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According to an internationally agreed definition, a foundation is a non-governmental and non-profit making body having an endowment fund of its own, and managed by its own trustees or directors to serve the common welfare. It must be distinguished from an association, which is essentially a group of private individuals or legal entities undertaking a common project. When a private individual creates a foundation, he/she establishes a new institution that must be distinguished from the founder.
In Western countries, they are the main institutions through which private funds and other resources are made available to the community in all spheres: culture, health, education, employment, environment, culture, human rights, etc.
The comparative perspective shows that their legal status and social significance can be very different from one country to another. Private foundation are considered as public foundations when they are created by a public authority, in consequence of which, although the funds have been provided out of the public purse, the fund thus created is governed only by the rules of private law (van der Ploeg and Hondius 2001).
In Europe, there are more than 114,000 “public-benefit foundations” operating from the local to the international level, with a combined annual giving of more than 53 billion euros (DAFNE 2014). In Anglo-American countries, trusts and corporations can be foundations in the form of a legal person in civil law. In England and Wales, near equivalent terms are charities, corporate funders, philanthropic entities and other players. Generally, foundations are more commonly found in countries like the United States, Germany, the Netherlands, the Scandinavian countries, Switzerland, Spain or Italy than in France and other European States. In some countries they are regulated by statute law, in others by judge-made or customary law. In some States no foundation may be set up without a previous public authorisation.
The methods used to attain their goals also appear to be different from one cultural or historical background to another, as well as the definition of what is considered to be good for man, society or human nature. The varying purposes of foundations take a renewed significance when these operate within an international context, as they are confronted with what is good or useful for the community or mankind as a whole in such fields as peace, the protection of the environment, or social, political and cultural rights. As a consequence, foundations are both a unique field of legal experimentation in the formation of international law, and a specific category of actors in international and transnational relations.
When centered on grant-making, foundations can have different functions. They can take an interest at the macro level, where issues of structure, systemic and institutional change, and fundamental issues of global, national and local governance are being tackled; they can make contributions to policy making interventions, like the Ford Foundation, the Charles Stewart Mott Foundation and the Rockefeller Foundation, all from the US, which supported the policy making objectives of the World Conference Against Racism in Durban in 2001 by making extensive investments, despite the reservations about participating shown by the US government; thirdly, they can operate at the micro level, supporting service delivery in various areas of human endeavour (around 75 percent of grant making according to CIVICUS).
Whether based on grant-making, operational projects or policy-making interventions, foundations may be involved in macro governance and confronted with specific issues. It may be hard to measure long-term results of their involvement, assess the advocacy work being done on their behalf, or avoid the contradictions of global inequality between wealthy northern countries and poor developing countries. In a number of cases, ethical questions arising from grant making may weaken fair cooperation, lead to criticisms of donor-driven approaches and undermine the original aims of development projects.
For all those reasons, foundations are sometimes associated with the ‘soft power’ concept, especially when they are politically oriented and aim at promoting contacts between some social sectors and their counterparts in other countries. For example, the Konrad Adenauer Foundation in Germany made it possible for Angela Merkel, when she was the Environment minister (1994-1998), to get in touch with Chuck Hagel, who was later the American Defense Secretary.
These questions have led grant-seeking organisations as well as grant-making organisations to improve transparency, which involves the need to produce regular reports. As an intrinsic part of the broader fabric of civil society, international foundations are expected to be subject to the same burdens of public accountability, with a view to promote their legitimacy in a changing global context.
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