Foundations are a legal framework within which citizens, businesses, government institutions and other organizations allocate part of their assets to the implementation of a variety of beneficial and charitable purposes. Activities of foundations are voluntary and belong to the area of civil society. The institute of foundation is very old, with distinctive roots in ancient times. The foundation does not have members or owners.
When, for example, citizens, using the freedom of association, link with the purpose of undertaking environmental protection activities and fighting against drug addiction, they will choose the association model as a particular legal entity (universitas personarum).
When citizens allocate part of their assets to the common good, for example to support gifted children and encourage scientific research, they use the fundamental right of free disposal of their assets. The most appropriate organizational form for such activity is a foundation as a particular legal entity. In this case, after the establishment of a foundation the assets get their own legal life (Universitas bonorum, universitas rerum). The foundation is no longer dependent on the length of life of its founder, but rather on the effective management of assets and reputation acquired by supporting a prestigious public programs.
Foundations registered to cater public good are most active in the field of science and education, social protection, health, arts and culture and internationally.
Foundations are most developed in the United States, while recently their increasingly important role can be noticed in European countries as well. Foundations become stakeholders with the power to gather prominent citizens and thus influence important processes in societies. An increasing number of companies, as an expression of their social responsibility, establish their own foundations. Around the world cross-border activities of foundations are getting more and more noticeable, and the European Union in particular encourages their development as a catalyst for positive social change.
Main Types of Foundations
Foundations are classified in four categories according to their main source of financing, the composition of the Board and distribution of funds:
Independent,Foundations sponsored by the state, Corporate and Community foundations.
Most foundations at home and abroad are of an independent type, the majority are not financed by a company or a government agency.
Second category is a public foundation, which includes foundations created by the city or county governments or institutions, or by the state. Fixed assets of such foundations are assigned from the state budget which annually transfers a certain amount of money to them.
The third category are corporate foundations, which, unlike in Western countries, are still very poorly represented in Croatia. These foundations are established, supported and run by a company or a corporation. The objectives of a corporate foundation are associated with the operations of the company and the area it addresses.
The fourth category are community foundations. Donors are local people and local businesses who with their donations support schools, associations and can increase the level and quality of services in health care facilities or environmental protection.
In addition, we distinguish following types of foundations: (i) the operational foundations conducting their own programs, (ii) foundations that operate through the allocation of financial support via public tenders, (iii) foundations that operate for the public good, and (iv) endowments acting for private purposes.
Foundations in Croatia
A new era of philanthropy in Croatia began with democratic changes in 1990. The influence of the state in society changed considerably, and its social role was reduced. Some of the activities that had previously been the domain of the state, were taken over by other entities – civil society organizations, among which foundation take a special place.
In Croatia today there are over 200 foundations. Compared to other countries, including transition countries, it is not enough. There are several reasons for the underdeveloped foundation operation in Croatia: a restrictive law on their establishment and the lack of programs to encourage the development of foundations. In addition, the problems lie in historical circumstances, as well as in misunderstanding and lack of knowledge about foundations in the Croatian society.
Foundations in the World
Foundations in the European Union
In the European Union there are currently around 110,000 registered foundations, or 400 foundations per million inhabitants. Most of them are registered in Hungary, Denmark, Germany, Spain and Sweden, and the least in Belgium, Greece, Portugal and the Baltic EU Member States. The foundations in the EU employ over 1.4 million people, with additional 1.5 million people volunteering. The European foundation sector is worth 350 to 1,000 billion euros per year and has the consumption and investments of 83-150 billion annually.
Foundations in the United States
The number of foundations in the United States nearly tripled in the period from 1979 to 2005 and now has more than 200 foundations per million inhabitants. 89 percent of American foundations distribute financial support, 6 percent are operating foundations, 4 percent are corporate, and only 1 percent are public foundations. The foundations in the United States have 8.5 million people permanently employed, which makes up 6.3 percent of the entire working population. In these foundations nearly 65 million adults volunteer. Foundations in the United States have annually around $ 300 billion at their disposal, while their consumption (or investments) amounts to $ 29 billion annually.
How to Register a Foundation
What do you need to register a foundation?
rn Apply by submitting an application form accompanied with the Establishment Act to the Ministry of Public Administrationrn In addition to the application, you need to submit a founder's statement that your assets are assigned to the establishment of the foundationrn Add a confirmation of a domestic bank in which the money is deposited - basic propertyrn Add a written, publicly certified statement of the person or its successor for the use of Foundation's name.
The Law on Foundations, Official Gazette 36/95 (PDF)
More detailed instructions on how to set up and register a foundation you can find here .
My Fund/Foundation
Are you thinking of establishing a foundation or would you just like to start your own fund and you need professional help and support to invest in various areas (children, youth, environment, women, community development, health, culture, etc.) in order to contribute to social development and achieve social impact?
You want your name alive after you're gone through a fund carrying name that will forever support and finance activities for the common good?
You want to invest in social and economic innovation to contribute to positive social and economic changes through entrepreneurial philanthropy?
This is the right address for you!
European Foundation for Philanthropy and Society Development provides professional support to foundations, individual and corporate philanthropists.
