Phil­an­thropy, made in Liech­ten­stein: Between trans­pa­rency, networ­king and global responsibility

The VLGST has about 140 members. What would you say is the common deno­mi­na­tor between them?

Karin Schöb: The most important common deno­mi­na­tor is nonpro­fit status and a shared inte­rest in lear­ning, dialo­gue and colla­bo­ra­tion. That’s what unites them. All our members’ opera­ti­ons are exclu­si­vely and irre­vo­ca­bly nonpro­fit. Of course, they vary drama­ti­cally, whether in their orga­ni­sa­tio­nal form, their areas of funding or their geogra­phi­cal focus. This diver­sity makes our work exciting. 

What does that mean in concrete terms?

Dagmar Bühler-Nigsch: Origi­nally, the aim was to promote a better under­stan­ding of the chari­ta­ble foun­da­tion sector in Liech­ten­stein and to create the right frame­work condi­ti­ons. Today, we also want to increase visi­bi­lity. Anyone who is a member of VLGST is commit­ted to good foun­da­tion gover­nance – VLGST member­ship is a certain seal of quality. 

How many nonpro­fit foun­da­ti­ons are there in Liech­ten­stein – and how many of them are part of your association?

Karin Schöb: Chari­ta­ble foun­da­ti­ons are beco­ming incre­asingly important. The land­scape for foun­da­ti­ons has chan­ged drama­ti­cally: While there were around 60,000 private foun­da­ti­ons in Liech­ten­stein when the VLGST was foun­ded, today, there are just under 8,000. By contrast, after a decline from 2019 to 2022, we have seen steady growth in the number of nonpro­fit foun­da­ti­ons being set up once again. This reached a high of 1,398 nonpro­fit foun­da­ti­ons at the end of 2024. With a member­ship of around 140, about 10% of them are now on board with us. 

Are you happy with that?

DBN: Ten percent was a mile­stone from the outset. And now, after 15 years, we have achie­ved it. We are proud of that. Howe­ver, we still see a lot of poten­tial for our asso­cia­tion to grow.

How active are your member foundations?

DBN: That varies drama­ti­cally. Lots of foun­da­ti­ons work in the back­ground. Other opera­tio­nal foun­da­ti­ons with their own manage­ment teams are more visi­ble. They have a website and are public-facing. Others still are mana­ged by trust offices. As a rule, they are less visi­bly invol­ved, but they are just as crucial for us – they give us weight when it comes to imple­men­ting good frame­work condi­ti­ons. And, of course, these foun­da­ti­ons also play a key role in funding our association.

Which issues are at the top of the agenda right now for your members?

KS: We asked about this in a survey this May. Digi­ta­li­sa­tion in foun­da­ti­ons’ day-to-day opera­ti­ons is at the top of the list, parti­cu­larly in funding manage­ment. Issues surroun­ding impact measu­re­ment and project evalua­tion are also important. Many foun­da­ti­ons want to see how others approach things and deve­lop new stan­dards toge­ther. Regu­la­tion and compli­ance are also at the top of the list. After all, pres­sure is growing here in Liech­ten­stein, too. Colla­bo­ra­tion – whether with other foun­da­ti­ons or across sectors – is another big issue. And, of course, socie­tal chal­lenges are also reflec­ted, such as the conse­quen­ces of climate change or the pres­sure on our democracy.

Dialo­gue and networ­king seem to be important?

DBN: Yes, that’s right. The inte­rest in networ­king is an important reason for a VLGST member­ship. Since the asso­cia­tion was foun­ded, a real phil­an­thro­pic commu­nity has deve­lo­ped in Liech­ten­stein. Close proxi­mity is an advan­tage; people know each other and can easily exch­ange ideas. The network is parti­cu­larly valuable for new foundations.

Many foun­da­ti­ons – about a third – state on their website that they do not accept funding applications.

DBN: This usually has to do with how they came about. Many foun­da­ti­ons were origi­nally private, and only became nonpro­fit later – often after the death of their foun­der. Some also have a fixed group of bene­fi­ci­a­ries in their artic­les of asso­cia­tion. For them, it makes little sense to be public-facing or accept appli­ca­ti­ons. At the same time, many want to avoid an influx of enqui­ries. They choose their projects selectively.

How do you handle this?

DBN:  With our website onboar­ding, our member foun­da­ti­ons can choose for them­sel­ves how they want to appear. They can specify there that they do not accept appli­ca­ti­ons and prefer to actively select projects. This makes it visi­ble that the foun­da­tion exists and commu­ni­ca­tion is clearly regulated.

How do funding part­ner­ships come about?

KS: Rela­ti­onships are frequently formed through colla­bo­ra­ti­ons, funding alli­ances or even through appli­ca­ti­ons, if they are addres­sed speci­fi­cally. Bulk enqui­ries or form letters are an abso­lute no-go. In prin­ci­ple, foun­da­ti­ons like to main­tain long-term, perso­nal rela­ti­onships charac­te­ri­sed by trust and open commu­ni­ca­tion. For instance, many foun­da­ti­ons consciously refer to their bene­fi­ci­a­ries as part­ners; they don’t see them as ‘just reci­pi­ents’ of funding.

