Mr. Ludwig Forrest:

I thank the Chairman and other members of the joint committee. It is a pleasure and an honour, but also a huge responsibility, for us to be here today. We would like to thank the committee for the precious time it is giving us for this presentation on the importance of the european foundation statute, EFS.

The European Foundation Centre, the foundation sector in general and several philanthropists hope that Ireland will, during its EU Presidency, support this legislative proposal and make real progress to secure its adoption. The Joint Committee could help in an effective way by bringing this issue to the attention of the relevant Ministers: the Minister for Justice and Equality, Deputy Alan Shatter; the Minister for the Environment, Community and Local Government, Deputy Phil Hogan; and the Minister of State, Deputy Lucinda Creighton.

It is our responsibility to convince the committee that this would be a good idea by demonstrating the status of the sector and why it is relevant and important. On 8 February 2012, the European Commission issued a legislative proposal for a european foundation statute. The proposal must now be endorsed by the co-legislators that is, the Council of Ministers and the European Parliament. Once adopted, this new European statute will not replace national laws but will act as an additional legal tool.

The statute is a legal instrument that will allow philanthropists, individuals, families, corporations and foundations to set up a European foundation. Once registered in a member state it will be recognised in all the other member states of the European Union and the European Economic Area.

What is the importance of the foundation sector in Europe? Approximately 110,000 foundations currently exist across Europe.

Those foundations cover all the domains of the general interest and they support tens of thousands of beneficiaries on several issues. The economic footprint of the foundations is significant because they redistribute their expenditure of €100 billion every year. Almost 1 million persons are employed in the sector, which does not include indirect employment, while between 1.5 million and 2 million volunteers help the work of the foundations. It is also a growing sector. For example, there is one new foundation every day in Spain while, last year, 800 new foundations were set up in Germany. People from other European countries want to support beneficiaries in Ireland or other countries and cross-border giving is also increasing by 20% every year.

Why is it needed? I work at the King Baudouin Foundation, which is one of the largest foundations in Belgium. When we face people who want to act in the general interest in more than one country, they are sometimes blocked by administrative burdens, long procedures, several costs and not knowing where to start. We live in times where we cannot afford that anymore. We should facilitate philanthropy. The more it is facilitated, the more engagement is facilitated and the more people are enabled to act in the general interest, which is much needed now. A feasibility study was conducted by the European Commission and it estimated the additional costs of the legislative burdens at €100 million, which is a significant amount. That money could be used for purposes other than administrative burdens.

Philanthropists and foundations that want to act in more than one country often need to create a new legal structure or personality in other countries. Members can imagine it is not easy for people to do that. We have several concrete examples in this regard and during the question and answer session, we can highlight them to how important they are.

This process is being backed. The foundation sector knows we are facing an important moment. The EFC and many foundations and philanthropists have worked for years to motivate member states to work on this issue. We know that we have never been so close to the EFC but we are still far away and we are quite realistic. The DAFNE, Donors and Foundations Networks in Europe, which represents 6, 000 foundations also supports this legal process. We have the pleasure of some backing from the European economic and social committee and the committee of the regions. The European Parliament endorsed us in 2011.

These are the key elements and I do not want to delay further because questions will be important. The European foundation statute is a simple tool to promote philanthropy for the general interest and we hope, therefore, that the joint committee will help us in this regard and bring the attention of the relevant Ministers to this issue during the Irish Presidency.