Strengthening European Philanthropy

Foundations in Foundations in Contemporary Europe Contemporary Europe

12 September 2008 ׀ Warsaw

Gerry SaloleGerry Salole

I ain't lookin' to simplify you, classify youAnalyze you, categorize you

define you or confine you Or select you or dissect you

chain you down or bring you down Race or chase you, track or trace you I ain't lookin' for you to feel like me

See like me or be like me All I really want to do

Is, baby, be friends with you.

• Paraphrased from Bob Dylan “All I Really Want To Do” Paraphrased from Bob Dylan “All I Really Want To Do” 19641964

The Spectrum of Foundations in EuropeThe Spectrum of Foundations in Europe• There are 95,000 ‘public benefit foundations’ in the EU, (on average there are 27 foundations per 100,000 inhabitants)

• This corresponds to an increase of 50% of public benefit foundations in 4 years (2001-2005)

6574

3259

638 449 235 87 10

852395 105 166 64 75 28

3968

2697

0

1000

2000

3000

4000

5000

6000

7000

(1994-2004)Germany*

(1995-2005)Spain

(1990-2001)Sw eden

(1995-2005)Italy

(1996-2004)Estonia

(1995-2005)France

(1996-2006)Slovakia

(2000-2007)Belgium**

(2000-2007)Luxembourg**

0%

20%

40%

60%

80%

100%

Foundations created in the last period surveyed

Foundations created in the last year of the decade

Percentage of foundations created in the last period surveyed

A Sector Characterised by its DiversityA Sector Characterised by its Diversity

• EU = 27 countries > over 50 legal systems > over 60 languages

• No lingua franca: the definition and use of the term ‘foundation’ differs from one country to another

Foundation (en) = Alapitvanyok (hu) An Foras (ga) Fondation (fr)

Fondazione (it) Fondazzjoni (mt) Fond (en) Fondas (lt) Fonds (lv)

Fonden (da) Fundacao (pt) Fundacion (es) Fundacija (sl) Fundacja

(pl)

FundaŃie (ro) ίδρυμα (el) ФОНДАЦИЯ (bg) Nadacia (sl) saatio (fi)

Stichting (nl) Stiftung (de) Stiftelse (sv) Trust (en) Vakıf (tk)

Zaklada (cn)

EFC Definition of a Foundation EFC Definition of a Foundation

“Public-benefit foundations are asset-based and purpose-driven. They have no

members or shareholders and are separately constituted non-profit bodies. Foundations focus on areas ranging from the environment, social services, health and education, to science, research, arts

and culture. They have an established and reliable income source, which allows them to plan and carry out work over a longer

term than many other institutions such as governments and companies.”

EFC Typologies EFC Typologies The EFC identified 18 of the most common foundation types in Europe, initially grouped into 4 generic categories:

1 Independent foundations

2 Corporate foundations

3 Governmentally-linked foundations

4 Community foundations and other fund-raising foundations

Based on 3 key criteria:

1 Source of foundation’s financial resources?

2 Who controls decision making?

3 How is the distribution of financial resources approached?

As the categories are not exclusive, EFC members often have trouble choosing just 1 ‘label’ for their organisation. With each new member joining, we could virtually create a classification for every variant that is identified.

Crooks’ Models of Civil Society in EuropeCrooks’ Models of Civil Society in Europe

Anglo-SaxonAncient roots and unbroken history, very well established, non-political-party, extensive and free co-operation with public authorities, etc.

PillarisedTendency to be marginalized in favour of state and church, co-operation with public authorities in practice necessary.

‘Southern’Tendency towards co-operatives and mutual’s (post Risorgimento), politicized, some clientism.

‘Statist’Associations seen by the state as contributing to ‘solidarity’ but otherwise still strong traces of historical distrust – emphasis on ‘social’ rather than ‘civil’ dialogue and consultation

Tayart’s Interpretation (2005)Tayart’s Interpretation (2005)

Model Characteristics

Scandinavian State plays strong role, dominant welfare state but strong volunteering system. Civil Society successfully “pulls” Government into gaps. Good complimentarity.

Rhine (includes Belgium, Germany & the Netherlands)

Strong civil society organizations are institution like and often receive contracts from state. In sectors such as health and education function much like subcontractors. Paradoxically independent from state but almost 100% publicly financed. Historically Organized in ideological pillars, such as socialist, liberal or Christian Democrat. Because of the dependency on government, fiscal and legal climate does not strongly favour donations and gifts.

Latin/Mediterranean

Civil Society face challenge in being accepted as independent and autonomous. There is a persistence in trying to control organizations and associations politically, either though representations on boards or by legal measures.

Anglo Saxon Civil Society organizations are seen as counterweight to government & state (check and balance role?). Foster pluralism and “cast themselves” in the role of critic of state and advocates of change

Countries in Transition

Still in transition. The overall picture suggests convergence with rest of EU in terms of competitiveness, trade specialization but civil society is still discovering the space that they can occupy.

MacDonald and Tayart (2008) stress MacDonald and Tayart (2008) stress FluidityFluidity

• Tayart’s models (2005) can be used as a basis to understand civil society models, but they are evolving rapidly

• The classifications may be less distinct and given ‘types’ and are instead ways of understanding the various legislative backdrops

• Too often theorists cannot see past the Anglo-Saxon model

• European foundations highlighted in their book are reaching beyond these models in new and interesting ways, reflecting diverse responses to changing circumstances and context

DemeDemeš and Forbrigš and Forbrig (2007) Imply (2007) Imply ‘Watchdog’ Role‘Watchdog’ Role

“[following the ‘colour’ revolutions] citizens discovered the power they can

have, and politicians were forced to accept, that citizens have the right to, and

are capable of, shaping the democratic process through their initiative and

through independent civic organisations…it has become a natural ambition of civil

society and the free media to closely monitor the performance of political

leaders and public officials.”

Trends in EuropeTrends in Europe

• Many European governments are increasingly recognising the valuable role that foundations can play, and adjusting tax incentives and related civil law accordingly, including:

Finland, Germany, Netherlands, UK

• Other countries plan on undertaking similar revisions in the near future:

Italy, Poland

• While there have been some encouraging trends on tax incentives for private giving and cross-border giving in many European countries, some countries are also becoming more cautious about foundations and are asking for more oversight

InfrastructureInfrastructure

People

Governments

NGOs

Community Foundations

Foundations

The civil society Burger

Making the Case for a European Foundation Making the Case for a European Foundation StatuteStatute

A European Foundation Statute would cover foundations’ A European Foundation Statute would cover foundations’ governance, transparency and accountability in cross-border governance, transparency and accountability in cross-border

work and financing. It would be a new, optional, public-benefit work and financing. It would be a new, optional, public-benefit legal tool, governed by European law, and complementing legal tool, governed by European law, and complementing

national laws. national laws.

Why is it needed?Why is it needed?

• Foundation work is getting more international as a result of the internationalisation of the complex problems foundations contribute to address.

• Foundations struggle with different national and even regional laws. New European initiatives are delayed by a lack of appropriate legal tools.

• Funders need freedom to work throughout Europe, across borders, with minimal red tape.

Other Benefits? Other Benefits?

• Develop common definition and clarify the terms and conditions of foundations.

Strengthening European Philanthropy

Questions, Comments ?Questions, Comments ?

Thank youThank you

Contact us:Contact us:

European Foundation Centre, AISBL | 51, rue de la Concorde | 1050 Brussels, Belgium

t +32.2.512.8938 | f +32.2512.3265 | efc@efc.be | www.efc.be