{"id":18547,"date":"2023-08-29T15:07:06","date_gmt":"2023-08-29T13:07:06","guid":{"rendered":"https:\/\/spheriq.ch\/blog\/definition-stiftung\/"},"modified":"2026-05-19T15:12:56","modified_gmt":"2026-05-19T13:12:56","slug":"definition-stiftung","status":"publish","type":"post","link":"https:\/\/spheriq.ch\/blog\/en\/definition-stiftung\/","title":{"rendered":"What is the definition of a foundation and what types of foundation are there?"},"content":{"rendered":"\n

Foundations are an important pillar of Swiss philanthropy – Switzerland has the highest density of foundations in the world. But what exactly is the definition of a foundation and what is the purpose of a foundation? In this article, you will find background information on the organizational form of the foundation as well as an overview of the most common types of foundation in Switzerland. <\/p>\n

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\n\t\tInhaltsverzeichnis\t<\/div>\n\t\t
    \n\t\t\t\t
  1. \n\t\t\tWhat is the definition of a foundation?<\/a>\n\t\t<\/li>\n\t\t\t\t\t
  2. \n\t\t\tDifferences between the various types of foundation<\/a>\n\t\t<\/li>\n\t\t\t\t\t
  3. \n\t\t\tGrant-making foundation<\/a>\n\t\t<\/li>\n\t\t\t\t\t
  4. \n\t\t\tOperational foundation<\/a>\n\t\t<\/li>\n\t\t\t\t\t
  5. \n\t\t\tRoof foundation<\/a>\n\t\t<\/li>\n\t\t\t\t\t
  6. \n\t\t\tConsumption foundation<\/a>\n\t\t<\/li>\n\t\t\t\t\t
  7. \n\t\t\tCorporate foundation<\/a>\n\t\t<\/li>\n\t\t\t\t\t
  8. \n\t\t\tFamily foundation<\/a>\n\t\t<\/li>\n\t\t\t\t\t
  9. \n\t\t\tEcclesiastical foundation<\/a>\n\t\t<\/li>\n\t\t\t\t<\/ol>\n\t<\/div>\n\n

    What is the definition of a foundation?<\/h2>\n\n

    In principle, a foundation requires assets that are earmarked for a specific purpose. When establishing a new foundation, the founder determines how the foundation’s assets are to be used. This so-called foundation purpose<\/strong> can be broadly or clearly defined. From then on, this purpose is set out in the foundation deed and can only be changed again in exceptional cases. <\/p>\n\n

    Contrary to general opinion, a foundation’s purpose does not necessarily have to be of a charitable nature<\/a>. Some foundations also pursue a purely economic purpose, or only use their money for a very limited target group, such as family foundations – but these foundations are not charitable foundations and are therefore not tax-exempt. <\/p>\n\n

    The foundation’s assets consist of core assets<\/strong> and fixed assets<\/strong>. The core assets are the initial capital that the founder invests when the foundation is established. In Switzerland, this capital must generally amount to at least CHF 50,000 and can also come in the form of tangible assets. Subsequently, the initial capital is mainly used to invest in assets and in many cases remains untouched. The income from these investments then constitutes the fixed assets, which are generally spent on pursuing the foundation’s objectives. Such a structure allows foundations to exist long after the death of the original founders and to pursue the foundation’s purpose closely. Consumer foundations are an exception – but more on this later. <\/p>\n\n

    In general, foundations must be entered in the commercial register<\/strong>. Charitable foundations are also subject to state supervision<\/strong>. <\/p>\n\n

    Differences between the various types of foundation <\/h2>\n\n

    Foundations are divided into different types depending on their activities, scope, structure or group of beneficiaries. Some of these classifications are based on legal principles, while others are purely substantive distinctions. <\/p>\n\n

