutions. Advocacy includes activities and publications to influence public policy, laws and budgets by using facts, their relationships, the media, and messaging to educate government officials and the public1.
More information on advocacy can be found at “The Culture and Creativity website” which was developed within the framework of an EU Programme in 2015.
1.https://en.wikipedia.org/wiki/Advocacy
When the economic enterprise makes a profit, dividends can be transferred to the association after the necessary tax deductions are made. Any cash transfer from the economic enterprise to the association is a profit share and withholding payment is required.
One of the main issues of CSOs is financial sustainability and regular access to finance. However, it’s worth to underline that the sustainability of CSOs does not only depend on accessing financial resources. Since its establishment, a CSO forms a whole of resources with members, volunteers, target audience, other stakeholders, local and international networks, organizational structure, legal status. For this reason, the concept of resource development is actually a development and management of above-mentioned integrated approach and securing its sustainability.
Access to finance and securing financial sustainability, is considered as the need and requirement of CSOs all over the world. It’s recommended that A CSO enables a financial sustainability which can be generated a predictable capital flow from different sources for carrying out its programmes and activities.
Project-based grants or donations can be seen as the first alternatives of CSOs However, the available resources for civil society actors are more than these and they are very diverse. Resources can be categorized as:
- In-kind supports,
- membership fees,
- Sponsorships,
- Grants, project-based supports,
- Donations,
- Crowdfunding mechanisms,
- Corporate social responsibility supports,
- Micro-credit or similar support loans,
- Solution partnerships,
- Commercial/economic activities, commercial enterprises of CSOs
- Social investments (impact investments, entrepreneurial philanthropy, etc.),
- Circular economy mechanisms.[i]
For more information, we recommend you to check out following resources. Please note that below resources are in Turkish.
- Resource Development Pages of STGM Website
- Resource Development Guide for CSOs, Dilek Ertükel, STGM
- STGM Videos on Resource Development
[1] Kaynak Geliştirme ve Yenilikçi Uygulamalar: Yerel STÖ, Ağ / Platform / İnisiyatif ve Aktivistler için Rehber, Eliş Berivan, Avrupa Birliği Sivil Düşün Programı, Aralık 2019 - http://sivildusun.net/wp-content/uploads/2017/06/3-SD-Kaynak.pdf
Lobbying is a form of advocacy, focusing to influence the law and decisions. It aims to influence local, national or international institutions where decisions are taken by representatives. In other words, lobbying attempts to directly influence the decision makers. Although there is a confusion between the concepts of advocacy and lobbying, lobbying can be considered as a part of advocacy efforts. In brief, advocacy does not only target decision makers, it is a long-term course and consists of many other aspects and components.
Pursuant to Article 102 of the Turkish Civil Code No. 4721, a foundation could be established by an official deed to be made in the form of a notary public or a testamentary disposition. In order for the foundation to be established, it is necessary to apply to the authorized court and ensure its registration.
It is possible to transfer funds from the association to the economic enterprise. This is a debt transaction. In order to avoid any problems in the audit in such transactions, the Board of Directors must take a decision about "the money will be transferred to the economic enterprise for which business" before the transfer.