At some point you may wish to use part of your wealth for charity. With this commendable aim, the question of setting up a foundation is arising and we want to have a closer look at this in the following article.
According to SwissFoundations, there were 13'293 foundations registered in Switzerland in 2019. Foundations enjoy a high reputation and credibility in Switzerland because it is a very stable structure and designed for the long term.
The rules and regulations for foundations can initially be intimidating, which is why we want to give you a little help with this guide.
Please note that this article does not reflect legal advice.
Where to start
At the beginning, the main question is who or what you want to support. It is highly advisable to define the purpose of the foundation carefully, as this is written down in the founding deed and hardly possible to change later.
The second question is how much you want to give. In accordance with the practice of the «Swiss Foundation Supervision», the initial capital must amount to at least CHF 50'000.
The Swiss foundations have accumulated assets of over 100 billion francs. While 80% have assets of less than five million francs, some single foundations have assets of several billion francs.
From the tax perspective it often makes sense to start with a lower initial investment and regularly transfer money to the foundation e.g. every year.
How to set up your foundation
In Switzerland, both private persons and companies can set up a foundation. Which path is best for you can be decided individually and based on your existing structures.
The central document is the foundation deed, which provides information about the assets, organization and purpose of the foundation. As mentioned earlier, the purpose of the foundation must be well thought out and formulated from the outset.
Since a foundation is created to last, it is advisable to build it up very conscientiously right from the start.
You also want to think of a name for your foundation. In principle, the name of a foundation can be chosen freely, e.g. designated according to their purpose or after the founder.
When the foundation deed is written and the registration in the commercial register is done, your foundation comes to life.
The foundation council
As foundations are usually non-profit organizations (NPOs), the work of the foundation board is voluntary and mostly unsalaried. It is recommended that expenses are reimbursed at cost and additional work-intensive services are adequately compensated in individual cases.
For an average foundation, three to five members of the council are recommended.
We support you in the search for suitable members for the foundation council both within and outside our network.
How to find suitable projects
Due to the abundance of projects worth supporting, both in Switzerland and worldwide, the selection is usually not easy.
We support you with a pre-selection in the topics that interest you and already check them for their processes and carry out a due diligence.
The path to sustainable and successful philanthropy is not difficult, but there are a few key points to consider.
Carefully define the frame for the foundation from the beginning
Choose between three to five members for the foundation council
Engage an experienced lawyer who specializes in foundation law
Engage professional support for putting together the foundation board and finding the projects you want to support
Ready to start?
Once you are ready to set up your own foundation, get in contact with Schöning & Partners so we can support you in all stages.