The aspiration to create your own foundation is a noble one, offering the opportunity to make a significant difference to the causes you care about. However, to realize this ambition, a crucial first step is careful planning, followed by effective management and long-term commitment. If you are prepared to take on these challenges, your foundation can become a powerful lever for positive change in society.
In this practical guide, we'll explore the motivations that might motivate you to set up a corporate foundation, as well as the concrete steps you need to take to make it happen.
What is a foundation?
Generally speaking, a foundation is a non-profit legal entity whose purpose is to promote causes or support initiatives.
Often set up by wealthy individuals or families, large corporations or institutions, foundations fund charities, environmental initiatives, the fight against poverty, educational programs, research projects, cultural activities, or other actions of public interest. These so-called philanthropic foundations manage funds and distribute them in the form of grants to organizations that share their values.
Among the world's most famous foundations are the Bill and Melinda Gates Foundation, the Rockefeller Foundation, the Ford Foundation and the Open Society Foundation.
A corporate foundation is also a non-profit organization, but created and financed by a company or group of companies, be they civil, commercial, cooperative, mutual or public industrial and commercial establishments. It pursues the same goal: to invest in cultural, educational, social and environmental projects that benefit society and the community.
Corporate foundations are often set up in the context of corporate social responsibility (CSR).
Characteristics of corporate foundations
Corporate foundations are funded by resources provided by the parent company. Areas of interest vary according to the company's values and priorities.
Each corporate foundation has its own governance structure, whether a board of directors or a steering committee responsible for deciding on funding and initiatives to be supported.
Although funded by the company, corporate foundations are independent to avoid any conflict of interest. They are, however, accountable and required to publicly disclose their activities, beneficiaries and achievements.
By setting up a foundation, the company seeks to have a positive impact on society, whether on a national or local scale, by helping charitable organizations in its area.
Why create your own corporate foundation?
More and more companies are recognizing the importance of corporate social responsibility in their operations. In response to this growing awareness, many organizations are choosing to set up corporate foundations alongside their commercial activities.
There are many reasons why you might want to set up your own corporate foundation:
- Strengthen your impact: when you support causes that reflect your values and concerns, you amplify your influence in relevant areas such as education, health or the environment, while contributing to the well-being of society.
- Enhance your company's reputation: by getting involved in social actions, you build a positive image with your customers, employees and the general public. Today, consumers are more inclined to support socially responsible companies, leading to increased sales of their products and/or services.
- Attract and retain talent: by setting up a foundation, you demonstrate a commitment that goes beyond the mere pursuit of profit, a factor likely to attract or retain talented, committed employees.
- Benefit from tax advantages: by funding a corporate foundation, you can deduct the donations you make to your foundation from your taxable income. These donations are deductible up to 60% of the amount of the donation, up to a limit of 0.5% of your sales excluding taxes. If donations exceed this limit, the excess can be carried forward to the next five years. The assets you donate (real estate, works of art, etc.) to your corporate foundation are also tax-exempt, up to their value. Last but not least, the real estate held by your foundation is exempt from CFE tax.
Steps to follow when creating your foundation
The first step is to define your foundation's mission and objectives, identifying the problems you wish to solve and the causes you wish to support. A clear mission will guide all your activities.
Then choose an appropriate name for your foundation, accompanied by a logo or representative visual identity.
Next, draw up the foundation's articles of association and by-laws, specifying its purpose, structure, mode of operation and rules of governance. Appoint at least two founders, either natural persons or legal entities, and designate a board of directors.
To become a recognized legal entity, you will need to file the articles of association and the required documents with the prefecture of the département where your foundation will be established. The prefecture will assess the relevance of the creation and give its prior approval. He will then forward the file to the Ministry of the Interior for publication in the JOAFE.
Once approval has been obtained, officially register the foundation, which will be created for a minimum period of five years.
Foundations wishing to be recognized as being in the public interest(FRUP) must register with the French Ministry of the Interior. Submit your application to the Office of Associations and Foundations by e-mail (dossiers-arup-frup@interieur.gouv.fr).
Once your foundation is established, you can start implementing your mission by allocating funds to projects via the foundation's pro account, or by carrying out philanthropic activities in accordance with your bylaws.