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)HDVLELOLW\ DQG UHDOLW\ Whats next for the European Foundation Statute?
Work on a feasibility study on the European Foundation Statute was set to begin this summer, following the European Commissions call for tender in April 2007. With a June 8th deadline for tenders, the bids are now in and the winner will have 11 months to complete the study. This is the latest step in a process that has been unfolding for the past few years, with consultations, action plans, briengs, and high-level expressions of both support and doubt.
Does this mean the Statute is one step closer to becoming reality and we should get ready to uncork our champagne bottles? Perhaps, but for the time being, its probably better to keep our heads clear and stick to sparkling mineral water. In any case, the legislative process starting from the conclusion of the study and presentation of recommendations, then moving on to a Commission decision to go ahead with the Statute, and further to the drafting of a text for review by the Council and Parliament could take at least one to two years. Manuel Medina, a Spanish member of the European Parliament since 1986 with a longstanding interest in this issue, believes a Statute is a necessary step, given the various difculties facing foundations in their European activities. However, he cautions that a feasibility study could engender a false sense of progress being made on the Statute. The Commission has too many feasibility studies, he notes.

Manuel Medina, Spanish member of the European Parliament

We have to develop European [structures], and one way of developing European [structures] is through foundations..."
-Manuel Medina, Spanish member of the European Parliament

According to Medina, a European Foundation Statute is needed because we have to develop European [structures], and one way of developing European [structures] is through foundations, which are useful instruments. A European Statute would provide a special status for foundations whose activities have a European scope, and this in turn should pave the way for creating a more favourable tax environment for such foundations and their donors. Medina feels that taxation can be a particularly problematic area for European foundations operating across borders in the EU. Administrative and scal barriers to foundations and funders cross-border work are also a prime concern for Wolf Schmidt,

a member of the Executive Board of the Krber-Stiftung, an EFC member foundation. The foundation launched the international EUSTORY network, which aims to promote dialogue on the different histories in Europe and to ensure that history is used to foster mutual understanding. The Krber-Stiftung is now in the process of establishing the International EUSTORY Foundation (IEF) in order to have a pan-European structure. When politicians say that a national framework is enough for public benet activities in Europe, they are completely wrong, says Schmidt. He would like to see the IEF set up as a European foundation under a European Foundation Statute, as well as a nondiscriminatory tax regime in the EU whereby donations to foundations throughout the Union are treated the same way as donations to national foundations. In this regard, the Commissions infringement procedures against various European Foundation Centre | www.efc.be

EFFECT | summer 2007

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THE LEGAL AND FISCAL SCENE

national governments are a welcome step. Schmidt believes that a European Foundation Statutewould be important as a political symbol for an issue like promoting dialogue on European history which requires Europe-wide activities, [and] Europe-wide fundraising and funding. As a European Foundation Statute is not yet a reality, the IEF will be registered as a Dutch entity, with an additional national-level afliate in Germany for tax reasons. The primary mechanism to enable favourable tax conditions for donors to the IEF will be the Transnational Giving Europe (TGE) network. Schmidt stresses that we need not only the feasibility study, we need the Foundation Statute. We need it urgently and at the same time we cannot wait until we get the Statute. We have to act now in Europe, that means we have to look for solutions in the time between. Using TGE is just such an interim solution. There is no guarantee that the feasibility study, soon to be undertaken, will result in the necessary political momentum for a European Statute. For Manuel Medina, the best way to create a political opening for the Statute is to tie it into the EUs current emphasis on research and technology. He points out that the Wolf Schmidt, member of the EU is seeking to increase Executive Board of the Krberfoundations involvement Stiftung in research and development at a European level. It is even trying to develop a European Institute for Technology which would seek cooperation with the private sector. So, the EU has an interest in having those foundations recognised, says Medina. The counterpart of the European Institute for Technology should be a European Statute on Foundations so that foundations can operate across frontiers. Medina advises the foundation sector not to be discouraged by negative responses by the Commission. The Commission sometimes says no and then a few months later changes its opinion. Soyou have to keep putting the foot in the door. This is perhaps a good moment You need a political push andfor that you have to have a good reason to [lobby for] a Statute on European FoundationsYou have to focus on what the Union is doing now, and research is one of the goals of the Union at this stage. With regard to the European Forum on Philanthropy and Research Funding, which has been set up by the EFC with the

support of the European Commission, Medina believes it is a good way to highlight and strengthen the role of foundations in research: Its a useful thing. Its a way of creating the appropriate environment.

When politicians say that a national IUDPHZRUN LV HQRXJK IRU SXEOLF EHQHW activities in Europe, they are completely wrong.
-Wolf Schmidt, Krber-Stiftung

But still, the feasibility study remains an important process. The EFC will monitor the process and will seek to be closely involved with it. The purpose of the study is to provide an overview of the main regulatory differences affecting foundations in EU Member States and an inventory of the main internal market barriers, as well as an estimate of the costs created by these obstacles. The study will analyse how these obstacles can be efciently overcome, including whether the adoption of a European Foundation Statute would be an effective solution. Also, the study will assess the potential impact of a Statute on the foundation and corporate sectors, and the European economy at large. Today there are foundations that have a European mission but cannot fully carry out this mission because of a lack of a European legal form for foundations. EFC members report various barriers in their European-level activities. But it is not only a question of legal and scal barriers. A European Foundation Statute would send a positive signal and mobilise new funders to bring their resources to bear on addressing important European issues. The Commissions feasibility study is a welcome step, but the European foundation sector should be realistic and make use of various avenues to advance its goals. Nyegosh Dube, EFC For more information on the European Foundation Statute, go to: www.efc.be/european_statute

EFFECT | summer 2007

European Foundation Centre | www.efc.be