Background: nonprofit foundations

A foundation (also referred to as a charitable foundation) is a type of nonprofit organization or charitable trust that usually provides funding and support to other charitable organizations through grants, while also potentially participating directly in charitable activities. Foundations encompass public charitable foundations, like community foundations, and private foundations, which are often endowed by an individual or family. Nevertheless, the term "foundation" might also be adopted by organizations not primarily engaged in public grantmaking.

Description

Legal entities existing under the status of "foundations" have a wide diversity of structures and purposes. Nevertheless, there are some common structural elements.

Some of the above must be, in most jurisdictions, expressed in the document of establishment. Others may be provided by the supervising authority at each particular jurisdiction.

Europe

There is no commonly accepted legal definition across Europe for a foundation. There was a proposal for a European Foundation Statute, a legal form that would create a legal definition recognised across all EU Member States. However, this proposal was withdrawn in 2015 following its failure to pass through COREPER 1.

Foundations in civil law

The term "foundation", in general, is used to describe a distinct legal entity. Foundations as legal structures (legal entities) and/or legal persons (legal personality) may have a diversity of forms and may follow varying regulations depending on the jurisdiction where they are created. Foundations are often set up for charitable purposes, family patrimony and collective purposes which can include education or research.

In some jurisdictions, a foundation may acquire its legal personality when it is entered in a public registry, while in other countries a foundation may acquire legal personality by the mere action of creation through a required document. Unlike a company, foundations have no shareholders, though they may have a board, an assembly and voting members. A foundation may hold assets in its own name for the purposes set out in its constitutive documents, and its administration and operation are carried out in accordance with its statutes or articles of association rather than fiduciary principles.

The foundation has a distinct patrimony independent of its founder.

Finland

Foundations are considered legal persons in Finland. The Foundations Act in 2015 dramatically updated the laws regarding foundations.