The Free Gymnastics Association Munich-Schwabing has had an account with the Stadtsparkasse Munich for 45 years. “It’s actually a good, long-term business relationship,” says the association’s treasurer, Rene Dorfeld. If it had been up to him, it could have stayed that way. But now the relationship has gotten a crack. This is due to the negative interest rates, which the fourth largest savings bank in Germany not only demands from this non-profit organization. Dorfeld, a banker himself by profession and the money manager at FTM Schwabing with around 700 members in his free time, has absolutely no understanding for this. “That is the wrong signal for the many people here who volunteer in the club and keep popular sport going, whether volleyball, badminton, gymnastics or football.”
The trouble started when the Stadtsparkasse reduced the tax exemption for the so-called custody fee for business accounts like the FTM Schwabing from 250,000 euros to 100,000 euros at the beginning of the year. 250,000 were not a problem for the club, this limit was always undercut. The 100,000 euros, however, if the annual membership fees landed on the account in one fell swoop.
Dorfeld first tried to talk to the manager of the club account at the city savings bank. He couldn’t help because of the directives from above. So Dorfeld and the association chairman wrote a letter to the head of the Stadtsparkasse, Ralf Fleischer. In it he pointed out that savings banks are by definition non-profit credit institutions are, “who do not originally work according to the economic principle of making profit, but primarily have legally defined tasks (public mandate)”. But that’s not the only reason why the treasurer criticizes the negative interest rates for non-profit organizations. Dorfeld also cannot understand why the Stadtsparkasse first collects custody fees from Munich clubs, then distributes millions in profits to the city of Munich every year, which in turn distributes money to the clubs through sports funding.
“We are not to be equated with wealthy private individuals,” writes the association’s board of directors
In 2020 the Stadtsparkasse achieved an annual result of 35 million euros. The FTM Schwabing board of directors asks in its letter: “Are the custody fees of non-profit associations crucial for one of the largest savings banks?” For the clubs, however, every euro is important. “Every financial burden on the association leads to higher membership fees or a reduced range of activities of the association,” argues the board in the letter. The answer from the “Quality Management” employee was succinct: The Stadtsparkasse decreed the basic price for account management for non-profit associations, and it was important to them to support non-profit associations. The custody fee has to be calculated further.
The Munich financial institution is no exception. Total calculate according to information from the consumer portal biallo.de 525 banks and savings banks in Germany already have negative interest rates on private assets. In corporate banking there are 553 institutes. In the current year, almost 270 banks and savings banks have introduced a custody fee for credit balances on the overnight or giro account, with the tax exemptions having recently decreased significantly. A survey by biallo.de on behalf of Süddeutsche Zeitung With around a dozen large savings banks and cooperative banks in Germany, the result was that almost all of them also collect negative interest above the respective tax exemptions from non-profit associations.
The Stadtsparkasse informed the SZ: Even if it is “not the primary goal of the savings banks to maximize profits, we have to act sensibly in a commercial sense”. When it comes to the custody fee, all customers and thus clubs must be treated equally. “But we are very well aware of the social significance of clubs, regardless of whether they are sport, culture or for charitable purposes. Therefore, it is very important for us as savings banks with the aforementioned public mandate to support these clubs through donations and sponsorship to support.” Last year in Bavaria alone, savings banks provided almost 40 million euros for charitable purposes and institutions.
Treasurer Dorfeld took a different path anyway. He could no longer prevent his association from having to pay around 50 euros in negative interest to the Stadtsparkasse – in addition to the annual fees of 200 to 300 euros for certain work items such as direct debits, transfers or standing orders. But in the meantime, like other Munich clubs, the FTM Schwabing has distributed the club credit to several accounts at various financial institutions. This means that you are now below the respective tax exemptions and at least no longer have to pay negative interest. Dorfeld is still angry. He demands that non-profit financial institutions such as savings banks should not charge any negative interest at all from non-profit organizations, and says: “We are not to be equated with wealthy private individuals and profit-oriented companies.”