Béatrice de DurfortDéléguée générale du Centre Français des Fondations

Corporate foundations in France

29 February 2008 – Polish Donors forum Conference

The French Foundation centre– By law an association – 140 members sharing the same « brand » :

the capacity to be called Foundation in France is protected by law – 1987 (pre-required legal validation)

– Our members = 15% of the active field

_ annual growth of the centre : > + 10%

Quick overview of foundations in FranceMain definition of Foundations : Non for profit and un-refundable gift of wealth, rights, royalties, funds or ressources

for a purpose of public interest and common good (article 18 de la loi du 23rd July 1987)

I.e. does not include Trusts…

They are, and remain, Non For Profit Organisations.

As so, they enjoy tax benefits • Ie : no tax on endowment related income; no tax on commercial income under

60.000 €/yr, etc…

and provide tax benefits to corporate and private donors• Corporate : tax credit equal to 60% of the amount given by a company to a

foundation • Private : Tax credit equal to 66% of the amount given on income tax or 75% of

the amount of the gift on solidarity tax on wealth.

Quick overview of foundations in France

One concept : six different statutes !

1. the original ( law : 23 July 1987) : the “Fondation reconnue d’utilité publique” FRUP (created by a Prime ministers’ decree), +/- 507 active foundations. It enjoys full legal capacity and provides maximum tax reductions for donors; 25 of theses foundations have the capacity to shelter other foundations acting in their field of activity.

2. Fondations abritées (FA) : sheltered foundations they benefit all the advantages of their umbrella foundations but have no legal entity of their own, +/- 800 in France but increasing sector; (created by contract with the umbrella foundation)

3. Fondation d’entreprise (FE) : Corporate foundation (163 on 01/07/2007); creation for a minimum of 5 years with minimum income of 150.000 € spared over the 5 years; capacity to extend beyond 5 yrs. Created by prefectorial decree, not intitled to receive private wills or donations, unless from corporate staff. Subsidiary companies of a group may join to co-fund a FE

Quick overview of foundations in France

Fondation de coopération scientifique (FCS) - foundations for scientific cooperation created by the law on Research issued in March 2006. Foundation dedicated to the research field to enable create programmes of excellence between laboratories, universities, private sector etc…), time limited foundations; 11.

Two latest statutes created by the law on University autonomy and responsibility, summer 2007:

Fondations Universitaires : University foundations (sheltered by a university, no legal existence of itself, very deregulatory system.. No example yet

Fondations Partenariales : Foundation in partnership benefits all the capacity of a FRUP but with less control (all funding possible including private wills and donations) as it takes its model on FE (time limited, public and private funding…); no example yet.

The only legal body allowed to found or co-found any of these 6 types of foundations are FIRMS

So they face a strategic choice according to :• Different ways to operate • Different ways to involve stakeholders and

participate in the governance• Different levels of “hands-on” /autonomy• Means and expectations of the company /

foundation’s purpose

NUMBER OF FOUNDATIONS CREATED EACH YR / STATUS OF FOUNDATION

 

2000 2001 2002 2003 2004 2005 2006 2007

FRUP 5 10 3 10 11 21 16 17

Of which : FRUP funded by firms 2 2 7 4

FCS 2 14

CORPORATE FOUNDATIONS 7 6 8 3 17 21 33 37

SHELTERED FOUNDATIONS* 20 20 19 26 21 33 37 39

Of which : sheltered foundations created by

firms 3 2 5 6 4 9 10 3

TOTAL 32 36 30 39 49 75 88 107

Total firms 10 11 14 13 23 40 47 50

Total firms in % of the whole sector 31 31 47 33 47 53 53 47

Corporate foundations GROTH FROM 2001 TO 2007 : +164% A recent sector (average groth of foundation sector +30%)

trend of laws and tax incentives issued since 2003 has strong impact on the sector

the corporate field investigates all the legal frameworks they may use to set up a foundation.

