FAQ Advisors

The Fondation de Luxembourg was set up to provide philanthropic expertise to all the banks established in the financial centre, and also more generally to family offices, notaries, attorneys and tax experts whose clients wish to make a philanthropic commitment. It is there to accompany, on a basis of complete neutrality, any person wishing to implement projects of some size in the general interest.

Because of the relationship of trust which it maintains with its clients, every bank in the financial centre is an important partner of the Foundation.

In that case, the best solution is to contact us directly in order to discuss the project and decide how to take the matter forward. Depending on the degree of progress made by your client in the definition of his wishes, we will then be able to envisage a meeting at an early date and work together to set up a sheltered foundation. As the Relationship Manager, you will be involved throughout the process. Your knowledge and understanding of your client’s situation are in fact essential elements to build the project serenely and effectively.

When the agreement setting up the Sheltered Foundation is ready to be signed, the Fondation de Luxembourg will open with you (unless of course the client stipulates a different wish) an account in the name of the Fondation de Luxembourg/Sheltered Foundation ABC to which the assets that the founder wishes to make available for his project will be transferred.

The Founder chooses the bank and the manager who will be responsible for safekeeping and management of the funds of the sheltered foundation. In the immense majority of cases, this will be the bank with which the founder already has a relationship of trust for the conduct of his own business or management of his assets.

The Fondation de Luxembourg will then open the account of the sheltered foundation at this bank and delegate management of the assets to it.

The Founder has a choice of two solutions:

• To adopt the same management policy as applied to the Fondation de Luxembourg’s own resources and approved by its Board of Directors.

• Or to reach his own decision on the allocation of the assets of his sheltered foundation. 

The second solution is generally preferred as it lends itself to both advisory management and discretionary management.

Philanthropic commitments are generally made with a very long time horizon. The Fondation de Luxembourg therefore recommends conservative management.

However, the Fondation de Luxembourg adopts a pragmatic approach and does not wish to impose excessive constrains on the management of the assets of sheltered foundations. Nevertheless, the two following parameters must be taken in account:

• The degree of risk of the management must be appropriate to the objectives of the sheltered foundation: for example, if the objective of the Sheltered Foundation is to pursue its activities indefinitely, it will be essential to make sure that the management policy does indeed seek to safeguard the assets.

• Moreover, the Fondation de Luxembourg encourages the founders to request management that is compatible with the SRI (Socially Responsible Investment) policy of the Fondation de Luxembourg. This takes into account social and environmental aspects, governance and sustainable development of the investment values. It also seeks to encourage ventures which show a societal commitment on these matters (best in class approach). The SRI policy of the Foundation seeks to maintain cohesion between the objectives of the sheltered foundations and the investments made by them.