What role do foun­da­ti­ons see for them­sel­ves in this?

KS: They see them­sel­ves more and more as capa­city buil­ders. This means that foun­da­ti­ons support part­ner orga­ni­sa­ti­ons not only with indi­vi­dual projects, but also in estab­li­shing and deve­lo­ping the whole setup.

How important is trans­pa­rency in this process?

DBN: Very important. As an asso­cia­tion, we encou­rage foun­da­ti­ons to commu­ni­cate their funding crite­ria clearly. This lets appli­cants know what is expec­ted – so they can tailor their submis­sion. We under­stand both sides: While many foun­da­ti­ons are not visi­ble via a website or an email address, this remains diffi­cult. That’s why we’re pushing things forward with digi­ta­li­sa­tion – to make commu­ni­ca­tion and colla­bo­ra­tion easier and more effi­ci­ent for both sides.

What role does your asso­cia­tion play beyond the foun­da­tion sector?

KS: Networ­king is our core mission – not just among foun­da­ti­ons, but also with poli­ti­ci­ans and busi­ness. We are invol­ved in public-private part­ner­ships and have crea­ted an annual forum aimed at poli­ti­cian, busi­ness and the gene­ral public in the shape of our Phil­an­thro­pie-Platt­form. This is where we show the contri­bu­tion chari­ta­ble foun­da­ti­ons make to society.

So does VLGST also do advocacy?

DBN: Yes, we do a bit. Our presi­dent attends the monthly meetings between finan­cial market stake­hol­ders and the govern­ment – along­side the presi­dents of the Insti­tute of Profes­sio­nal Trus­tees and Fidu­cia­ries, the Bankers Asso­cia­tion and the Cham­ber of Commerce and Indus­try. It also deals with current regu­la­tory issues that make their way to Parlia­ment. We are also invol­ved in the consul­ta­tion process and give our opinion on issues for chari­ta­ble foundations. 

KS: Another high­light is our annual meeting with the autho­ri­ties. This is an exclu­sive oppor­tu­nity for our members to meet with the heads of the Foun­da­tion Super­vi­sory Autho­rity, Office of Justice, Tax Admi­nis­tra­tion, Finan­cial Market Super­vi­sory Autho­rity and Minis­try. This kind of direct forum is hardly possi­ble in bigger count­ries – our members greatly appre­ciate this added value.

Is there a speci­fic project or initiative?

DBN: Finance Against Slavery and Traf­fi­cking (FAST) is a good exam­ple. It is a public-private part­ner­ship that was laun­ched in 2018 as part of the United Nati­ons 2030 Agenda. The aim of the initia­tive is to actively involve the global finan­cial sector in the fight against human traf­fi­cking and modern forms of slavery. This inno­va­tive approach combi­nes poli­ti­cal enga­ge­ment with finan­cial sector exper­tise, making FAST a flag­ship project for the Sustainable Deve­lo­p­ment Goals (SDGs).

To what extent do you feel public pres­sure in terms of trans­pa­rency or the poli­ti­cal commit­ment of foundations?

DBN: I don’t really feel it. Of course, there are orga­ni­sa­ti­ons that speak out on their issues on the poli­ti­cal level – this may not be equally well recei­ved ever­y­where. But the pres­sure on civil society we have seen in our neigh­bou­ring count­ries has yet to make its presence felt in Liech­ten­stein. Instead, the desire for grea­ter trans­pa­rency often comes from the civil sector itself: NGOs and asso­cia­ti­ons complain about how hard it is to find the right foun­da­ti­ons and gain access to them. 

KS: I don’t really perceive any public pres­sure either. On the contrary: Society has a very posi­tive view of the phil­an­thro­pic sector. In culture and sport, for instance, chari­ta­ble foun­da­ti­ons are always present and take on a lot of respon­si­bi­lity. This has a posi­tive impact in the public sphere. The real pres­sure comes from else­where: We are part of the Euro­pean Econo­mic Area (EEA) and adopt regu­la­ti­ons from the EU. Right now, for instance, in the area of money laun­de­ring regu­la­ti­ons. This is where regu­la­tory pres­sure arises, inclu­ding in terms of trans­pa­rency for foundations.

In Liech­ten­stein, the prin­cely family has close links to the coun­try. Does it also play a special role in the phil­an­thro­pic sector?

DBN: The prin­cely family has long been invol­ved in phil­an­thropy. For instance, the Liech­ten­stein Red Cross was foun­ded 80 years ago on the initia­tive of Prin­cess Gina. It is still presi­ded over by H.R.H. Heredi­tary Prin­cess Sophie of Liech­ten­stein. She is also active with her own foun­da­tion and advo­ca­tes for pregnancy coun­sel­ling and educa­tio­nal oppor­tu­ni­ties for young people. Initia­ti­ves like these are key drivers of momen­tum that show commit­ment comes from perso­nal convic­tion. H.S.H. Prince Max of Liech­ten­stein is the initia­tor of the foun­da­tion Lebens­wer­tes Liech­ten­stein. This brings toge­ther various chari­ta­ble foun­da­ti­ons in the coun­try to tackle issues such as social cohe­sion, energy, resour­ces, nutri­tion and mobi­lity. The family also has a global presence – through the LGT Venture Phil­an­thropy Foun­da­tion, for instance, which is also presi­ded over by H.S.H. Prince Max of Liechtenstein.

