Foundations are by nature individualistic. How do you convince a big foundation in, say, France or Italy or the UK that they should be interested in a European approach? And then persuade them to put their money where their mouth is? This is one of the challenges facing Luc Tayart de Borms, new chair of the European Foundation Centre.
The EFC has an ambitious remit, what Tayart describes as a ‘crazy ambition’: to encompass both the research functions carried out by the US Foundation Center and the membership-oriented activities and advocacy undertaken by the US Council on Foundations – undoubtedly ‘a tough agenda for a small organization which has not got a lot of resources at the moment’.
The cynical argument
Tayart’s first argument – what he calls ‘the cynical one’ – relates to the institutional context, legal and fiscal issues. In the next five or ten years, he firmly believes, Europe will see important harmonizations around tax issues, TVA (VAT) and foundations’ legal status. At the moment foundations face what could be called ‘unfair competition’ arising from differences between the tax systems in different countries. ‘For today’s entrepreneurial donor, his world is Europe, the world, not necessarily Belgium or Portugal or wherever. When he wants to create a foundation he doesn’t necessarily choose the country he has lived in. He will find the best position in Europe in terms of tax advantages, TVA and suchlike, and establish his foundation there.’
When the European Parliament or Commission do start to make moves towards harmonization, foundations will need to be able to respond at a European level. A proposal may be obviously unfavourable to the sector, but sometimes measures are taken which have an unanticipated effect and without the sector noticing it, ‘and that can be worse’.
‘So the EFC has the responsibility to be proactive in this area, to find out what we need in the future. Foundations may say it’s not my problem, but it can become your problem. The trouble is that this set of arguments is not very positive, it’s more defensive, self-protective. It’s threatening, saying, "Look guys, if we don’t do anything …"’
Interestingly, Paul Boateng, British minister of state responsible for the voluntary sector, made almost exactly the same point to an audience of foundation CEOs and other senior staff in Hanover in June (see p5), stressing how important it is for the European third sector to have a voice in Brussels for just this sort of defensive reason.
He points out that the US Council on Foundations became much more successful in the sixties when foundations faced a big threat in the form of unfavourable non-profit legislation. ‘I should provoke the European Parliament to do something dramatic that gets everybody awake. That could be a strategy!’
The peer group argument
Tayart’s second set of arguments relates to having a peer group to work alongside. If you work in a country where the foundation world is not that developed – Belgium or France, for example – you don’t have much of a peer group. On top of this, you don’t face the traditional market pressures, and the press is mostly nice to you. Being active within a European context alongside your peers keeps you awake, brings creativity and inspiration. Sometimes a foundation will start up something that others have already tried out; if you have a wider network, you can learn from each other’s mistakes.
The European argument
But the most positive set of arguments relates to a genuine belief in Europe. ‘Of course I am a Belgian, so Europe is naturally there. We believe strongly in European values and in developing a European federal system. For us it’s a positive thing.’ This is largely a matter of scale. ‘Confronted with other big economic forces like the United States, there is no choice, we have to go together.’ Less seriously, ‘we are confronted with quite a lot of Europeans coming to our place, so we know a little bit what Europe is!’
But positive European values are not just for small countries. ‘Europe was essentially created to avoid wars and to create values of tolerance. Look at what happened to Portugal and Spain after their dictatorships: bringing them into Europe brought them very quickly into the democratic process, and a more open society. The same applies to the Eastern European countries now, it’s important to bring them in quickly.’
Tayart maintains, persuasively, that in the future foundations will have to work more and more together. If a foundation starts working in Eastern Europe, it makes no sense to do it alone: it won’t have the scale or the experience, so sitting down together will be crucial. But, he warns, ‘this is not an easy argument because foundations are by their nature individualistic. Our endowments give us autonomy, and we all know that we are the best!’
What next for the EFC?
Tayart’s immediate ambitions are modest: ‘What we are trying to do now is to convince at least ten foundations to do more. But I am sure that over the years we can convince more.’ But Europe is not ready for the system operated by the US Council of Foundations, where members pay a fraction of their endowments or their budgets in fees. ‘We cannot do that in Europe because most of thee big foundations don’t have a very European outlook yet.’
A key task here will be to get foundation boards and trustees more involved. According to Tayart, support for the EFC has always been very much a matter of motivation on the part of the executive directors, who put some money on the table for some projects, ‘though never very large sums or for a very long period’. The danger of this approach is obvious: the support is too much linked with an executive director who believes in a European approach. When the director leaves, the support and interest may well cease.