CORPORATE INVESTMENT IN FOUNDATIONS does not limit itself to the “CORPORATE FOUNDATIONS”

Elements of typology

I. Foundations in close relation with their corporate funders1. The name of the funder shows in the name of the foundation (internal

and external communication purpose) 2. Teams and financial resources are very dependant on the firm3. Mainly they act as Donors, but more and more they add strong

implication or collaboration of their teams to the designation of the beneficiaries and helping them set up their missions (identifying programmes, coaching, sharing – expertise, pro-bono work, etc…)

II. Foundations that show more distance and autonomy towards their corporate funders1. Multiple funders; causing less stress and implication of each of them2. General field of research on subjects of general interest to a branch (i.e:

Institut de la gestion déléguée, fondation de recherche pour l’aéronautique et de l’espace)

3. Operating foundations, running hospitals, schools… (long term commitment, i.e. Fondation Caisses d’Epargne pour la solidarité)

368 corporate funded foundations

(out of 1448 Foundations in France)

177 Corporate Foundations

87Sheltered

foundations

69FRUP

21FCS(Scientifc cooperation foundation)

Figures at November 2007

I. Foundations in close relation with their corporate funders Resources

85%

15%

Corporate funding

other

1 1 1

12

34

6 6 6

3

5

76

10

4

17

19

21

34

12

5

23

21 1

3

6

32

3

1

3

5

0

2

4

6

8

10

12

14

16

18

20

79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05

FE FA

I. Foundations in close relation with their corporate funders A growing sector

Law 1990 Laws 2002-3

Fondations created in

1980 TO 1991

76.5

1991 TO 1996

1996- 2001

2001 -2004

2004 TO 2007

ALL TOGETHER

France 80 53 47.5 58

Other than Paris region

23.5 20 36 47 52.5 42

 

I. Foundations in close relation with their corporate funders All geographic regions concerned

64

engagement annuel des 20 nouvelles fondations :

390 K€

budget moyen de l’ensemble des fondations:

608 K€

2004

2005

engagement annuel des 24 nouvelles fondations :

338 K€

budget moyen de l’ensemble des fondations :

770 K€

I. Corporate foundations tend to start small, and grow as confidence comes…

Breakdown of foundations created by firms, according to annual spending in 2004

<50 K€ 25%

de 50 à moins de 100 K€ 9%

de 100 à moins de 200 K€ 14%

de 200 à moins de 500 K€ 16%

de 500 à moins de 1000 K€ 14%

de 1000 à moins de 5000 K€ 20%

> 5000 K€ 1%

Total 100%

I. 2004: major disparities in foundations capacity and size

Total spending 116 million €,

out of which 106 millions grants, awards, scholarships.

8%

15%

76%

Donors foundations

Operating and donor

Operating foundation

I. Foundations in close relation with their corporate funders SPENDINGD (FE& FA)

15%

32%

29%

24% Arts and culture

Health and medical research

Social services

others

23 % of fondations

16 % of fondations21 % of fondations

40 % of fondations

I. Breakdown of corporate Foundations spending

40 % « target » children and youth programmes

66% act at National level

II. corporate foundations « enlarged philanthropy » A SECOND WIND

Nombre de créations de fondations de mécénat d'entreprise "élargi"

15

21

63

95

27

12

0

5

10

15

20

25

30

jusqu'à1900

1901 à1945

1946 à1960

1961 à1980

1981 à1987

1988 à2000

2001 à2005

FA élargi FRUP élargi

NUMBER OF ENLARGED PHILANTHROPY

CORPORATE FOUNDATIONS CREATED

II. Specificity of these corporate foundations « Enlarged philanthropy »

(2004 figures)

• Size : Average annual spending in 2004 > 5.000.000 €

• Employment : 30 % employ more than 5 people

• Statute : 85 % are RUP reconnues d’utilité publique (emerging trend since

2006 FCS, and University foundations)

• Generally co-funded by one or several firms (74)32 % individual funder44 % associations or other

NGOs21 % State or collectivity

subventions pub.31%

recettes32%

dons26%

autres11%

Greater diversity in Income resources

II. Specificity of these foundations

Others 11%

Grants and Fundraising

26%

Generated Income and fees 32%

Public funding31%

II.Break down of these corporate foundations

« enlarged philanthropy » Spending

10%

25%

41%

24%

Social services

othersSciences

Total spending : 277 millions € in 2004 But 7 foundations exclusively created by a single corporate founderHave spent 84 millions € in 2004

30 % des fondations

16% des fondations13 % fondations

41 % fondations

Health and medical research

Les statistiques présentées ici ont été élaborées à partir du corpus d’information collecté et traité par l’Observatoire de la Fondation de France. Ils concernent 1011 fondations actives à ce jour. (collecte info 2006 -2007)

Nous exprimons toute notre gratitude à Odile de Laurens et Viviane Tchernonog, chargée de recherche au CNRS.

MERCI