    Grant-making foundation <\/h3>\n\n

    Grant-making foundations<\/a> are charitable and provide financial support to other organizations, projects or individuals. They do not implement projects themselves. They accept applications from project sponsors, evaluate them and provide financial support if the project matches the purpose of the foundation and the funding criteria. Such financing can be provided on a one-off basis or regularly over a longer period of time. <\/p>\n\n

    Operational foundation <\/h3>\n\n

    Operational foundations plan and implement their own projects, run institutions or organize events. As they are active in pursuing their purpose themselves, they usually do not approve funding applications – and in many cases they do not have extensive assets of their own that could be used for this purpose, but are themselves in search of funding. The implementation of their goals can take many forms, such as offering advice, their own projects or the use of a property they own for a charitable purpose. <\/p>\n\n

    \n
    \n
    \n
    \n
    \n \n <\/div>\n
    \n

    Special form: mixed activity<\/p>

    In practice, there are numerous organizations that implement projects themselves, but also provide external financial support. It is difficult to make a precise classification here, but these organizations are usually more active in one area than another and are classified accordingly. <\/p>\n <\/div>\n <\/div>\n<\/div>\n<\/div>\n<\/div>\n\n

    Roof foundation <\/h3>\n\n

    An umbrella foundation<\/a> offers founders a platform to carry out their own funding activities under its umbrella without having to set up their own foundation. In this case, the founders themselves determine the charitable purpose to be achieved by the assets they contribute. The umbrella foundation takes over the professional management of these funds and ensures that the funds are used for the intended purpose. Such a fund within the umbrella foundation is also called a dependent foundation. <\/p>\n\n

    Consumption foundation<\/h3>\n\n

    Expendable foundations are not intended for perpetuity. Formally, this means that the foundation bodies do not have to preserve the foundation’s assets, but may spend the assets themselves for the purpose in addition to the income. As a result, the assets become smaller and smaller until they are finally used up – this is known as a sunset foundation. Classic, capital-preserving foundations, on the other hand, are structured in such a way that only the returns are used for the foundation’s purpose, but the capital must be preserved. Although this strengthens long-term sustainability, it can also lead to a mismatch between operating expenditure and the amount of funds made available. <\/p>\n\n

    Corporate foundation <\/h3>\n\n

    The term corporate foundation has two meanings. In the general sense, it refers to a foundation with close links to a company. Such foundations usually enable charitable purposes through income from the private sector, often with a connection to the company’s activities. They are also known as corporate foundations and can be understood as corporate social responsibility (CSR) measures. <\/p>\n\n

    In the narrower sense, corporate foundations are foundations that aim to ensure the survival and success of a specific company. There are two sub-types, so-called corporate foundations<\/strong> and so-called holding foundations<\/strong>. Corporate foundations directly operate an economic enterprise such as a hospital or a home. Holding foundations, on the other hand, only operate the commercial enterprise indirectly, but hold a significant or sole financial interest in the company. Holding foundations can also own and thus control profit-oriented companies. The path via a foundation is usually chosen here in order to protect the purpose of the company and to make a hostile takeover through share purchases more difficult. <\/p>\n\n

    Family foundation <\/h3>\n\n

    This type of foundation serves to preserve the family’s assets and provide financial support for its members. Family foundations are not charitable and for this reason do not receive tax exemption. Establishment is only permitted in Switzerland for specific purposes. These include the education of the beneficiaries, retirement pensions or the establishment of a business. It is important that only family members and descendants of the founder are beneficiaries. <\/p>\n\n

    Ecclesiastical foundation <\/h3>\n\n

    In contrast to traditional foundations, an ecclesiastical foundation is not (or only to a limited extent) subject to a state supervisory authority, but to an ecclesiastical body. This can be a church council, a central board or a diocese. At the same time, this type of foundation is linked to a specific religious community. <\/p>\n","protected":false},"excerpt":{"rendered":"Foundations are an important pillar of Swiss philanthropy – Switzerland has the highest density of foundations in the world. But what exactly is the definition of a foundation and what is the purpose of a foundation? 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