Legal Alerts / 24 Oct 2013

Legal Alert – Changes Proposed to Eligibility to Obtain Money Collection License

As a rule, money collection is in Finland allowed only with a prior money collection license granted by the police. Under the current Money Collection Act (255/2006) (the Act), only Finnish organizations and foundations dedicated exclusively to charitable purposes are eligible to obtain a money collection license.

A draft Government bill for the revision of the Act was issued on 18 October 2013 by the Ministry of the Interior. The main changes proposed in the Government bill are:

Requirement of Exclusively Charitable Purpose Abolished

For a nonprofit organization or association to be eligible to obtain a money collection license, the organization or association would no longer have to be engaged in charitable activities only. The proposed change would enable nonprofits with commercial or non-charitable activities to obtain a money collection license for the financing of their charitable activities. Whether or not the purpose of the organization applying for a money collection license is exclusively and solely charitable would therefore no longer have to be assessed by the license authority. However, to ensure that the funds are not used to further private interests, it is proposed that the funds collected must be exclusively used for a charitable purpose only.

Despite abolishing the requirement of an exclusively charitable purpose, a charitable purpose of the organization would still be a precondition for obtaining a money collection license. Business organizations run for profit would still be ineligible to obtain a money collection license despite engaging in charitable activities as well.

The draft Government bill does not propose changes to money collection being subject to license nor take a stance on the much debated issue of crowdfunding.

Universities and Churches Eligible to Obtain License

Churches and universities are not eligible to directly apply for a money collection license under the current Act. The amendment proposal would explicitly allow universities (as defined in Section 1 of the University Act, 558/2009) as well as the Evangelical Lutheran Church of Finland and the Orthodox Church of Finland to obtain a money collection license for the purposes of financing certain charitable purposes.

The churches would have the right to carry out money collection for the purpose of financing the churches’ charity work and the universities would have the right to carry out money collection for the purposes of supporting the universities’ educational functions as defined in Section 2 of the University Act. Such functions include advancing independent research as well as scientific and artistic education. The churches and the universities would not be allowed to use the funds collected for any other activities.

Maximum Duration of Money Collection Licenses Extended

In the draft Government bill it is proposed that the maximum duration of a money collection license is extended from two to five years. The Police may, however, cancel the money collection license if it would not be possible to use the funds collected for the charitable purposes set out in the license.

The draft is circulating for comments among stakeholders during the period of 18 October 2013 to 29 November 2013 whereupon the final Government bill is to be prepared. The Government bill is intended to be introduced to the Parliament during the parliamentary autumn term of 2013.

Additional information

Oili Kela
Johanna Rantanen

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