Different views on the ongoing revision of Swiss foundation law
On 14 September 2021, the National Council approved the amendments to the law on foundations as part of the parliamentary initiative “The Swiss Foundation Sector. Strengthening” (14.470, so-called Luginbühl initiative). The amendments were approved in the overall vote by 188 votes to 0 with one abstention. In particular, the National Council had taken up the regulation of foundation supervision complaints and the remuneration of foundation boards, which SwissFoundations, as well as other stakeholders of the sector, had strongly advocated in the legislative process. The Council of States has now opposed these two points in its session on 22 September 2021.
It should have been newly stipulated that the board members of charitable foundations can receive appropriate financial compensation for their work without this jeopardising the tax exemption of the foundation. The Council of States however sees things differently. Commission spokesman Beat Rieder argues that this measure carries the risk of funds being led away from their appropriate assignment, additionally to the risk of potential abuse.
From the viewpoint of SwissFoundations, this argument does not compare to the issue at stake. An appropriate remuneration of the boards of charitable foundations is necessary with regards to the constantly growing expectation of a professionalisation of the sector. Moreover, it serves the effective fulfilment of the purposes of the foundations. Besides, a harmonisation of the existing, partly discriminatory practice is urgently needed and should be achieved by means of legal clarification.
Furthermore, the foundation supervision complaint should be regulated by law. Anyone who has a legitimate interest in controlling that the foundation´s administration is in accordance with the law and the statutes of the foundation can forward a complaint to the supervisory authority with the right to a decision and referral to the courts. The complaints´ focus would be on acts and omissions of the foundation bodies. In addition to the beneficiaries, the legitimate interest in control may authorise active or former members of the foundation council, the founder, etc. to file a complaint. The regulation serves to protect the foundation in an appropriate manner.
In the view of the Council of States, the term “persons with a legitimate interest in control” is too imprecisely defined. Even if, in the view of SwissFoundations, the proposed criterion effectively rules out a popular complaint, it may be useful to specify who is entitled to file a complaint, even if the list is not conclusive.
The Federal Council agrees with the Council of States, said the Minister of Justice, Karin Keller-Sutter, in the Councils´ meeting. Consequently, the matter must now go back to the National Council.
by Julia Jakob, SwissFoundations
Julia Jakob has been responsible for the Legal & Policy department at SwissFoundations, the association of Swiss grant-making foundations, since 2020. In addition to her work at SwissFoundations, she is an associate at the Centre for Foundation Law at the University of Zurich and managing director of the Ingeborg Dénes-Muhr Foundation. Julia Jakob studied law at the University of Munich. Before coming to Switzerland in 2007, she worked for the Free State of Bavaria as a judge at the Administrative Court of Munich and as a government councillor at the Bavarian State Ministry of the Interior and the Government of Upper Bavaria. She has many years of experience as managing director of foundations and as a foundation councillor.