Taxation, philanthropy and implications for practice

ERNOP Science and Society Seminar: Taxation, philanthropy and implications for practice

By Dr Giedre Lideikyte Huber from the from the Geneva Centre for Philanthropy at the University of Geneva

Discussant: Hanna Surmatz, director of the EFC and Dafne Philanthropy Advocacy Initiative

May 25, 2021, 10.00-11.00 AM (CET)

About this seminar

The focus on philanthropy has substantially increased over the last decade, attracting growing attention from policy makers, the media, the academic community and the public at large. Such global events as the COVID-19 pandemic and, at a smaller scale, the Notre Dame catastrophe have raised public awareness of the tax treatment to be applied to philanthropic initiatives. The relationship between taxation and philanthropic giving poses a number of fundamental questions. For instance, what is the goal of tax reliefs for donations, and is it justified? Are tax incentives for philanthropy a cost or a benefit to society? Are tax incentives designed in a fair and efficient manner? Can the best practices be identified by comparing existing tax incentives in different jurisdictions?

Favourable tax policies are one of the aspects in a broader legal environment that can enable philanthropic organizations to succeed. However, to what extent they are contributing to decision making or practice within philanthropic organisations? Is taxation a macro factor that can be hardly influenced by individual organizations and is collective action needed?

For the practitioners in the philanthropic sector, at least at a certain level, taxes are one of the key elements to consider, because they can materially affect the resources of any non-profit entity. Having knowledge of tax issues may favour structuring and attracting funds for the benefit of these entities. As the tax treatment of philanthropic entities and transactions can be different from country to country, it is important to understand their subtleties in a cross-border context, as this could influence the choice of jurisdiction for philanthropic initiatives and avoid hurdles.

The recent OECD report on Taxation and Philanthropy, initiated by the Geneva Centre for Philanthropy of the University of Geneva, provides relevant practical insights into this domain as well as the potential for improvement. Among other subjects, it also discusses as to why it is justified to grant tax reliefs to philanthropic initiatives, a fact which is sometimes questioned to the detriment of the non-profit field.

During this seminar, we will discuss about these questions, based on the findings of the OECDs Taxation and Philanthropy report.

About the Geneva Centre for Philanthropy at the University of Geneva

Geneva is one of the most important global philanthropy hubs. In 2017, the University of Geneva established the Geneva Centre for Philanthropy to conduct global inter-disciplinary research and teaching in this field. The centre works in close cooperation with the different faculties in the University of Geneva.

The Centre for Philanthropy is a public-private partnership between UNIGE and a number of and number of key philanthropic foundations with an international reach.

Among its activities,  the GCP organises an international academic conference which offers open dialogue on innovative themes between academics researching in the field and different stakeholders. The 2020 Conference focused on Philanthropy and taxation gathering prominent scholars from around the world in different disciplines.

GCP has defined 4 priority topics:

  • Taxation and philanthropy
  • Social entrepreneurship and Hybrid entities
  • Motivations for giving
  • Diversity in foundation boards

About Hanna Surmatz

Hanna Surmatz, Enabling Environment Manager at the European Foundation Centre (EFC) in Brussels, has been working towards a favorable operating environment for institutional philanthropy since 2004. As of 2019 she is directing on behalf of the EFC the joint Donors and Foundations Networks in Europe (DAFNE) and EFC Philanthropy Advocacy initiative. Her main responsibilities include monitoring and mapping/analysis of relevant developments that affect foundations’/funders operating environment in Europe and beyond; co-ordination of benchmarking exercises; and facilitating information exchange on relevant legal and tax law matters through publications and events and engagement with policymakers and academia on that topic. Between 2001 and 2004 she was employed by the Association of German Foundations (Bundesverband Deutscher Stiftungen) in Berlin, where she worked on foundation law issues and international matters. She studied law at the Westfälische Wilhelms-University Münster, Germany and at the University of Poitiers, France and worked as assistant researcher at the University of Münster for several years. She also served on the board of the European Center for Not for Profit Law (ECNL) for two terms and has since 2017 been the representative of the philanthropic sector in the Financial Action Task Force (FATF) Private Sector Consultative Forum (PSCF) and since 2019 also in the OECD Tax Business Advisory Group.

About Philanthropy Advocacy

Philanthropy Advocacy is a joint Dafne & EFC initiative which acts as a monitoring, legal analysis and policy engagement hub for European philanthropy. Its main objective is to shape an enabling national, European and international legislative environment for philanthropy and foundations in Europe. More information can be found at https://www.philanthropyadvocacy.eu/