Glossary

Non-profit corporations must prepare an annual activity report for the tax office, which is submitted with the statement of income and expenditure. It is important that this, as well as the articles of association, comply with the provisions of non-profit law. The activity report is proof that the actual management complies with the necessary requirements and that the non-profit organization keeps proper records. (Source: Deutsche Stiftung Engagement und Eherenamt, last accessed on 27th March 2025)

You'll frequently encounter this term in public funding allocation. It stands for "Allgemeine Nebenbestimmungen für Zuwendungen zur Projektförderung" (General Terms and Conditions for Grants for Project Funding). These provisions contain all the important conditions that you must observe, especially when requesting funds, managing expenses, and accounting for the money. (Source: Deutsche Stiftung für Engagement und Ehrenamt, last accessed on 25th March 2025) 

Legal document that specifies the regulations for a company's operations and defines the relationship between the shareholders. (Source: Lawyer Johann D. Riemenschneider)

The artists' social security contribution comprises two parts: the share paid by individuals insured with the Artists' Social Insurance Fund (Künstlersozialkasse/KSK) and the contribution from exploiters (businesses that utilize the services of freelance artists and publicists). This contribution is channeled into the artists' social security fund, providing self-employed artists and publicists with social protection in pension, health, and long-term care insurance. Similar to employees, these individuals are responsible for roughly half of the insurance contributions, while the Artists' Social Insurance Fund covers the remaining half. A social security contribution is required each time a user engages artistic or journalistic services. (Source: Künstlersozialkasse, last accessed on 26th March 2025)

The Artists' Social Insuramce Fund is a division of the Federal and Railway Accident Insurance Fund. By implementing the Artists' Social Insurance Act (KSVG), it ensures that self-employed artists and publicists enjoy similar protection under statutory social insurance as employees. It is not a service provider itself, but coordinates the payment of contributions for its members to a health insurance scheme of their choice and to statutory pension and long-term care insurance. Self-employed artists and publicists are entitled to the full range of statutory benefits. However, they only have to pay half of the contributions due out of their own pocket; the KSK tops up the amounts from a subsidy from the federal government (20%) and from social security contributions from companies (30%) that exploit art and journalism. The monthly contribution an artist/publicist pays to the KSK depends on the amount of their income. (Source: Künstlersozialkasse, last accessed on 26th March 2025; click here for the FAQ of the KSK for artists and publicists) 

The natural or legal person who is ultimately the recipient of the payment. (Source: Universität Potsdam - Rechtskunde online, last accessed on 25th March 2025)

The business management evaluation (BME) is an overview of all the figures of a company. It is part of the accounting and provides a quick overview of the economic situation of a company. The following insights can be gained with the help of a BME: How much revenue was generated in the past month or in the current year? How does the company compare to the previous year? What costs does the company have? (Source: Gründerplattform, last accessed on 25th March 2025) 

Current call (for the submission of project proposals or applications).

Equity that the shareholders of a corporation (GmbH or UG) must contribute to found the company. (Source: Lawyer Johann D. Riemenschneider)

The simplest form of a partnership. Union of at least two people regulated by a contract. Legal basis are the §§ 705 and following of the Bürgerliches Gesetzbuch (German Civil Code). (Source: Lawyer Johann D. Riemenschneider)

To ensure full project funding, besides the grant provider's contribution, the applicant must also make a personal investment through equity or a bank loan. (Source: field notes Berlin, last accessed on 26th March 2025)

Public directory of companies and their management. (Source: Lawyer Johann D. Riemenschneider)

Resources with an economic value that a corporation owns or controls. (Source: Lawyer Johann D. Riemenschneider)

Cooperation partners are two or more entities involved in a project who collaborate with the goal of achieving mutual benefits for all parties. Consequently, cooperation partners anticipate conduct that aligns with the collaborative effort. These expectations can be negotiated and established as rights. The term applies to both individuals and organizations. 

