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Small Foundations dominate the sector. Legal frameworks require reform.
Berlin, 19.04.2016 – The close on 19 000 foundations in Germany could be making even better use of their independence from the state and the free market, especially to add momentum to social reforms in areas including education, research and culture. This is especially true of the large grantmaking foundations who make up 10 per cent of the sector and account for 90% of its total expenditure with their total annual budget of 2,8 billion Euro. A new study by the Hertie School of Governance and the Centre for Social Investment at Heidelberg University led by Prof. Dr. Helmut Anheier has concluded that these foundations often lack a sustainable strategy to drive successful reform or promote social innovation. “Especially since their budgets are so small in comparison to public funding, foundations need a thought-through strategy, staying power and a strong desire for transparency. Those who wish to see pilot projects in education, for example, being promoted by public funding after their respective trial phases are over, need to show their cards right from the beginning,” said project leader Helmut Anheier.
The study, in which 1000 representative foundations were asked about their goals, identity and the results of their work, makes the split in the sector clear. With budgets of less than 100 000 Euros, over 70 per cent of the foundations are small, locally active and relatively young – most were founded after 1990. Big, financially strong foundations are in the minority. “The heart of German philanthropic sector is beating at a moderate pace. We see a distinct culture of involvement but also an overestimation of personal resources,” continued Anheier. Small foundations in particular, which occupy clearly defined local and regional niches, were highlighted.
Certainly, small can be too small. The researchers recommend that those who wish to start foundations but who have a minimal asset base test out alternative formats including endowment foundations[AG1] or trust models[AG2] . In light of the major need for people to get involved in philanthropic ventures, policymakers are, moreover, called upon to improve the legal frameworks relevant to this sector: amendments to statutes during the founder’s lifetime and a consolidation of foundations as well as the transformation into an endowment foundation must be made possible, while start capital regulations need to be reconsidered and thought through.
Additionally, foundations should not only consider their philanthropic activities as part of the foundation’s work, but also their investments: with so-called “mission investing”, capital is invested in such a way that the foundation’s goals and purpose are achieved, for example by investing in green energy or companies with high social standards.
1000 foundations were selected out of almost 19 000, which were recently compiled for the study “Rolle und Positionierung deutscher Stiftungen”. In partnership with TNS Infratest Politikforschung, the researchers questioned the organisations on their self-perceived role and modus operandi, their relationship to the state, the economy and the public, as well as their strengths and weaknesses. The sample foundations were specifically chosen in order to reflect a broad spectrum of represent Germany’s Länder, various founding dates as well as different goals. There is a special emphasis on education and childcare, science and research, as well as art and culture. The project was funded by the Fritz Thyssen Foundation, the Hertie Foundation, Stiftung Mercator, Robert Bosch Stiftung, the Volkswagen Foundation and the Stifterverband für die Deutsche Wissenschaft.
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A summarised report with the results of the study can be downloaded here (in DE): http://bit.ly/Zusammenfassung-Stiftungen
The study will be presented today (19.04.2016) at the Hertie School at 4 p.m., after which experts will discuss its findings. For more information about this event, which forms part of the seventh Berliner Stiftungswoche (Berlin Foundations Week), click here: http://bit.ly/Stiftungsstudie16. Register for the event by sending an email to events@hertie-school.org.
The Hertie School of Governance is a private university based in Berlin, accredited by the State and the German Science Council. Interdisciplinary and practice-oriented teaching, first-class research and an extensive international network set the Hertie School apart and position it as an ambassador of good governance, characterised by public debate and engagement. The School was founded at the end of 2003 as a project of the Hertie Foundation, which remains its major partner. www.hertie-school.org
Press Contact: Regine Kreitz, Head of Communications, Tel.: 030 / 259 219 113, Fax: 030 / 259 219 444, Email: pressoffice(at)hertie-school.org
https://www.hertie-school.org/stiftungen_de/ - Study website (in DE)
Cover of the study's summary
Source: Hertie School of Governance
Hertie School President Helmut Anheier
Source: Hertie School of Governance
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Cover of the study's summary
Source: Hertie School of Governance
Hertie School President Helmut Anheier
Source: Hertie School of Governance
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