Liech­ten­stein is also conside­red an attrac­tive desti­na­tion for foun­da­ti­ons world­wide. Why is that?

KS: This is prima­rily down to foun­da­tion law. It is one of the most flexi­ble in the world and was over­hau­led in 2009. A key advan­tage is that there are no geogra­phi­cal rest­ric­tions: Foun­da­ti­ons do not neces­s­a­rily have to distri­bute part of their funds dome­sti­cally, but can provide funding inter­na­tio­nally. In addi­tion, foun­ders are free to deter­mine the purpose and struc­ture of the foundation. 

What other factors give Liech­ten­stein its appeal?

DBN: Poli­ti­cal stabi­lity, a sound fiscal policy with high govern­ment reser­ves and legal certainty are key advan­ta­ges as a loca­tion. Then there’s the infra­struc­ture: We have a strong finan­cial and fidu­ciary sector with access to quality services, but at the same time we also have a strong indus­try. This combi­na­tion makes it an attrac­tive destination.

Some still asso­ciate Liech­ten­stein with a lack of trans­pa­rency or regu­la­tory defi­ci­en­cies. What impact does that have today?

KS: Due to its member­ship of the Euro­pean Econo­mic Area (EEA), Liech­ten­stein fully imple­ments Euro­pean regu­la­ti­ons. In the last Money­val Assess­ment, the foun­da­tion sector perfor­med very well, parti­cu­larly in terms of stan­dards for the preven­tion of money laun­de­ring and terro­rist finan­cing. Of course, there is still room for impro­ve­ment. We expect that the next revi­sion of foun­da­tion law will streng­then super­vi­sion and ensure grea­ter trans­pa­rency for data. Chari­ta­ble foun­da­ti­ons are listed in the commer­cial regis­ter and visi­ble on plat­forms such as fundraiso.ch, but there are no binding statis­tics. As an asso­cia­tion, we are commit­ted to crea­ting more visi­bi­lity. If Liech­ten­stein is reco­g­nised as a leading desti­na­tion for phil­an­thropy, it should also be clear what impact foun­da­ti­ons are having.

How do you deal with the issue? Are guide­lines requi­red from the super­vi­sory authorities?

DBN: We have long relied on encou­ra­ge­ment and volun­t­ary action. We’re looking at figu­res from indi­vi­dual foun­da­ti­ons, but rather at aggre­ga­ted data. We want to be able to commu­ni­cate about the sector as a whole: Which areas of funding do foun­da­ti­ons work in? Do they operate on a regio­nal or global level? And so on.

KS: We coll­ect some infor­ma­tion from our members, but that is not enough to provide meaningful data. That’s why we’re looking for ways to improve the data situa­tion systemically.

Would foun­da­ti­ons accept that?

KS: We have been in conver­sa­tion with our members and the autho­ri­ties for some time now. Our aim is to find a prac­ti­cal solu­tion with as little addi­tio­nal effort as possi­ble, which could be imple­men­ted as part of the ongo­ing deve­lo­p­ment of foun­da­tion law.

There is alre­ady data in Switz­er­land – for instance, at Swiss­Foun­da­ti­ons, where members have to declare dividends.

KS: Exactly. Binding figu­res are available there because the member­ship fees are based on them. With us, ever­yone pays the same amount, regard­less of how much funding they get – but with the option to increase on a volun­t­ary basis. That’s why we only have estimates.

How do you see the deve­lo­p­ment of the sector in ten years?

DBN: I’m expec­ting a new gene­ra­tion of donors who want to make a diffe­rence while they’re still alive. Trans­pa­rency and colla­bo­ra­tion will increase. Impact inves­t­ing will also become more and more important, as will back­ing social enterprises.

KS: The number of chari­ta­ble foun­da­ti­ons will conti­nue to grow. And their importance will grow, too. Foun­da­ti­ons are also beco­ming even more vital in light of geopo­li­ti­cal chal­lenges. Inter­na­tio­nal coope­ra­tion and cross-secto­ral part­ner­ships are beco­ming indispensable.

DBN: We want Liech­ten­stein to assert itself as a leading desti­na­tion for phil­an­thropy – inclu­ding in dialo­gue with Switz­er­land and our other neigh­bou­ring count­ries, where deve­lo­p­ments are very dynamic.

What are the key issues here?

DBN: Tradi­tio­nal foun­da­ti­ons work in their area of funding for the long term and are less respon­sive to trends. But cross-cutting issues such as climate, demo­cracy and inequa­lity affect ever­yone and are beco­ming more important. 

KS: That also goes for biodi­ver­sity, food secu­rity and social cohe­sion. Some foun­da­ti­ons have their hands tied a bit more by their artic­les of asso­cia­tion, while others have more leeway. But over­all, these socie­tal chal­lenges are beco­ming more important for foundations.