When Germans Support Charities
German foundations are flourishing: this is the subject of the 2007 Report on Germany's Foundations jointly authored by the Association of German Foundations and the Berlin Institute.
Foundations have a long history in Germany. The first such organisations were created as early as the Middle Ages. Back then, the majority of foundations serving non-commercial and benevolent purposes were established by secular princes and the churches. From 1980 onwards there has been an uninterrupted explosion of new foundations in Germany, particularly in the West. One reason for this boom was that many wealthy entrepreneurs from the post-World War II era began reaching the age when people start to reflect upon posterity – and contemplate practical ways of preserving their own capital.
The world of foundations is evolving rapidly – but in which direction? Are Germany’s charitable organisations aligning their activities with the changing needs of modern society, or are they focusing more on art and culture? Which goals are being pursued by the new civic foundations – in which highly motivated people with money and ideas are joining forces and taking control of their own communities' destinies?
The 2007 Foundations Report provides analyses and statistics on German foundations, backed by information on the trends and goals of those engaged in charity. In addition, the report uses interviews to illustrate the everyday lives of German philanthropists, from the multi-millionaire and co-founder of the software company SAP, Hasso Plattner, to Germany's former Minister of Foreign Affairs and the current Managing Director of the German Telekom Foundation, Klaus Kinkel.
Hamburg – with the highest absolute number of foundations – is Germany's foundation capital. Frankfurt holds the record for the number of inhabitants donating funds. A significant number of these bodies are based in cities with a long tradition of civic participation, i.e. of residents taking responsibility into their own hands. These include the Hanseatic cities of Hamburg and Bremen. Today, however, an increasing number of foundations are located in places that are administrative centers or home to universities. They are dedicated to science and research, to environmental protection and conservation, as well as to charitable and cultural missions – areas for which the state tends to have fewer resources and stages where civil society can operate far more efficiently than the civil service.
In this context, vivid personalities such as John D. Rockefeller and Bill Gates come to mind. Germans also tend to think of long-passed entrepreneurs such as Kurt A. Körber, Fritz Thyssen and Robert Bosch. But philanthropists are getting younger and younger in Germany as well. Notwithstanding this, the state remains the country’s largest benefactor by far. The array of charitable objectives that national foundations pursue is nearly as broad as the array of public initiatives. These objectives range from environmental protection (Deutsche Bundesstiftung Umwelt - German Environmental Foundation), consumer services (Stiftung Warentest, which produces reports for consumers) and the promotion of culture (Prussian Cultural Heritage Foundation) through to education (German National Academic Foundation) and exclusively charitable endeavours (Contergan Foundation).
Unlike in the past, the vast majority of foundations today (87 percent since 1990) are created during the lifetimes of the philanthropists endowing them. Charitable remainder trusts – with which people serve the community posthumously – are becoming less and less important. The desire to actively participate in one’s own foundation is a clear sign that philanthropists view their contribution to society as a form of personal enrichment. But it also reflects the fact that people today can acquire huge wealth at a comparatively young age. Like the stars of the American New Economy, from Bill Gates to eBay founder Jeffrey Skoll, these people now donate sums during their lifetimes that were hitherto bequeathed after the giver’s death.
Having no children of their own is a significant motivating factor: 42 percent of all German philanthropists are childless, compared to the population average of 30 percent. Most people decide to establish a foundation between the ages of 60 and 69. In a context of demographic change, there is a good chance that large sums of money will be transferred to foundations. This form of preserving wealth is certainly the most sustainable, since foundations are obligated to secure such endowments and protect their value from the effects of inflation. They may only finance their charitable work using earnings from the endowment and other additional income.
The 2007 Report on German Foundations was financed by the Federal Ministry of Family Affairs, Senior Citizens, Women and Youth, and by the Hamburg-based Körber Foundation.
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