Reasons for the establishment of foundations

Up until the High Middle Ages the paramount purpose of a foundation was to secure for the founder the reception of the saints and salvation from purgatory and hell in return for his commitment to the weak, the old and the sick.

The pious deed ("pia causa") was supposed to make God almost a debtor of the founder. Today the unconditional rule of the founder's will, secured by foundation law, and the potential immortality of the foundation form a part of their appeal.

The thought of extending a part of one's own life and if desired one's own name beyond the boundaries of mortal existence with the help of a foundation is fascinating and together with altruistic motives gives cause to bring foundations into existence.

For some entrepreneurs, patrons or wealthy people the idea of "destroying part of their wealth themselves in an intelligent manner, instead of possibly leaving this job to their heirs" via the setting up of foundations constitutes an exciting form of "sponsorship".

Another substantial appeal is formed by the tax aspects for the founder. With the entry into force on 1 January 2000 of the "Law on further fiscal support of foundations", in addition to the existing donation framework, funds for cultural purposes are deductible for the donor.

For the rest, donations to a charitable foundation are exempt from capital transfer tax and inheritance tax. This also applies retroactively to assets which themselves have been inherited or acquired by donation.