The president of the board of trustees at the Ernst Göhner Stiftung, Beat Walti, sees the liberal order as a guarantee of a diverse charity sector. A lawyer and National Councillor for the FDP, he views charities’ freely disposable funds as a valuable addition to state funding.
You’re involved in all kinds of charities. What do you find fascinating about this sector?
Nowadays, we’d call it ‘diversity’. This sector is so diverse and marked by all kinds of different objectives, which founders have laid down in their charities’ objects with both conviction and a good deal of dedication. I’m particularly fascinated by their strong personal commitment – you can feel it behind every charity.
You’re president of the board of trustees of the Ernst Göhner Stiftung, which is a very professional organisation. Do you still have a sense of who your founder was?
Yes, absolutely: our founder is omnipresent. The Ernst Göhner Stiftung covers a broad spectrum, being a company foundation, a philanthropic foundation and a family foundation. These purposes also serve as the guiding principles for the board of trustees.
How do these guiding principles come to bear?
We carry out a strategy discussion at regular intervals just like a corporation would do, making it crystal clear that we’re focusing on what our founder wanted. Our task lies in making his idea a reality. Ernst Göhner himself achieved impressive things during his life, and we are indebted to his entrepreneurial legacy. Ernst Göhner was a very innovative man: he broke through structures while also acting as an advocate for Switzerland as a place to live and work. We want to uphold these ideas, and the same dedication applies to the philanthropic sector.
How did you end up working with foundations?
My first contact with the world of foundations took a rather ‘traditional’ form, via the charitable sector.
What does that mean?
When I was a cantonal councillor in Zurich around 20 years ago, Züriwerk asked if I would like to be on their board of trustees. The charity’s work focuses on helping people with mental disabilities. In general, charitable organisations in the social sphere are dependent on public funding, so including a politician on their committee made it easier to get their concerns heard. That was my first encounter, and there were points of contact in my job, too: as a lawyer, I have established foundations and advised them.
Establishing a foundation isn’t the only hefty administrative task involved. Are increasing requirements putting the diversity of the sector at risk?
Yes, that’s a trend that we need to watch carefully. In general, the expectations in terms of documentation and regulatory requirements are getting ever higher. Little distinction is made between tiny charities and huge ones, and these regulations tend to be focused on more complex foundations.
Does it make sense to regulate charities like this?
Switzerland has been so successful as a home for foundations over the past few decades because it was so freely regulated. Motivation alone is a good reason to keep this liberal basic order: it enables an incredible range of ideas to be made a reality. If people want to put some of their private assets into a foundation, it is fair that they might not want to take a mountain of requirements into account. From a legal perspective, this is always a definitively autonomous special asset, with its own purpose. Founders leave the foundation’s capital alone.
And what role does the Supervisory Authority play?
We need a purposeful, target-focused, effective Supervisory Authority in the charity sector because there aren’t any owners to monitor what charities are doing. Corporations have owners who protect their holdings and review the deals done. Foundations don’t have this level of monitoring, so the Supervisory Authority fills this gap. It can, and should, ensure that charities’ funds are not being used for inappropriate purposes.
What does this mean for small charities?
There are small charities that do their work with a modest amount of capital. They often have a very specific purpose, plus straightforward management structures and processes for awarding funds. As a result, you’d be justified in asking how comprehensive their accounting documentation needs to be. Of course, at the end of the day, we need to guarantee that the funds are used for their intended purpose. It’s right that the Supervisory Authority wants to see annual accounts. But as far as these charities go, we need to question anything else, and in particular those things that have recently been pushing supervisory fees skyward. In an ideal world, we would reduce the administrative burden on charities below a certain size.
Do we even need small charities?
Definitely. You can’t just shrug your shoulders and say, well, the small charities should just simply merge with each other. In practice, a small structure with a good idea can achieve very worthwhile things. It shouldn’t fail because of regulatory conditions. Of course, there is a sensible minimum size, and small charities can limit their outlay by focusing their projects on one area that the board of trustees is familiar with, the area in which the charity itself has (or is developing) its expertise.
Doesn’t this put the smallest projects at risk?
At the Ernst Göhner Stiftung, we adhere to the philosophy of explicitly supporting small projects, too. By small projects, we’re talking about sums of less than 5,000 Swiss francs. We do this because in the cultural sphere, in particular, there are lots of small projects that give rise to an extremely dynamic effect – that’s valuable, and we want to encourage it.
‘We need to show what’s being achieved in this sector, what’s behind it.’
Do you work with other charities?
Yes. On the one hand, the Ernst Göhner Stiftung acts as a pioneer: we’re a professional organisation, with highly experienced employees who review applications and skilfully assess the projects. This assessment can also be helpful for other foundations. On the other hand, we systematically work with the Gebert Rüf Stiftung in the field of start-up and innovation funding. Our ‘Venture Kick’ project has seen us offer funding to university-based start-ups across multiple stages for more than ten years. These start-ups have created thousands of jobs already, generating something valuable for the economy. This was only possible because our two foundations used the necessary funds to make substantial long-term investments. In the cultural sphere, we collaborate with organisations including the Kiefer Hablitzel Foundation, and we also work with the Swiss Study Foundation to support talented individuals via the scholarship programme.
What are the benefits of a collaboration?
Lots of foundations have a narrow focus, as desired by their founder, which gives them very specific expertise. When this knowledge is combined, and the financial foundations are expanded, this creates very useful collaborations.
Wouldn’t it be easier if the state took over the job done by charities?
We’re strongest when we work together. It would be going too far if everything in the cultural sphere (and in the social sphere, too) that couldn’t be realised commercially was dependent on private initiatives and personal convictions. Thankfully, those days are behind us. Conversely, there are areas where the challenges are much too diverse for a law or an administration to be able to get a grasp of them and take them into account. It’s incredibly valuable to have freely available funds for these ideas. Charities can set important impulses that then can grow into structures, into which the public hand can get involved in. This alignment needs to be an ongoing process. If we only had a state-supported cultural sphere, the philosophy of a single university of the arts could shape the direction things went in. However, if there is another area with freely available funds, this can give rise to other things that challenge the status quo. In turn, this boosts development and creates a more dynamic effect. In addition, the public purse and charities work together on lots of projects. It’s less a conflict of interest, and more a logical pairing.
Some people are calling for more transparency because this money is tax-exempt. Do charities need to explain themselves better?
The tax authorities lay down clear regulations that need to be met before an organisation – not just charities – can be tax-exempt. The list of tax-exempt organisations is publicly accessible. The transparency is there already, but if transparency means that the public need to see how every last franc is used, that’s going too far. Often, this is not in the interest of the recipient at all: foundations also work in areas where discretion is called for. Conversely, charities also know that it is often useful, or even necessary, for attaining their objectives if they can provide relevant information about their impact.
Could charities counteract this demand?
In the future, communication is going to be more important. The charitable sector needs to explain itself and show that it’s not a black box. Often, the charitable sector only comes to the public’s attention if a controversial donation is made. When that happens, the discussion falls on fallow ground. We need to show what’s being achieved in this sector, what’s behind it. Communication will be important to ensure the charity sector remains in a healthy place going forward.