Ten Things You (Probably) Didn’t Know About Philanthropy in Switzerland

Magazine article

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8 October 2013

There are 12,957 charitable foundations registered in Switzerland as of the end of 2012. This represents one foundation for every 650th Swiss citizen. The country is well recognized for its political and economic stability, liberal charitable laws and thriving financial industry that attracts significant wealth, a part of which is often allocated to charitable purposes.
The regulation of charities and tax breaks for giving differ slightly in each of Switzerland’s 26 cantons. The canton of Zurich currently counts the most charitable foundations; followed by the French-speaking canton of Vaud; and then the canton of Bern. The largest density of charitable foundations per inhabitant is found in the canton of Basel-City, which is characterized by a long and successful tradition in giving.
In general, donations to Swiss non-profit organizations are exempt from taxes. More specifically, donations to non-resident non-profit organizations can be tax exempted depending on the supported causes, while donations to Swiss domiciled non-profit organizations are usually fully deductible up to 20% of the annual income for most cantons with some exceptions.
Seventy-five percent of the Swiss population over the age of 15 donate money, goods or in kind at least once a year. Interestingly, the Swiss German people give more than their French-speaking counterparts, and in general, Swiss people are four times more generous than their French or German neighbors. Donations in general declined substantially to an average of CHF 380 per household in 2012 after two consecutive years of giving at an average of almost CHF 700 per household, which was spurred by the high number of catastrophes that occurred worldwide in that time period. Child care, fighting diseases and helping people with disabilities were among the most popular giving causes in 2012, while donations for refugees became less popular.
Humanitarian work has a long tradition in Switzerland; the International Committee of the Red Cross ICRC was founded in 1863. Apart from being an attractive jurisdiction for charitable foundations, Switzerland is home to over 400 Non-Governmental Organizations (for example Médecins sans Frontières, World Wide Fund For Nature, Terre des Hommes), more than 22 international organizations (e.g. World Health Organization, United Nations Refugee Agency (UNHCR)) and ground breaking initiatives or intergovernmental agencies (for example World Economic Forum, Global funds, Partnering for Global Impact).
In 2008, the Center for Philanthropy Studies was founded at the University of Basel to conduct research and professional training in philanthropy. Its aim is to increase and disseminate knowledge in philanthropy and related themes. At the University of Zurich, the Center for Foundation Law provides an academic venue and curriculum for those interested in foundation law. It also offers assistance to researchers, scientists and scholars.
The Swiss foundation sector – under the lead of Swiss Foundations, the association of Swiss Grant-Making foundations – has launched the first European Governance Code for grant-making foundations in 2009. The code comprises three principles and 26 recommendations for the establishment and management of grant-making foundations and has become a reference guideline point for various countries in Europe.
Switzerland has a globally recognized infrastructure for responsible activities, from philanthropic advisory services, including sound competence in Microfinance (approximately 35% of the global private sector Microfinance assets are managed out of Switzerland, with responsibility being the largest provider with 1.5 billion under management); Impact Investing leadership; and a long tradition in Sustainable Investing both on the strategic and asset management side (220 organizations are regularly active in the Swiss sustainable finance market).
The total endowment of Swiss charitable foundations is estimated at approximately CHF 70 billion, although over 80% of them are expected to comprise assets of less than CHF 5 million each. Clear reporting guidelines regarding the investment strategy of the endowment of charitable organizations still does not exist.
The investment strategies of most Swiss charitable foundations remain conservative, when social responsible investments have become a much debated topic in recent years. More Swiss charitable foundations align their investment guidelines with sustainable, long-term investment criteria and often link them deliberately to their giving causes. Efforts to improve the understanding of impact investments or mission-related investments is currently being deployed by many independent advisors.