When Germans make donations
The German foundation landscape is flourishing and thriving: this is the subject of the 2007 Report on Foundations authored by the Association of German Foundations and the Berlin Institute.
Foundations in Germany have a long history. The first organisations of this kind were formed as early as the Middle Ages. In those times, it was mostly churches and secular princes who established foundations with charitable and benevolent missions. Starting in 1980, an uninterrupted foundation boom occurred, especially in West Germany. A reason for this phenomenon was that many entrepreneurs of the period after World War Two not only became wealthy, but also reached an age at which people think about sensible ways to continue the existence of their own capital.
The foundation landscape is developing rapidly – but in which direction? Are charitable organisations orienting themselves to the new needs of today’s society, or do they tend to indulge in art and culture? Which goals are pursued by the new civic foundations in which motivated people with money and ideas come together to take control of the destinies of their own communities?
The 2007 Foundations Report provides analyses and statistics on German foundations as well as information about the trends and goals of those involved in philanthropy. In addition, the report uses interviews to tell about the everyday lives of German philanthropists – from co-founder of SAP and multi-millionaire Hasso Plattner to former Minister of Foreign Affairs and current Managing Director of the German Telekom Foundation, Klaus Kinkel.
The capital of foundations among Germany’s cities is Hamburg, with the highest absolute number of foundations. Frankfurt am Main sets the record in terms of the number of inhabitants who donate funds. A significant number of foundations are located in cities which have a long tradition of civic participation and residents taking responsibility into their own hands – the Hanseatic cities of Hamburg and Bremen, for example. Today however, an increasing number of foundations are located in places that are home to universities and centres of administration. Foundations dedicate themselves to science and research, the protection of nature and the environment, as well as charitable and cultural missions – areas for which the state tends to have fewer resources or in which civil society can operate much more efficiently than official bureaucracies.
When thinking of foundations, vivid personalities such as John D. Rockefeller and Bill Gates come to mind. One tends to also think of long-dead entrepreneurs such as Kurt A. Körber, Fritz Thyssen and Robert Bosch. But philanthropists are getting younger and younger, including those in Germany. Within Germany, though, the state itself remains the largest philanthropist by far. The variety of charitable missions that state foundations pursue is almost as wide as the variety of public initiatives. These missions range from environmental protection (Deutsche Bundesstiftung Umwelt - German Environmental Foundation), consumer protection (Stiftung Warentest, a consumer product testing organisation) and promotion of culture (Prussian Cultural Heritage Foundation) to education (German National Academic Foundation) and charitable missions (Contergan Foundation).
Unlike in the past, the large majority of foundations today (87 percent since 1990) are established during the lifetimes of the philanthropists who endow them. Charitable remainder trusts – those with which people do good for the community after their death – are becoming less and less important. The trend of wanting to actively participate in one’s own foundation is a clear sign that philanthropists view their own deed as a form of personal enrichment. Yet it could also constitute proof of the fact that people today have the chance to acquire large amounts of wealth at a comparatively young age. Just like the stars of the American New Economy, from Bill Gates to eBay founder Jeffrey Skoll, these people donate sums of money that foundations in earlier times only received in the form of an inheritance.
Having no children of their own is a significant motivating factor among philanthropists: 42 percent of all philanthropists are without children, while only 30 percent of the entire population are in the same situation. Most people decide to establish a foundation between the ages of 60 and 69. In light of demographic changes, there is a good chance that large sums of money will be transferred to foundations. This form of holding onto wealth is certainly the most sustainable, since foundations are obligated to preserve their endowment and grow in an inflation-safe manner. They may only finance their charitable work using earnings from their endowment and other additional income.
The Foundations Report was financed by the Federal Ministry of Family Affairs, Senior Citizens, Women and Youth and by the Körber Foundation in Hamburg.