The cooperative is an union of persons with the purpose of promoting the economic activity or the social or cultural interests of the members by means of a joint business operation. (Source: Lawyer Johann D. Riemenschneider)

Term for a group of commercial campanies. Corporations are legal entities in which the focus is on capital and the economic purpose. (Source: Lawyer Johann D. Riemenschneider)

A corporation is generally defined as an association of persons with the purpose of working together towards a common and non-individual goal. The members of a corporation may change, but the objective pursued and declared remains the same. A corporation in the legal sense will always be a legal entity. There are basically two types of corporate bodies. On the one hand, corporations under private law, such as limited liability companies or public limited companies, and on the other hand, corporations under public law. (Source: Jura Forum Lexikon, last accessed on 26th March 2025)

In the cost and finance plan, all expenses and revenues within a project are compared. The rule is that expenses minus revenues equals zero. (Source: Kreativ Kultur Berlin - Resource Center, last accessed on 26th March 2025)

The five German Creative Europe Desks in Berlin, Bonn, Düsseldorf, Hamburg and Munich provide information on the  Creative Europe  funding program. The office in Bonn provides nationwide information on EU cultural funding, while the four other desks provide advice and information on the MEDIA sub-program (funding opportunities for the film, TV and games industries). The Creative Europe Desks act as interfaces between the European Commission and the member states or eligible countries. They inform project sponsors about the EU funding programs in their area of responsibility. The Creative Europe Desks are responsible for providing information about the Creative Europe program and its sub-programs CULTURE and MEDIA, but the Creative Europe Desks also provide information about other EU programs and actions for the benefit of the cultural and media landscape.  

A loan is the transfer of money or property for a fixed period of time. The borrower has several options for repaying the sum to the lender at the end of the period. In common parlance, the terms loan and credit are used in the same sense. In the banking industry, a loan is used to refer to the financing of relatively small purchases with shorter repayment periods. (Source: Gabler Wirtschaftslexikon, last accessed on 26th March 2025)

Crowdfunding is an alternative form of financing for the realization and funding of creative projects and ideas. The funding comes from a variety of supporters (known as supporters) who wish to promote the project. Crowdfunding occurs without the traditional financial institutions such as commercial and/or development banks. Supporters do not necessarily have a personal benefit from crowdfunding; they often support a project for ideological reasons. The crowdfunding project is supported either with a monetary sum, and occasionally, material goods are also provided for a project— the supporter may expect a return or may not. The crowdfunding project is launched and realized through a corresponding online campaign on one of the many different crowdfunding platforms. (Source: Kreativ Kultur Berlin - Resource Center, last accessed on 25th March 2025)

The cultural and creative industries represent an economic sector in which cultural and creative enterprises operate, primarily with a commercial focus. These businesses engage in the creation, production, distribution, and/or media dissemination of cultural and creative goods and services. The sector is highly diverse: The submarkets of the music industry, book market, art market, film industry, broadcasting industry, performing arts, design industry, architecture market and press market are collectively referred to as the cultural industries. Additionally, the advertising market and the software/gaming industry are classified as creative industries. Emerging economic activities may be included under the category "other".

The federal and state governments have aligned their definition with that of the German Bundestag’s Enquête Commission on "Culture in Germany." (Source: BMWK - Kultur- und Kreativwirtschaft, last accessed 26th March 2025) 

The cultural sovereignty of the federal states denotes their primary authority over legislation and administration in cultural matters. This encompasses responsibility for schools, universities, education, broadcasting, and the arts. In German federalism, this sovereignty stems from the Basic Law's allocation of powers (Article 30). It stipulates that the federal states are in charge of all areas not explicitly assigned to the federal government. The Federal Constitutional Court has ruled that cultural sovereignty constitutes the "essence of state autonomy" within the federal system. (Source: Bundesrat, last accessed on 26th March 2025)

Particularly in the case of low-budget productions in the film or performing arts sector, the performers cannot be paid a fee for the time being, so the receivables must be deferred. Nevertheless, it is recommended to record the value of the delivered performance in a deferred payment agreement (Rückstellungsvertrag) in order to receive a fee for the performance retrospectively if the production is successfully marketed. (Source: out takes, last accessed on 27th March 2025)

Eligible direct costs are costs which, like specific costs, are directly related to the implementation of the project and can therefore be directly attributed to it. (Source: priofy, last accessed on 25th March 2025) 

Voluntary benefits that are given without consideration, but generally with a certain purpose. Only tax-privileged (“non-profit”) and public-law corporations as well as political parties within the meaning of the Political Parties Act can act as recipients of donations. (Source: Council on Foundations, last accessed on 27th March 2025)

