SMS giving is just one of the many new tools for charitable giving that are becoming ever more popular among donors.  As the license holder for the “Donors Message Service” (DMS) in Slovakia, the Slovak Donors’ Forum (SDF) has been instrumental in facilitating the provision of this service and increasing its value to both donors and non-profit organisations. The DMS provides public benefit organisations working on a wide range of issues with a simple and transparent mechanism for mobilising funds.

Modern methods of giving are, however, not always provided for by national legislations, as is the case in Slovakia where the 1973 Act on Public Collections does not contain any provision for charitable giving via SMS. Under this law, income from public collection is considered as a gift and is not subject to any tax. However, although the DMS mechanism is a non-commercial mechanism, since it is provided by mobile phone operators within the framework of their telecommunications services, pre-paid messages sent through DSM have until recently been subject to VAT.  The Slovak Donors’ Forum was keen to launch the DMS service in Slovakia in spite of these problems, since it nonetheless represented an important fundraising opportunity for non-profit organisations, and so went ahead with this in July 2007. In the meantime, SDF continued to advocate for the removal of VAT from pre-paid messages sent through the DMS.  The Czech Republic had already succeeded in doing this through an amendment to its Act on VAT, a move not possible within the Slovak system.

SDF’s advocacy strategy was to propose a refund scheme for VAT paid on SMS donations. Negotiations with mobile phone operators have now resulted in an agreement that the DMS mechanism will be part of a refund scheme established for other content services that the operators provide, thus relieving the VAT burden on pre-paid messages sent via the DMS without adding to the administrative burden of SDF or the DMS. This VAT relief on messages sent through the DMS came into effect on 1 June 2010.

For more information, please contact the Slovak Donors’ Forum: donorsforum@donorsforum.sk