Solidarity at the heart of the debate

What is a foundation?

Foundations are non-beneficial organisations that generally aim to help less fortunate people. They usually get the money for their projects by collecting donations from private people, but also sometimes from the government of their country. In the case of foundations owned by millionaires, they usually finance the foundation themselves and they then get tax reliefs in return. Some projects of the foundations we looked at include building schools and hospitals in poor countries.

Accusations

There have been various accusations made against foundations, ranging from financial mismanagement and lack of transparency to conflicts of interest and political bias. Some have accused foundations of not effectively using their resources to address social and humanitarian issues, while others have claimed that foundations have too much influence over the decisions and policies of governments and non-profit organizations. There have also been accusations of foundations having close ties with corporations, leading to concerns about the alignment of their objectives and priorities.
The goal of this project is also to find out if these are just baseless accusations, or if there is actually some truth behind them. The foundations we looked at aren’t particularly famous or criticised but we believe that they can still give a meaningful insight into how a foundation works.

Financial

Foundations can get money for their projects through a variety of ways. Some common methods include:

• Donations: Foundations often rely on donations from individuals, corporations, and other organizations to fund their projects. These donations can be made on a one-time or recurring basis.
• Grants: Foundations may also apply for grants from government agencies, private foundations, or other organisations. These grants are usually awarded to organisations that align with the mission and funding priorities of the grant maker.
• Fundraisers: Foundations may also organise fundraisers, such as charity events, auctions, or galas, to raise money for their projects.

The “Fondation Été” gets their money exclusively from a special bank account that the now deceased founder, Pierre Brahms, set up for the foundation. They are very careful that all of the money is spent on humane purposes. The “Fondation Dr. Elvire Engel” gets most of their money (about 80%) from the government and the rest comes from donations by private individuals.

Legislation

Foundations in Luxembourg are governed by the law of 23^rd December 2016 on foundations, which came into force on 1^st January 2017. This law sets out the legal framework for the creation, operation, and dissolution of foundations in Luxembourg.

According to the law, foundations must have a specific, lawful purpose, which must be stated in the foundation’s articles of association. The foundation must also have a minimum of one founder, one president and one treasurer. The founder can be a physical or legal person, including the president and treasurer.

Additionally, foundations must have a minimum endowment of € 30,000, which must be paid in full at the time of the foundation’s creation. The foundation’s assets must be managed in accordance with the laws of Luxembourg and any income generated must be used to achieve the foundation’s objectives.

Foundations are also subject to reporting and transparency requirements. They must maintain a register of their members, keep proper accounts and records, and file annual financial statements with the Luxembourg trade and companies register. They also must submit their annual accounts to the Luxembourg tax authorities.

Furthermore, foundations are required to have a specific management body, which is responsible for the administration and management of the foundation’s assets. This body must act in the best interests of the foundation and in accordance with its articles of association and the law.

In conclusion, foundations in Luxembourg are subject to various laws and regulations that ensure that they are properly managed, transparent, and accountable, and that their assets are used for the specific lawful purpose for which they were created. However, this legal basis for foundations is not guaranteed everywhere and foundations from other countries are therefore more often subject to criticism.

Summary

We chose to introduce the two following foundations:

Conclusion

Both foundations aim to improve lives and empower people in need, sharing the goodwill left behind by their founders. However, the existence of one foundation does not eliminate the need of the other, quite the contrary. Both these foundations complement each other beautifully. Whilst the “Fondation  Été” is helping private people and communities here in Luxembourg with more personal or financial problems, the “Fondation Dr. Elvire Engel” is trying to install infrastructure in underdeveloped countries, which is often taken for granted in Luxembourg.

At the end of the day, both are targeting systemic problems in society that need to be resolved and have adapted one of several possible ways to achieve their goals as effectively as possible. For further information on the operations of each foundation you can click here: