15 July 2019

Researchers and practitioners explore ways to ease cross-border philanthropy in Europe

At a pre-conference event ahead of the 9th International Research Conference of the European Research Network on Philanthropy (ERNOP) a group of researchers and practitioners came together to discuss the legal barriers to cross-border philanthropy in Europe and potential solutions to them. The event was held on 3 July 2019 at the University of Basel.

Participants discussed how the lack of non-profit oriented European regulatory measures and the existence of complex national (tax) laws − and sometimes even foreign funding restrictions − inhibit cross-border philanthropy. The event explored past attempts at solutions along with new ideas, including more distant views from researchers across the Atlantic (see the blog post reflecting on the discussion).

This pre-conference event was jointly organised by Prof. Oonagh Breen from the University College Dublin, Prof. Lloyd Mayer from the University of Notre Dame (US), and Hanna Surmatz from the European Foundation Centre in Brussels. The University of Notre Dame provided financial support for the event.

Participants were invited to three consecutive afternoon sessions on:

Prospects for European regulatory measures with a focus on European company law,

  • Oonagh B. Breen, UCD Sutherland School of Law (moderator)
  • Dominque Jakob, Universität Zürich
  • Wino Van Veen, Vrije Universiteit Amsterdam

Tax laws barriers and the application of the non-discrimination principle established by the European Court of Justice and the related concept of comparability

  • Lloyd Hitoshi Mayer, University of Notre Dame (moderator)
  • Anne-Laure Paquot, Transnational Giving Europe
  • Giedre Lideikyte-Huber, Université de Genève
  • Hanna Surmatz, European Foundation Centre

Emerging issues including both European and country-specific measures and sector ideas to improve the situation.

  • Max von Abendroth, Donors and Foundations Networks in Europe (moderator)
  • Francesca Fanucci, European Center for Not-for-Profit Law
  • Hanna Surmatz, European Foundation Centre
  • Wino Van Veen, Vrije Universiteit Amsterdam

Participants discussed legal developments at the national level that are leading to new barriers to cross-border philanthropic transactions, and the (in)ability of European law to respond effectively. Analysing the difficulty of past initiatives related to European company law to remedy these kinds of developments, experts on the European Association, European Foundation Statute, and European Mutual Society were invited to share their views on potential ways forward for European company law. Facilitation of for-profit entities’ cross-border work is a given within the EU – should there not be similar support for philanthropic organisations on a cross-border basis (around issues relating to merger, move of seat etc)? Following the withdrawal of the European Foundation Statute, what could we do differently if embarking on this journey again? Participants agreed that to reopen conversations around supranational legal forms, a legal basis other than the Statute would have to be identified.

The work of the EFC and DAFNE to better understand the European landscape for philanthropy with a view to seeking mechanisms to protect and enlarge the philanthropic space was presented in this context starting from the 2018 Report on Enlarging the Space for European Philanthropy by Oonagh Breen. The sector has since developed a European Philanthropy Manifesto in March 2019, which got some key institutional backing with the recent European Economic and Social Committee (EESC) Opinion on the Untapped Potential for Philanthropy based on a request by the Romanian Presidency of European Council and published in May 2019.

Tax-effective cross-border philanthropy still does not work in practice. The importance of the ECJ decisions that have applied the non-discrimination principle to both foundations and donors when it comes to tax exemption and other tax benefits has been implemented at the national level in different ways. EFC and TGE research was presented with solutions to overcome remaining barriers. The sector within its Philanthropy Advocacy initiative guided by DAFNE and EFC will set up a task force to move these suggestions forward.

New laws discouraging cross-border philanthropy are part of a wider discourse around the “closing space” for civil society organisations, and are increasingly also introduced inside the European Union. In Europe however there appear to be viable legal channels for challenging laws where they are in conflict with European law or fundamental rights, including through the ECJ and the European Court of Human Rights. Additionally, various actors, including the European Center for Not-for-Profit Law (ECNL), are key defenders of the space for wider civil society in Europe.

There is growing support for philanthropy in Europe as demonstrated by the European Philanthropy Manifesto and the ESSC’s opinion on the untapped potential of European philanthropy. The sector is ready to move and is grateful for creative academics to explore how best to do this.