Corporate foundation and cultural philanthropy lawyers

Every foundation carries a singular commitment, to which the legal structure must give a faithful and lasting framework. For a company, that commitment may mean showcasing its heritage or involving its employees in a cultural venture. For an entrepreneur or a family, it may mean passing on a legacy or devoting a lasting share of their means to a cause close to them. Other founders wish to give new scope to an existing cultural project.

Our lawyers’ first role is to clarify the intent, what the founder genuinely seeks to achieve, before determining the most suitable structure. Objectives pursued, governance sought, funding involved, intended duration: each vehicle answers these criteria differently.

• The corporate foundation, which closely ties the company’s identity to the project, around a programme of action defined by the founders.
• The endowment fund, which offers great flexibility in its creation and governance, and may receive both donations and legacies.
• The hosted foundation, which benefits from the experience and management of an existing umbrella foundation, in exchange for more limited autonomy.
• The public-interest foundation (fondation reconnue d’utilité publique), the most accomplished form, suited to large-scale projects but the most demanding to set up.
• Corporate philanthropy carried out directly by the company, with no dedicated structure, where supporting existing organisations is enough to meet the ambition pursued.

The legal vehicle is chosen to serve the project, not the other way round.

Ahead of any incorporation, our lawyers in corporate law analyse the project and its objectives, settle on the most suitable vehicle and define the governance principles. They organise the relationships between founders, directors and partners, and structure both the funding and the flows between the entity and the founding company or family.

Incorporating the entity extends this design work. It covers drafting the articles of association and the constitutive documents, together with all the formalities specific to the chosen vehicle. Where the project is part of a broader wealth-planning strategy, our lawyers in business succession connect it with the concerns of the founding family. The aim: a structure equal to the project’s cultural ambition and built for its future operation.

Governance determines the credibility and longevity of the project. It sets who decides, under which rules, and how the founders’ intent is preserved over the years and across generations. It also carries tax consequences: the not-for-profit nature of the management (gestion désintéressée), a condition of the philanthropy tax regime, depends in part on the organisation chosen. Each vehicle, moreover, follows its own rules, more or less flexible.

Our lawyers advise on the composition of the board of directors and the other bodies, the representation of the founders, the role of qualified individuals and the possible creation of an artistic or scientific committee. Distribution of powers and majority rules, prevention of conflicts of interest, delegations and the organisation of decision-making: each mechanism is designed to preserve the identity intended by the founders while giving the project the legitimacy and autonomy it needs to develop. They also remain involved throughout the life of the structure: amendments to the articles, renewal of the governing bodies and transitions between generations of founders.

The philanthropy tax regime (mécénat) allows companies that support a cultural project to receive a tax benefit. That benefit, however, assumes that the organisation and the activities supported meet the conditions of public-interest status. An insufficiently established qualification, disproportionate benefits granted in return, or poorly framed financial relationships with the founding company can all call this advantage into question and weaken the structure.

Our tax lawyers advise in particular on:

• analysing eligibility and establishing public-interest status;
• structuring gifts and payments, and framing the financial relationships between the founding company and the entity;
• drafting philanthropy agreements and calibrating the benefits granted to patrons;
• securing tax and reporting obligations, in particular the issuing of tax receipts;
• filing a philanthropy tax ruling request (rescrit) with the tax authorities, where the situation warrants it;
• the taxation of artworks, gifts and transfers.

In this way, the firm reconciles philanthropic ambition, the project’s visibility and legal security.

Creating the structure is only a first step. A cultural foundation must then assert an identity, build a programme and carry projects that give concrete form to its founders’ ambition: building a corporate or family collection, creating an art prize or an artists’ residency, opening a space to the public, commissioning works or placing art in the public realm.

Where the project calls for it, DELCADE can point founders towards cultural professionals, who bring their artistic and operational expertise to it. The firm remains the legal and tax architect of the project and ensures the legal security of the relationships formed with them.