Philanthropy in Luxembourg –

2008 - 2013

Paul Wilwertz, Banque de Luxembourg

EPSG

Luxembourg, 25th April 2013

Philanthropy 04/2013 | Banque de Luxembourg

Agenda

1. Banque de Luxembourg & philanthropy

2. Philanthopy: an opportunity for private banks?

3. Learning from our experience

4. Growing your business by investing in your framework

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Philanthropy 04/2013 | Banque de Luxembourg

About Banque de Luxembourg

• Founded in 1920

• One of the most important private banks in Luxembourg

• An international clientele base of private individuals, entrepreneurs

and wealthy families who we support throughout their lives

Philanthropy is a natural extension of our core business

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Philanthropy 04/2013 | Banque de Luxembourg

Why did we go into philanthropy?

• From CSR actor to an engaged philanthropy actor

• Response to growing demand from our clients and to

increasing solicitations

• Opportunity to differentiate ourselves

• Being a pioneer and a major player

• Put Luxembourg on the European philanthropy map with

positive impact on our own activity

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Philanthropy 04/2013 | Banque de Luxembourg

Agenda

1. Banque de Luxembourg & philanthropy

2. Philanthropy: an opportunity for private banks?

3. Learning from our experience

4. Growing your business by investing in your framework

5

Philanthropy 04/2013 | Banque de Luxembourg

Stating the needs

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Philanthropy 04/2013 | Banque de Luxembourg

Condition 1: be legitimate and add value!

Philanthropy:

• Fits naturally into the range of private banking services

trust/knowledge <-> philanthropy <-> money/assets

• Comes up naturally as a topic when discussing wealth

transmission

• Requires financial expertise

estate-planning and structuring, tax, asset management, etc

• Needs access to private banking tools

SRI, venture capital, microcredit, etc

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Philanthropy 04/2013 | Banque de Luxembourg

Condition 2: be ethical!

• Same ethical approach to philanthropy as to the business of banking − Client must have a genuine philanthropic intention at the

start − Philanthropy should not be used as a way of resolving

conflicts (rightful heirs, etc) or unclear situations

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Philanthropy 04/2013 | Banque de Luxembourg

Condition 3: each to his own

Client

Client adviser Listening out for philanthropy signals

Philanthropy adviser analyses needs - coordinates – sets up contacts

Wealth engineers / lawyers vehicle structuring

Umbrella foundation /

philanthropy consultants bring the project into being

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Philanthropy 04/2013 | Banque de Luxembourg

Agenda

1. Banque de Luxembourg & philanthropy

2. Philanthropy: an opportunity for private banks?

3. Learning from our experience

4. Growing your business by investing in your framework

10

Philanthropy 04/2013 | Banque de Luxembourg

Our services

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No desire to use philanthropy as a retention tool no Banque de Luxembourg foundation

Philanthropy 04/2013 | Banque de Luxembourg

Main benefits

Qualitative

Enhance knowledge of the client –

greater recognition from the client

Discussion provides renewal and

strengthen/deepens the client –

CRM relationship

We have become a key reference in the

philanthropy arena (wide range of contacts,

projects, enquiries, etc)

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Quantitative

(all or part of) the assets allocated to

charitable purposes can be kept at the bank

New assets (from competitors, property,

real-estate, …) may come to light and be

deposited

New prospects: children, friends of clients,

and prospects

Positive impact on our asset management

activities for foundations

Philanthropy 04/2013 | Banque de Luxembourg

Agenda

1. Banque de Luxembourg & philanthropy

2. Philanthropy: an opportunity for private banks?

3. Learning from our experience

4. Growing our business by investing in our framework

13

Philanthropy 04/2013 | Banque de Luxembourg

Philanthropy in Luxembourg in 2007

• an engaged player in development aid matters

• a robust and flexible legal framework for foundations

• access to the benefits of a major financial center:

• multi-jurisdiction specialists

• innovative products and markets (microfinance funds, SRI-funds, impact

investing…)

• high level of donor protection

• a variety of structures to meet the needs of donors with

international profiles

• classic public-benefit foundation

• International corporate foundations

• Impact investing foundations

• Foundations with European focus

• Foundation with the endowment in the form of company shares

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Philanthropy 04/2013 | Banque de Luxembourg

Philanthropy in Luxembourg in 2007

Areas of progress (cf. FSG white paper)

• Awareness of the need

• Tax treatment of donations

• Support and advice

• Outdated foundation law

• Information about potential beneficiaries

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Philanthropy 04/2013 | Banque de Luxembourg

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A systemic approach

Engineering of

impact

investing vehicles

2010 EVPA

Conference

in Luxembourg

Private Banking

Investment advice

SRI, micro-finance, … Private donors

advisory

To be

developped

Symposium 2008

Seizing the opportunity

for philanthropy

in Luxembourg

Umbrella

Foundation √

Evolution legal

and fiscal

environment √

Enhancing

Awareness

Symposium 2012

Philanthropy works

Asset

management

Asset management

of foundations

Symposium 2009

Responsable

Leadership

in times of change

More than 250

repr. of

European

Foundations

EIIL initiative

Professional

Banking

Philanthropy 04/2013 | Banque de Luxembourg

+ www.philanthopie.lu

How to engage banking and financial sector

to work with non-profit sector?

Philanthropy 04/2013 | Banque de Luxembourg

• Be selective!

• Who could be interested in your project and why?

• Would could have an interest in your project and what could it be?

• Try to identify the expected counterparts (visibility involvement)

• Be on the same wavelength concening the impact and give

feedback

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Philanthropy 04/2013 | Banque de Luxembourg

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The Banque de Luxembourg case

ROI No ROI

supporting the

non-for-profit sector

systemic

approach partnerships

Ex.: Red Cross shilanthropy

symposiums Ex. ICHEC

Philanthropy 04/2013 | Banque de Luxembourg

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• Supporting non-for-profit organisations and social entreprises

in structuring, consolidating, and professionnalising their

organisation / projects

• with

• skills

• and/or donations in kind (used PC …)

• and/or mortgages and guarantees

• and/or additional and occasional donations

Supporting the non-for-profit sector

Philanthropy 04/2013 | Banque de Luxembourg

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For the employee

• awareness and valorisation of

his/hers own competences

• application in an unknown

environnement

• openness, challenge

• giving sense

For the Bank

• challenge and proof of

concept on the field of its

skills in project

management

• « learning curve » (cf.

microfinance)

• decrease of sponsorship

budget

• incentive and « give back »

WIN – WIN - WIN

For the beneficiary

• « unaffordable » input

• no support for

« capacity building »

Why skills sponsorship ?

Philanthropy 04/2013 | Banque de Luxembourg

- Starting point: A heart for Ukraine (1994- 1997)

- Other major donations: renovation of the National Blood Transfusion

Center (2001-2004)

- Other supports: Tsunami, Social « Grocer’s shop », regular committment

to the Luxembourg-City section (bal, bazar,…)

- Skills sponsorship:

- Governance & communication

- O&I : CTS’s call center

- Web : new Intranet

- HR

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Working with the Red Cross