The European Education and Culture Executive Agency (EACEA) is responsible for implementing specific components of European Union (EU) funded programs in education, culture, audiovisual, sport, citizenship, and volunteering sectors. The agency's primary focus is on "Creative Europe," the largest funding program, which is divided into two sub-programs: MEDIA and CULTURE. The EACEA oversees various aspects of these programs, including developing funding guidelines, evaluating applications, selecting projects, and finalizing project agreements. Additionally, the agency manages communication with applicants and beneficiaries, handles financial administration, and monitors project progress. Operating under the supervision of the European Commission, the EACEA regularly reports on the implementation of its assigned programs. The agency is headquartered in Brussels.
More information: www.eacea.ec.europa.eu/about-eacea

In general, economic development is understood to mean economic policy measures to promote companies and economic players in a specific region with the aim of creating jobs, generating additional tax revenue and increasing the attractiveness of a region. This support can be offered in material, personnel and financial form. In Germany, the federal principle means that the federal states are the main players in the implementation of economic development measures. (Source: Gabler Wirtschaftslexikon, last accessed on 27th March 2025)

The three countries that belong to the European Free Trade Association (EFTA) and are members of the European Economic Area (EEA): Iceland, Liechtenstein and Norway. They are partially eligible to participate in EU action programs. (Source: German Federal Statistical Office, last accessed on 25th March 2025)

German subtype of a limited liability company, it is possible to set up a UG with just one euro of capital stock. (Source: Lawyer Johann D. Riemenschneider)

In addition to cash and savings, equity encompasses contributions made by the founder(s) to a company. It also includes investments made in the company, which are classified as equity as well. (Source: Existenzgründungsportal , last accessed on 25th March 2025)

The grant is calculated as a proportion or percentage of the recognized eligible expenses. However, a specified maximum amount must not be exceeded. If the grant recipient achieves savings or higher revenues than initially anticipated, a proportional amount of the grant must be repaid. (Source: Deutsche Stiftung für Engagement und Ehrenamt, last accessed on 25th March 2025)

The EU awards grants through either grant agreements or grant decisions. The specific form used depends on the individual EU action program. Grant agreements are funding contracts between the EU Commission and the lead partner or the applicant. All rights and obligations of the participating legal entities are defined in the grant agreement. The grant decision, on the other hand, is a unilateral legal act by which a grant is awarded to the recipient. Unlike grant agreements, the beneficiary does not need to sign the grant decision. (Source: European Commission, last accessed on 25th March 2025)

In general, funding from EU action programs is allocated only to measures and projects that demonstrate a European dimension, European added value, or Community relevance. These three criteria indicate that the purpose and outcomes of a project or measure should extend beyond national benefits. (Source: European Commission, last accessed on 25th March 2025)

Evaluation refers to the assessment of the success of ongoing or completed projects and measures. It analyzes the results, impacts, and efficiency of individual projects or entire funding initiatives. Evaluation can be applied to various stages within the project life cycle as well as to the project as a whole. (Source: Future Learn, last accessed on 25th March 2025)

The success of a funded project is assessed by the granting authority as part of an evaluation process. Therefore, funding recipients must provide appropriate documentation upon project completion. This so-called expenditure report consists of a project report, a financial statement, and a list of supporting documents. The financial statement outlines the actual income and expenses compared to the planned budget in the cost and financing plan. The list of supporting documents records all receipts related to payments made under the funding. These documents (such as invoices and receipts) must be retained. Funding recipients receive all relevant information regarding the expenditure report—such as deadlines and requirements—with the grant approval notice. In most cases, the report must be submitted within two to six months after the project’s completion. (Source: Deutsche Stiftung für Engagement und Ehrenamt, last accessed on 27th March 2025)

The Federal Travel Expenses Act regulates the type and scope of travel expense allowances for civil servants, federal judges, soldiers and civil servants and judges seconded to federal service. This travel allowance includes travel expenses, daily allowances and accommodation costs. For business trips abroad, certain state rates for daily allowances and accommodation costs apply, which are set out in the Ordinance on the Allowance of Travel Expenses for Foreign Business Trips (this official announcement lists the state rates, last accessed on 25th March 2025). These rates can also serve as a guide for travel expense claims for funding applications. 

