In this section European Foundation Centre (EFC) members express their need for the European Foundation Statute and highlight some of the difficulties they have experienced when trying to operate across borders.
The Carpathian Foundation is a cross-border network of regional foundations that focuses primarily on inter-regional and transfrontier activities, and economic and community development in the bordering regions of Hungary, Poland, Romania, Slovakia and Ukraine. It encourages the development of public/private NGO partnerships, including cross-border and inter-ethnic approaches to help prevent conflicts and to promote regional development. It implements development programs and provides financial and technical assistance to projects which will result in tangible benefits to the communities on both sides of national borders and which will improve the quality of life of the people in the disadvantaged small towns and villages of the Carpathian Mountains.
When the Carpathian Foundation was established in 1995, it was decided that it should be established as a network of foundations, with a separate legal entity in each country. The mission of the organisation is cross-border in nature, and the network solution was found in order to overcome the fact that foundations are not allowed to operate in their neighbouring countries. The Carpathian Foundation International is based in Hungary, with additional national organisations established in Hungary, Poland, Romania, Slovakia and Ukraine. Naturally there were considerable costs in having to establish separate offices in all the countries, including the administrative and office costs, and finding out about the legal environment of foundations in each country. There were additional costs arising from the fact that it was not possible to establish identical organisations in each country as the requirements for setting up foundations were different in all the different countries, for instance, in terms of governance and supervisory authorities. The network structure is currently working sufficiently well that there are no big problems in the foundation’s everyday operations, but it would naturally be simpler and less costly to have been able to establish one organisation on the European level.
Although the Carpathian Foundation has managed to find a practical solution to the barriers to cross-border work that it faces, its operations would be less cumbersome and costly if there was a European-level legal form for foundations. Currently, a lot of time is spent on keeping abreast of foundation law and foundation tax law developments in all the countries where it is necessary for the foundation to have separate legal entities in order to operate. This makes operations more costly and less transparent as Carpathian Foundation International is not able itself to track the legal developments in all the languages in the countries involved and it has to rely on second-hand local information.
The lack of a suitable environment for the cross-border activities of foundations also prevents the Carpathian Foundation from undertaking further cross-border activities. The foundation would be interested in expanding to other EU Member States, but the fact that it would need to go through the costly process of setting up another legal entity after familiarising itself with the national laws and regulations in the country in question is currently preventing it from going ahead. If there was a European Foundation Statute, the foundation would be able to direct more resources to its public benefit activities and expand to other EU Member States. The Statute would also resolve a lot of inconveniences that the foundation faces on a daily basis in its operations.
www.carpathianfoundation.org
In 2007, considerations started to set up a European Climate Foundation, which would promote climate and energy policies that reduce Europe’s greenhouse gas emissions and help Europe play an even stronger international leadership role in mitigating climate change.
Because of the lack of a European legal tool, the legal and tax situation of public benefit foundations in selected European countries was reviewed and checked against a set of criteria which were considered essential for the establishment and functioning of such a foundation. In terms of strategic assessment, a European legal instrument would have been the best option.
The European Climate Foundation was established in 2008 in The Hague (head office), the Netherlands.
www.europeanclimate.org
The RISE Foundation (Rural Investment Support for Europe Foundation) is a new initiative, covering all aspects of conservation and development of the rural world, promoting private investments, the advancement of private property and cooperation between land managers and rural communities. The RISE Foundation’s primary area of operation is the current 27 EU Member States.
During the establishment of the Foundation, there were many questions and hesitations as to the best way of inserting a trans-national instrument of philanthropy into a national system of law in the absence of a European framework facilitating the attainment of the foundation’s statutory objectives. The RISE Foundation opted for a statute of a public utility foundation under Belgian law, making Belgium the base for its operations, but it included a stipulation in its statutes that it would adopt a European Statute for Foundations as soon as such an option became available. The RISE Foundation faced and/or faces a number of challenges in dealing with different legal systems, in drafting its articles of incorporation, in fund-raising, and in supporting trans-national projects. While RISE seeks a European image, it still has too much of a national one. As RISE moves into operations - it has just started financing its first project (land reclamation, Spain) - its Board continues to believe that a European Foundation statute would also facilitate supporting cross-border investments, including the financing of trans-national projects, devising cross-border financing instruments.
www.risefoundation.eu
Supporters
Unfortunately, the European Union has not yet managed to reconcile European economic integration with a European civil society. The citizens of Europe lack civil and tax law frameworks which would allow them to found associations or foundations across the EU. So far, civil society can only organise itself nationally. At the same time there are increasing numbers of issues which require effective pan-European strategies. For example, every country sees its own history from a national perspective although it is really only comprehensible in a wider context. It will be difficult to forge a common future if we do not find the means to share details of our respective pasts.
'EUSTORY – The History Network for Young Europeans' is a common platform of non-governmental organizations from 22 European nations. In June 2008, EUSTORY has been registered as an international association (AISBL) under national Belgian law in Brussels. Although EUSTORY initially wanted to avoid linking the highly symbolic common activities with a single national law, its situation as a non-registered association operating in more and more European countries became a real obstacle towards the organizational development of EUSTORY. Until June 2008. EUSTORY was not contractually capable: it could not win sponsors, or submit an application to the EU, and it did not even have its own bank account. So it seemed obvious that, in addition to the civic education operating network of competitions, EUSTORY needs solutions and know-how for fund-raising and juridical independence. That was the reason for establishing the EUSTORY AISBL in Belgium, although the more advantageous solution would have been an international foundation.
The idea for such a tool was developed already in 2006: an International Eustory Foundation, which could also act as an interim model for a European foundation. Forming a pan-European foundation is an ambitious task, which only makes sense as a joint effort. The conditions for this, set by the Körber Foundation, were to win ten partners from ten European countries. Following 18 months of advertising, it became clear how difficult this is due to the lack of a European foundation law and public benefit tax law. If the inclination to invest in a foundation’s capital is less than the interest in investing in current activities, then the missing familiarity with foreign national foundation laws becomes a virtually insurmountable obstacle. There could not have been better evidence to prove the importance of an EU-wide foundation statute. From this, the EUSTORY-Network has concluded that it should postpone having an International EUSTORY Foundation and instead concentrate initially on financing innovative projects with European partners in the framework of the EUSTORY AISBL.
www.eustory.eu