Basel/Geneva/Zurich, May 18, 2021
Foundations continue to be attractive, but a change is emerging in the lifespan of foundations. More than half (52.2%) of the newly established foundations were liquidated again after 10 years. A total of 13,514 charitable foundations were entered in the commercial register at the end of 2020, 139 of which were in liquidation proceedings.
Increasingly, foundations are no longer created for eternity, but are liquidated again within a few years. Among the many reasons for liquidation are the founders' interest in realizing their commitment during their lifetime in the form of a consumption foundation, as well as low interest rates, which lead to scarce returns for small foundations. Thus, although there has been tremendous growth in the number of new foundations established over the past 10 years (1990 - 2020), the trend is now downward. In 2020, a total of 284 charitable foundations were established while 210 were liquidated. The net growth of just 74 foundations is thus an expression of this dynamic development of the foundation sector.
Need for regulation in foundation law remainsAn evaluation of the consultation results on the parliamentary initiative Luginbühl by the Center for Foundation Law of the University of Zurich shows that the drastic reduction of the bill does not correspond to the tenor of the cantonal comments. Especially aspects that were considered controversial in the consultation process and were therefore deleted would have served as a basis for necessary discussions. For example, the clearer regulation of the foundation supervision complaint was welcomed in principle by 14 cantons, and the remaining cantons were only critical of the concrete formulations, but not of the concern per se. Consequently, many points will remain unresolved and the need for uniform and contemporary solutions in the foundation system will persist. This is problematic because the liberal foundation law is often interpreted by authorities and courts to the detriment of founders and foundations. Dominique Jakob describes in an author's article which possibilities would have existed and still exist.
Special Finances: Investing with impactFor a foundation, assets are not only a means to an end, but also the basis of its existence. The average investment portfolio of foundations consists largely of stocks and bonds. As Georg von Schnurbein's article points out, many foundations already base their selection on social or environmental impact or apply sustainability criteria such as ESG criteria. Impact investing can thus be used to achieve more social benefit in addition to the actual funding activity. The guest contributions by Ulrich Kriese, Edith Maryon Foundation, Maximilian Martin, Fondation Lombard Odier, and Simon Sommer, Jacobs Foundation, illustrate that Swiss foundations have recognized this potential. Compared to state entities, they can invest their assets more flexibly and riskily and thus increasingly rely on modern investment models with a charitable impact.
The foundation sector is developing responsibly and digitally into the futureAs an expression of civil society, foundations are exposed to current events as well as to social change and are thus committed to their own further development. The new principle "Social Responsibility" in the fourth edition of the Swiss Foundation Code now explicitly incorporates this requirement into its rules and regulations. In practice, foundations are redefining their philanthropic responsibility, for example by responding quickly and unbureaucratically to the consequences of the corona crisis with emergency funds. Technological innovations such as digital platforms play a role in this new understanding, as does blockchain, and are engaging not only foundations but also regulators. Sabrina Grassi, Swiss Philanthropy Foundation, Dominique Favre, BVG and Foundation Supervisory Authority of Western Switzerland As-So, as well as Thomas Müller, MME Legal, reflect on these topics and trends.
- Prof. Dr. Georg von Schnurbein, [email protected], +41 61 207 23 92;
- Prof. Dr. Dominique Jakob, [email protected], +41 44 634 1576;
- Katharina Guggi, [email protected], +41 78 818 98 61;
- Julia Jakob, [email protected], +41 44 440 00 10.
The Swiss Foundation Report will appear in its twelfth edition in 2021 and is published annually by the Center for Philanthropy Studies (CEPS) at the University of Basel, SwissFoundations, the association of Swiss Grant-making foundations, and the Center for Foundation Law at the University of Zurich. It contains current figures, facts and trends from Switzerland and abroad and is intended to contribute to a better knowledge base in the foundation sector. The report is published in German and French. Both versions are available for download free of charge at www.stiftungsreport.ch. Printed copies (CHF 25 per copy) can be ordered via [email protected].
View Foundation Report 2021