Public funds such as those of the Berlin Senate are allocated and accounted for within the framework of a financial year. The financial year corresponds to the calendar year. (Source: Senate Chancellery: Section VIII: Finance, last accessed on 26th March 2025)

The grant is awarded as a lump sum. This amount is fully retained by the grant recipient, even if savings are made or additional income is generated, unless their total expenditure falls below the granted amount. (Source: field notes Berlin, last accessed on 26th March 2025) 

Time frame for the provision of financial resources.  

Grants are only approved upon written application, usually by means of written administrative acts, so-called grant notifications or by means of a public law contract. The grant notification must specify the form and deadline for the interim or final proof of use. The authorities are obliged to request and check proof of use. (Source: Deutsche Stiftung für Engagement und Ehrenamt, last accessed on 27th March 2025)

Grants under EU action programs are generally considered financial assistance as defined by the EU Financial Regulation. EU grants are contributions drawn from the EU budget that directly finance specific actions and promote the achievement of the Union's political objectives. These grants are awarded either through grant agreements or grant decisions. (Source: European Commission, last accessed on 26th March 2025)

The responsibility for the fulfillment of another party's obligations. (Source: Gabler Wirtschaftslexikon, last accessed on 25th March 2025)

The Berlin independent arts scene encompasses a diverse array of artists, ensembles, institutions, and structures working autonomously across various disciplines. This includes architecture, visual arts, dance, theater, performance, new media, and music—ranging from baroque, electronic, and jazz to classical and contemporary compositions. It also incorporates music theater, children's and youth theater, literature, as well as interdisciplinary and transdisciplinary works. This vibrant community represents the entirety of Berlin's independent cultural production. (Source: Bündnis Freie Szene Berlin, last accessed on 26th March 2025)

For longer-term projects (usually over one year or several financial years), interim proof is often required. The decision as to whether interim proof is required is specified in the grant notification/grant agreement. It roughly corresponds to the final proof of use, but only refers to the current project status. Depending on the funding provider, it may include a factual report and an interim statement. (Source: Sachsen Begriffsdefinitionen und Hinweise, last accessed on 27th March 2025)

Any entity having legal personality under the applicable law. (Source: Lawyer Johann D. Riemenschneider)

Contractual provision to reduce or exclude the types and amounts of liabilties of one party. (Source: Lawyer Johann D. Riemenschneider)

German type of a limited liability company, in which the shareholders are not liable with their private assets. Legal basis is a law called GmbHG. At least 25.000 € capital stock is required to form a German limited liability company. (Source: Lawyer Johann D. Riemenschneider)

Subversion of an open trading company where at least one partner (general partner) is personally liable and the other (limited partner) has a limited liability with the contribution specified in the articles of association. (Quelle: Rechtsanwalt Johann D. Riemenschneider)

Partner of a limited liability partnership. Its liability is limited to the amount of liability entered in the commercial register. (Source: Lawyer Johann D. Riemenschneider)

The lower fee limit isn't just a guideline for public funding; it's the baseline for compensation to ensure a minimum standard that matches the applicant's qualifications. In publicly funded projects, fees should never dip below this lower limit, though higher fees are certainly possible and encouraged. This recommendation serves as a crucial benchmark for evaluating fair compensation, benefiting both funding bodies at federal and local levels, as well as the artists and cultural workers themselves. (Source: Kreativ Kultur Berlin - Resource Center, last accessed on 26th March 2025)

Organizations that are neither governmental nor intergovernmental and operate without the aim of making a profit. Typically, these include professional associations or interest groups that engage at local, regional, national, or international levels. The term NGO is commonly used. (Source: EURES, last accessed on 27th March 2025)

Special form of the German limited liability company, which pursues charitable goals and thereby benefits from tax advantages. (Source: Lawyer Johann D. Riemenschneider)

Non-profit status refers to activities that serve to promote the common good. In Germany, the non-profit status of a corporation is defined in §52 Public-benefit purposes, The Fiscal Code of Germany. It states, "A corporation pursues charitable purposes if its activities are aimed at selflessly promoting the general public in material, spiritual, or moral terms." Corporations that pursue charitable purposes are tax-privileged and can apply for this privileged status from the relevant tax office. (Source: naas network, last accessed on 26th March 2025)

If the association is not to be entered in the register of associations, it can be founded by just two people. However, the members are personally liable if they act on behalf of the association. (Source: Lawyer Johann D. Riemenschneider)

Partnership whose porpuse is to operate a commercial business under a joint company name. (Source: Lawyer Johann D. Riemenschneider)

Own funds refer to the financial resources that an applicant contributes to a project's funding, distinct from third-party grants or external funding sources. These can include membership fees, self-generated income, or even in-kind contributions. The eligibility of monetary benefits as costs and their classification as own funds—similar to participant contributions—varies depending on the specific funding guidelines. This distinction is particularly crucial in cases where funding programs require applicants to contribute a certain percentage of own funds to the project budget. 

