Foundations as a tool for corporate social responsibility in Spain and Europe
In Spain there are 10,511 active foundations that have an estimated economic impact of 27 billion euros, representing 2.4% of the Spanish GDP in 2023. According to a report by the consulting firm AFI, foundations generate around 589,000 jobs, constituting 3.4% of all jobs.
For those who are not familiar, foundations are non-profit organizations that aim to carry out projects of general interest. Normally, some companies create foundations for different reasons, such as promoting cultural, educational, social, scientific or sports activities; contributing to sustainable development and corporate social responsibility; or managing programs to support the community or the environment.
Among the advantages of creating a foundation associated with a company are:
- Improved brand and corporate reputation: Creating a foundation can be an effective way to demonstrate the company’s commitment to society, which directly impacts its image and reputation.
- Contribution to sustainable development and corporate social responsibility: a foundation associated with the company allows the company to better contribute to sustainable development and take its corporate social responsibility activity to another level. This is because it can naturally promote activities that have a positive impact on the community and the environment without falling into the well-known greenwashing.
- Flexibility in the management and use of resources: Foundations have great flexibility in the management and use of their resources, allowing the company to adapt its activities and projects to specific objectives.
- Tax benefits: The creation of a foundation can bring tax benefits to the company – this depends a lot, it is not a general rule – in the form of tax deductions or exemptions, resulting in interesting economic savings.
The creation of foundations in Spain has an established process and requires meeting certain requirements. First of all, it is necessary to draft the statutes of the foundation, with information on the name, corporate purpose, governing and administrative bodies, economic-financial regime, and other relevant aspects.
Once the statutes have been drafted, the corresponding authorization must be obtained, whose function is to monitor and control the activity of the foundations.
This authorization necessary to start the activity requires submitting an application that includes the statutes of the foundation and other documentation, such as the founding members, the economic-financial viability report and the certification that the legal requirements are met.
Then it is necessary to register the foundation in the corresponding Foundation Register. This register is public and its purpose is to register and publish information about foundations and their activities. For a few years now, it has been an open registry in all Spanish autonomous communities.
Among the requirements to create a foundation in Spain are:
- Not being for profit: Their objective can only be to achieve purposes of general interest, and they cannot pursue profitability objectives.
- Have sufficient and stable assets: they must have sufficient capital to be able to meet the stated objectives, also in the long term.
- Have an appropriate structure and organization: so you can effectively meet your objectives.
- Comply with the legal and regulatory regulations applicable to your activity, such as the Foundations Act and the Patronage Act.
The creation of foundations is a common practice in Spain and other countries in Europe. In fact, foundations are one of the most common forms of non-profit organizations in Europe, along with associations and cooperatives.
Foundations in Spain are highly valued for their ability to channel private resources to general interest purposes.
In other countries in Europe, foundations also have a significant presence and are a common form of non-profit organizations. In Germany, for example, there are around 20,000 registered foundations, and in the United Kingdom, it is estimated that there are more than 160,000 foundations and charitable organizations.
