The development of foundations depends on enabling legislation from their national governments, and on tax provisions, which allows donors to create endowments. Government policies can range from outright disregard to concise regulations ensuring that foundation rights and responsibilities are not abused.

Co-operation between foundations and public authorities (local, regional, national and supranational authorities and institutions) has a long tradition in history both as alternate donors and beneficiaries. Some of the old medieval foundations were set up or administered by what we would in today’s terms qualify as public authorities or executive bodies.

In recent years, foundations have received increased attention from policy-makers and have taken up a central role in discussions on the future of economic, social and other policies. Public authorities have strengthened their links with the foundation sector and search for co-operation in many different ways. At a time when governments are reviewing cooperation with the non-profit sector as well as their spending for new socio-economic programmes, research and community development, one may look at how public needs can be addressed through initiatives launched and funded with and within the sector. 

Cooperation between foundations and public authorities takes various forms ranging from institutional links to policy-work. It can be developed as

• Implementation and regranting schemes

• Collaborative funding and project-based partnerships

• Follow-up of successful foundation initiatives: whereas the foundation can support innovation, the public authorities can mainstream.

Partnering and co-funding with foundations can represent an attractive option for five principal reasons:

• They can help to build partnerships across sectors by bringing together different actors of our society, from multi-national agencies, central governments, local authorities, to the private and charity sectors to jointly address and devise effective responses to social, environmental, educational, scientific and economic challenges. Their financial independence and flexibility allow foundations to play a catalyst role and pool resources, expertise, and know-how to tackle critical needs. Partnership is at the core of the work of many foundations, including those foundations working at a local level.
• They are able to experiment and take risks. Foundations have the ability to work in a long-term perspective unlike elected governments, for-profit companies and fundraising organisations faced by shorter-term considerations and needs.  In doing so they are in a position to provide flexible social capital for citizens, operating their own programme and or supporting other non-profit entities to develop useful models for long-term public action.
• They can complement governments or help to leverage public funding.
• They can add resources where public authorities are unable to operate due to legal restrictions or other constraints.
• They give a "human dimension" to public actions. Foundations place the individual at the centre of their work and concerns. Their action revolves around increasing citizen participation by strengthening civil society. In other words they focus on the rule of law and civil society, socio economic development and integration of citizens, respect for minority rights, freedom of the media, tolerance and pluralism, and can reach parts of society that government cannot reach.

In 2001 the Centre for Civil Society – London Schools of Economics undertook an analysis of the current and future role of foundations in Europe. This analysis to be released in 2005 includes a mapping and appraisal of foundation visions, policies and strategies in their respective environments, and how they perceive their current and future relationships with public authorities.

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