Union of at least two individuals (partners) who share management and profits. The partners have unlimited liabilities. (Source: Lawyer Johann D. Riemenschneider)

Personnel costs are incurred by the funding recipient for employees who are dependent on the project. Usually, only costs for salaried employees are counted as personnel costs. Remuneration is based on the activity and not on the training of the employees. The selection and classification of employees must be justified in writing by the funding recipient. When calculating personnel costs in the course of the project application, activities can be remunerated on the basis of the Berlin average rates.

You will receive your PIC once you have registered with ECAS. It is a nine-digit identification number that is required to apply for most EU funding programs. For cooperation projects, both the main applicant and the project partners need a PIC. (Source: BMBF Horizont Europa, last accessed on 27th March 2025)

In the case of project funding, the grant serves to cover expenses for individual projects that can be defined in terms of time and content. Funding ends at the end of the project. The funds must be earmarked for the project formulated in the application. (Source: field notes Berlin, last accessed on 27th March 2025)

A corporate and non-profit organisation (association) that is listed in the register of associations. At least seven people are required to found the registered association. (Source: Lawyer Johann D. Riemenschneider)

Natural or legal person, that is a member of a company by holding shares. (Source: Lawyer Johann D. Riemenschneider)

The grant amount allocated is the difference between the recognized eligible expenditure and the sum of the grant recipient's own funds and other income. A maximum grant amount is also established. If the project results in savings or generates additional income, the full amount of the grant may need to be repaid. (Source: field notes Berlin, last accessed on 26th March 2025) 

According to the European Commission's definition, small and medium-sized enterprises are those that have fewer than 250 employees and whose annual turnover does not exceed 50 million euros. Compliance with the SME criterion is an important requirement in many funding programs. (Source: IBB-Informationsblatt, last accessed on 26th March 2025)

Sponsorship involves an organization or individual receiving financial support from a sponsor. Sponsorship can take the form of material resources, services or financial support. In contrast to a donation, the sponsor usually receives a contractually agreed consideration. Essentially, sponsorship is about presenting the sponsor's brand to the public. Sponsorship is therefore part of the sponsor's public relations work. (Source: IHK Bremen, last accessed on 27th March 2025)

Corporation owned by share holders. Legal basis is a law called AktG. (Source: Lawyer Johann D. Riemenschneider)

Third-party funds refer to financial resources provided by external bodies or institutions, or obtained through other programs, to supplement an organization’s own funds for project implementation. This category also includes bank loans. It's essential to distinguish third-party funds from an organization's own resources in financial reporting. When submitting a project application, applicants must disclose all sources of third-party funding. This requirement serves two crucial purposes: firstly, it allows for verification that the project's overall financing is secure through a combination of internal and external funds; secondly, it helps prevent instances of double funding. To ensure transparency and compliance, applicants must provide documentation supporting both their own contributions and any third-party funds (payment and invoice receipts, contracts, etc.).

The sales of the following federal, state, municipal and municipal association institutions are exempt from VAT: theaters, orchestras, chamber music ensembles, choirs, museums, botanical gardens, zoological gardens, animal parks, archives, libraries and monuments of architecture and garden art. The turnover of other similar businesses is also exempt from VAT if they apply for this. You can find more information on the website of the Berlin Senate. Self-employed persons can also be exempt from VAT under the so-called small business regulation. From a tax perspective, small businesses include sole traders or freelancers or, for example, teams in the legal form of a GbR, Unternehmensgesellschaft (haftungsbeschränkt) or another legal form that are expected to generate a total turnover of no more than 25,000 euros per year. The total turnover limit always refers to a full calendar year. (Source: Gründerplattform, last accessed on 27th March 2025)