Charitable foundations and non-profit organisations are active in many socially relevant areas, performing supporting or operationally important tasks for the common good. But should they also contribute their specialist knowledge and experience to the political discourse? And how should they do this?
Democratic discourse should reflect society as a whole: it is critically important that everyone is able to participate in this. Active democracy calls for debates and a struggle to seek the best possible solutions to social problems. It needs critical thinking, and competent and committed participants. This is the contribution made by charitable foun-dations and non-profit organisations (NPOs); they enrich the democratic discourse with their expertise and experience in a wide range of fields. Switzerland is home to more than 13,500 foundations and innumerable NPOs in fields such as healthcare, culture, education, sciences, cultural heritage, conservation, environmental protection, social affairs and the promotion of democracy. Foundations and NPOs also have an important complementary function to the state. Against this backdrop, they make an important contribution to shaping society.
Resistance in the Council of States
Many members of the federal parliament sit on foundations’ boards of trustees or boards of directors of NPOs, and the situation is similar in the cantonal parliaments. It can be assumed that foundations and NPOs are able to make members of their boards of trustees and directors aware of the specialist topics related to their charitable objec-tives. The situation is more difficult when it comes to the general framework for the foun-dation and non-profit sector; i.e. the law relating to foundations and associations, norms relating to tax exemption and deduction of donations, other fiscal standards (particularly relating to VAT), etc. Years of experience show that a considerable number of members of parliament active on boards of trustees and boards of directors barely get to grips with these topics. It is then up to individual members of parliament and associations, such as proFonds, to ensure that the general conditions develop positively and that adverse developments are avoided. This was the case with the most important revision of foundation law to date, which goes back to the parliamentary initiative proposed by Council of States member Fritz Schiesser.
Recently, the political climate has become less friendly towards the development of positive conditions. A further revision of foundation law, based on the parliamentary ini-tiative put forward by Council of States member Werner Luginbühl, has made little headway. Luginbühl started by drawing up eight targeted measures to resolve real prob-lems faced by foundations and NPOs. After the consultation process, he reduced these to two, even removing regulations that had met with approval from political parties during the consultation, including that foundations and NPOs should be able to remunerate their management appropriately (for the sake of good governance), without losing their tax exemption. It becomes difficult when the National Council takes up two key measures, including the fee rule, and the Council of States overturns them just a week later without discussion.
Design function called into question
The function of foundations and NPOs in shaping democracy is currently being called into question. The motion put forward in September 2020 by Council of States member Ruedi Noser requires that tax exemption is withdrawn from politically active foundations and NPOs on the grounds of non-profit status. However, consistent tax practice holds that organisations with political activity as their organisational purpose are not non-profit and thus cannot be tax-exempt. It is a different situation for organisations that partici-pate in political discourse and raise public awareness for their non-profit purpose. Their political activities have a subordinate function that serves their charitable objectives. It is hard to imagine how a charitable foundation with the aim of promoting democracy can fulfil its purpose if it is not permitted to participate in the democratic discourse. The same applies to the other fields of activity of foundations and NPOs mentioned in the introduction. Numerous charitable foundations and NPOs, and society as a whole, could be negatively affected by the motion.
These developments are thought-provoking. Switzerland needs more parliamentarians who can give priority to Switzerland as an important foundation location and the general conditions.