A Sheltered Foundation has no legal personality. By definition, it adopts the legal personality of the Fondation de Luxembourg. In practice, this involves the following procedure:

• A Sheltered Foundation is established through the signing of a contract between the donor and the Fondation de Luxembourg. This contract represents the statutes of the foundation. It covers the purpose, the name and the duration of the foundation as well as the amount to be donated and the role of the Fondation de Luxembourg.
• Before signing the agreement, a separate bank account is opened at the bank of choice of the founder. It should be noted that the Fondation de Luxembourg complies with Know Your Customer (KYC) regulation and, as a rule, may only accept a direct transfer of funds if it is transferred from a bank with activities in the EU/EEA area and therefore subject to EU anti-money laundering regulations.
• Prior to the creation of the sheltered foundation, the founder will be asked to sign a conformity letter assuring that all relevant legal and regulatory obligations have been complied with in relation to the funds that will be donated. 
• The Founder transfers his donation to the designated account held by the Fondation de Luxembourg. 
• Once the foundation has been created, a Management Committee (equivalent to a Board of Directors) is set up. This Committee consists of the founder (possibly several persons in the case of a corporate foundation) who will be assisted and advised in decisions relating to the management of his foundation by a representative of the Fondation de Luxembourg and at least one independent member, generally an expert in the particular activity area of the Sheltered Foundation.
• This Management Committee validates the decisions related to the management, investment policy and projects to be supported by the Sheltered Foundation.
• The assets of the Sheltered Foundation are retained and managed by a bank of the donor’s choice.
• The donor may at any time call upon the expertise of the Fondation de Luxembourg for advice about his foundation.
• The Fondation de Luxembourg can provide media and marketing services for the Sheltered Foundation.
• It may also call upon experts in the sector supported by the Sheltered Foundation who may exchange views with the founder and help to optimize his approach to the supported projects.

For an individual wishing to pursue philanthropic aspirations, the commitment chosen may be of different kinds. The Fondation de Luxembourg meets the expectations of its clients through a customised approach offering the same flexibility as the creation of a public benefit foundation, but without the legal and administrative constraints associated with the setting up of a structure of this type.

For instance, a donor may adopt a range of different approaches:

• Creation of a Sheltered Foundation in the donor’s lifetime by investing in projects in which he is personally involved and drawing on his own expertise and vision.
• Creation of a Sheltered Foundation which is destined to outlast the donor by making a legacy. The Fondation de Luxembourg will be responsible for the life of the Sheltered Foundation and for the evolution of its Management Committee in line with the founder’s own wishes.
• "Duo" legacy: in some cases of inheritances passed on to persons who have no relationship with the deceased, it may be advantageous to envisage a philanthropic side to the testamentary dispositions by arranging for a Sheltered Foundation to settle the legatee’s estate duties. The difference between the estate duty rates applied to foundations and individuals who do not belong to the family of the deceased enables a proportion of the inheritance to be set aside for philanthropic purposes without, however, penalising the legatee.

The possibilities are as varied as the needs and aspirations of the Founders.

For companies wishing to make a commitment to an area of public interest, the Fondation de Luxembourg can often provide the expertise enabling them to structure their approach in the most effective possible manner, while at the same time minimising the use of internal resources:

• The company may create a turnover foundation or an endowment foundation under the aegis of the Fondation de Luxembourg.  Often, companies will prefer the turnover foundation. Note: The minimum commitment period is three years.
• The Fondation de Luxembourg may define and arrange call for projects addressed to NGOs and associations on the basis of detailed specifications drawn up with the company.
• The Fondation de Luxembourg may, on request, organize events or communication campaigns about the particular action.
• Throughout the lifetime of its foundation, the company will benefit from the expertise and support of the Fondation de Luxembourg in taking decisions and managing the approach on a day to day basis