Foundations: Brussels’ most effective agents of change?

“European foundations must become active agents”. The request that Helmut K. Anheier, director of the Centre for Social Investments of the University of Heidelberg and founder of the Centre for Civil Society of London School of Economics, addresses to more than 110 thousand public benefit foundations operating inside the European Union is clear. “Paying out funds is not enough anymore, foundations must transform into lobbyists of social causes which they support already financially”.

 

What additional weapon would foundations have with regard to NGOs and associations which already make pressure on Brussels?

Helmut Anheier: Economic independence. And freedom to make pressure on local governments and European institutions which derive from it. Nowadays inside the European Union foundations have assets of about one thousand billion euros and pay out more than 150 billion euros per year.

 

Is there a social issue, in particular, on which it is urgent that foundations make their voice heardin Brussels?

A: It is the one that concerns more directly their future: the creation of European bylaws of foundations which eliminates the paradox according to which, nowadays, if they wish to operate at a transnational level they do it with often higher costs than profit enterprises. The European Commission is very receptive on this subject: in February it published a feasibility study on European bylaws of foundations elaborated by our Centre for Social Investments.  It has also launched a public consultation to determine the level of need of such a bylaws that is in the course of being made.

 

What impact would European bylaws of foundations have on European philanthropy?

A: Foundations could, first of all, set themselves up as “European foundation” in the country of residence of their founder or in any other Member State and, at the same time, be operational and recognized in all 27 Member States.

This would make transnational operations easier, reducing costs, starting from costs of donations, and stimulating a stronger cooperation among foundations of different countries.

 

How much could the costs of transnational operations for a foundation be reduced?

A: Todaycosts of “legal barriers” on transnational operations are estimated around 90 and 101 million euros per year, and costs are difficultly assessable as office relocation, psychological costs and costs of duplication of bureaucratic practices in the various countries would be added to costs of “legal barriers”.

 

 

How and in which country would  a “European foundation” be taxed?

A: It should not pay additional taxes. It would be taxed according to the national laws of the country in which it operates, which would allow some tax discriminations on foundations set up in a particular Member State which also operate in other European countries to be eliminated.

 

Could the European bylaws also have advantages for private donors and enterprises?

A: Philanthropists would be facilitated, and therefore stimulated to donate to non profit entities from different countries. Let’s think for example of today’s labour mobility and of mobility of people who retire. Enterprises would eventually have a legal tool to develop a policy of social investments on a European scale.

 

Do you think that this new legal status can also have an impact on European culture of donation?

A: European bylaws would provide a legal community reference, it would favour transparency and comprehension of governance policies and would incentivize the private sector to work with foundations.