Next step to a Single Market for Philanthropy

Nächster Schritt zu einem Binnenmarkt für Philanthropie cover
May 16, 2024

King Baudouin Foundation, together with Philea and its partners and the Lex Mundi network, updated the status of the Single Market for Philanthropy in the EU by compiling data in the 27 Member States. This information is published in a “Guide towards a Single Market for Philanthropy” that will be freely available for donors, beneficiaries and policymakers.

This update, titled "How to Become a True European Foundation in a (Not Yet) Single Market for Philanthropy," wants to enable and calls for the simplification of cross-border donating in the European Union.

While the European Union was built on the concepts of free trade and a single market economy, cross-border philanthropy continues to face serious challenges. EU countries offer their residents tax incentives for charitable donations and bequests to domestic NPOs, but these same incentives may not always be available to residents who want to support NPOs in other Member States.

There are many obstacles, particularly regarding the registration, agreements, and approval processes involved in the 27 Member States for foreign NPOs having donors in another Member State. Only through this procedure can (potential) donors living in those Member States receive the tax incentives to which they are entitled.

Within the framework of the Belgian Presidency and on invitation of Vincent Van Peteghem, Federal Minister of Finance, the King Baudouin Foundation (KBF), member of the Myriad Alliance, presented on Thursday 16 May this report and guide for non-profit organisations in the EU at the High Level Working Party on Tax Questions.

Due to rulings by the European Court of Justice and the tireless work of organisations such as Philea and Transnational Giving Europe, enormous strides have been made in cross-border philanthropy over the last two decades. The guide illustrates the fruits of this labour:

  • Tax incentives for donations to foreign-based NPOs are available in 26 Member States
  • Tax incentives based on comparability are available in 24 Member States
  • Registering as a foreign-based NPO is possible in 15 Member States

Unfortunately, the legal requirements and costs involved for NPOs in proving “comparability” or in becoming registered as a foreign-based NPO often prove insurmountable. This can be a deciding factor as to whether a donor – individual or corporate – supports beneficiaries outside of their tax jurisdiction, which has serious consequences for the non-profit sector and the European citizens it serves.

The Guide to cross-border philanthropy

“How to Become a True European Foundation in a (Not Yet) Single Market for Philanthropy" was developed in collaboration of the Lex Mundi, which led the research conducted by their partners across the 27 member states. This collaboration enabled the completion of a very detailed questionnaire by legal firms in every EU country.

Ludwig Forrest, Director Center for Philanthropy (KBF):

We at the King Baudouin Foundation and our partners in philanthropic institutions across Europe are observing a new wave of giving, including donations that are increasingly crossing borders. We are seeing how the public sector and private philanthropic foundations are able to trust and complement each other for the benefit of all our fellow citizens and European solidarity. It’s a win-win situation.

Member States and the EU should unleash even more than before the full potential of philanthropy across Europe and to allow it to play its agile, innovative and complementary role.”

The guide is publicly available as of today to support every NPO and philanthropist in Europe and is published in tandem with the report Cross-border philanthropy: The state of the union in European-wide giving, which details the principles, economic impact and current challenges of cross-border giving in the EU, as well as the way forward:

KBF additionally launched a project to become registered or establish comparability in every Member State. By going through the process itself, KBF will be able to share the experience with fellow NPOs, with legal firms, with philanthropists and with both EU and national policymakers.

For Your Info

KBF – King Baudouin Foundation: A Belgian community based foundation for a better society in Belgium, Europe and elsewhere in the world. The Foundation is an actor for change and innovation, serving the public interest and increasing social cohesion. -

Lex Mundi: Lex Mundi is the world’s leading network of independent law firms. It brings the best together – law firms, lawyers, and business professionals – in more than 125 countries to provide world-class cross-border legal solutions. –

Myriad Alliance: A worldwide Alliance for Cross-Border Giving of which KBF is member –

Philea: Philea nurtures a diverse and inclusive ecosystem of foundations, philanthropic organisations and networks in over 30 countries that work for the common good. With individual and national-level infrastructure organisations as members, it unites over 7,500 public-benefit foundations that seek to improve life for people and communities in Europe and around the world. Philea galvanises collective action and amplifies the voice of European philanthropy, and in all it does, it is committed to enhancing trust, collaboration, transparency, innovation, inclusion and diversity.

Swiss Philanthropy Foundation is an independent umbrella foundation based in Switzerland hosting a Fund that co-funded the update :

Transnational Giving Europe: The TGE network covers 19 countries and enables donors, both corporations and individuals, resident in one of the participating countries, to financially support non-profit organisations in other Member States. –