The foundation and the endowment fund are the four principal French legal vehicles for perpetuating an art collection beyond the private sphere: the public-interest foundation (law of 23 July 1987), the sheltered foundation, the corporate foundation (law of 23 July 1990) and the endowment fund (LME law of 4 August 2008). The choice depends on the philanthropic objective, the scope of activity, the statutory flexibility sought and the interplay between France and Switzerland for cross-border estates.
Too many philanthropic projects fail through a poor initial choice: a foundation that is too heavy for a project still taking shape, an under-funded endowment fund that struggles to operate, a sheltered foundation that dilutes the family name. The structure is not a technical detail: it shapes governance over 30 years, the founder's taxation, the capacity to receive gifts and bequests, and the brand image.
Each architecture has its own logic: the public-interest foundation is the standard for lasting projects with broad reach (initial capital 1.5 M€, approval by the Conseil d'État, prefectural oversight); the sheltered foundation under a host foundation is more flexible and quicker; the corporate foundation answers a corporate patronage project over 5 renewable years; the endowment fund is the most flexible tool, created by a simple declaration to the prefecture, with no minimum capital (except 15,000 € for a fund not endowed at inception).
The firm builds the appropriate structure, including within a France–Switzerland logic, and supports its implementation, its governance and the coordination with individual and corporate patronage.
The reference standard for a large-scale and lasting philanthropic project.
A foundation without its own legal personality, hosted by a host foundation (e.g. Fondation de France).
A tool dedicated to corporate patronage over a multi-year programme.
The most flexible tool, created by declaration to the prefecture, without approval or minimum capital (15,000 € if not endowed at inception).
Our dual France · Switzerland bar admission allows us to compare the legal vehicles on each side of the border and to choose the best-suited architecture, or even to combine two structures (one French and one Swiss) when the estate and the beneficiaries are cross-border.
Governed by art. 80 et seq. of the Swiss Civil Code. Created by public deed, no minimum capital (50,000 CHF recommended), federal or cantonal supervision. Widely used for international estates; strong international recognition (notably in Liechtenstein, Luxembourg and Belgium).
A combined architecture: a French endowment fund for projects in France (museums, exhibitions, grants) and a Swiss foundation for the conservation of the works and international governance. It allows taxation to be optimised in each jurisdiction.
French tax reduction: 66% of the gift within the limit of 20% of taxable income (French Tax Code art. 200). In Switzerland, deduction of the gift within cantonal limits (5 to 20% of taxable income depending on the canton). Coordination is possible for mixed tax residents.
Crucial to anticipate: where do the assets go on dissolution? The Swiss foundation allows contractual flexibility; the French endowment fund requires the transfer to another structure pursuing a similar purpose (LME 2008 law).
We regularly create endowment funds and foundations for collectors, families, artists and companies wishing to perpetuate an artistic heritage or a philanthropic project. This operational practice gives us a precise reading of the pitfalls: by-laws that are too rigid, unbalanced governance, under-funding, incomplete tax coordination, conflicts with heirs.
The firm also runs its own endowment fund, the Fonds de dotation Bensaid Avocats, which supports projects of general interest. This internal experience gives us an operational understanding of a fund's daily running: reporting, governance, relations with beneficiaries, annual tax compliance, coordination with the statutory auditors.
Our dual France · Switzerland bar admission allows us to offer a full range of solutions according to the situation: a classic French foundation, an endowment fund, a sheltered foundation, an autonomous Swiss structure or a combined FR/CH architecture. We coordinate with notaries, statutory auditors, wealth managers and supervisory authorities.
The endowment fund is generally preferable for family, wealth or emerging projects: statutory flexibility, quick creation (a few weeks), no minimum capital (except 15,000 € if not endowed at inception), fully controlled governance. The public-interest foundation is favoured for projects of public scale, over the very long term, that justify approval by the Conseil d'État. For a family collection intended to pass to future generations: an endowment fund in 80% of cases.
For an individual: an income tax reduction of 66% of the gift within the limit of 20% of taxable income (French Tax Code art. 200). Beyond that, carry-forward over 5 years. A reduction of the wealth tax (IFI) is possible up to 75% under certain conditions (French Tax Code art. 978). For a company: a corporate tax reduction of 60% of the gift within the limit of 0.5% of turnover (French Tax Code art. 238 bis). Contribution of a work of art: valued at market value, subject to expert appraisal.
Yes, unless the by-laws provide otherwise. The sale of a work included in the initial endowment may be restricted by the by-laws (inalienability clause). The sale of a work acquired by the fund with its own resources is unrestricted, subject to compliance with the statutory purpose. Any sale must be the subject of a board decision and rigorous accounting traceability.
A board of at least 3 members (LME 2008 law). The by-laws are entirely free: one may provide for a family college, an independent experts college, a beneficiaries college, quorum, majority and co-optation rules. The chair may rotate or be hereditary. The by-laws must anticipate family conflicts over 30 to 50 years.
Creation: 5,000 to 15,000 € (lawyer, notary, by-laws, declaration). Annual operation: 10,000 to 50,000 € depending on activity volume (statutory auditors mandatory if resources exceed 10,000 €/year, accounting services, governance costs, communication). An initial endowment of 500,000 € to 1 M€ is recommended to ensure operational viability.
The LME law (2008) requires the transfer of the assets to another structure pursuing a similar purpose (another fund, foundation, or public-interest association). The by-laws designate the beneficiary structure or the designation mechanism. The assets never revert to the founders or heirs. This rule is fundamental and shapes the choice between an endowment fund and alternative structures (a Swiss foundation, for example).
Five recurring mistakes: (1) initial under-funding (a fund without operating capital cannot finance its missions and falls dormant); (2) by-laws that are too rigid, preventing adaptation to family or regulatory changes over 30 years; (3) unbalanced governance between family and independent third parties (risk of challenge by the supervisory authorities); (4) confusion between philanthropic purpose and wealth management (a fund is not a pure tax-avoidance vehicle); (5) the absence of a communication and reporting plan (an invisible fund raises neither gifts nor partnerships).
Three architectures frequently used by cross-border estates: (a) a French foundation for the activity in France (museum, exhibitions, grants) plus a Swiss foundation for conservation internationally and family governance; (b) a French endowment fund backed by a Swiss foundation in which the collection remains held; (c) a Liechtenstein foundation for complex estates (enhanced privacy, but mandatory tax transparency towards French tax residents, with reporting to the French tax authorities). Our dual Paris & Geneva bar admission allows us to structure these architectures directly.
Yes, under conditions. On a contribution in full ownership, personal use becomes impossible (except for a loan formalised by agreement with consideration). On a contribution with split ownership (bare ownership to the fund, usufruct retained), the founder may keep the enjoyment until death, a frequent solution for collectors wishing to display works at home while securing the transfer. Note: the patronage tax reduction is due only on the value of the bare ownership (French Tax Code art. 200 bis), not on the total market value.
All the resources of the Art & Fiducie practice to structure a lasting strategy.
An overview of the practice.
Voir la page Firm initiativeOur endowment fund and its work.
Voir la page ClusterCoordinating the foundation with the succession strategy.
Voir la page ClusterSettling duties by handing over a work of art.
Voir la pageA confidential first exchange: comparison of the possible architectures, tax simulation, creation timetable.
© BENSAID Avocats — The information on this site does not constitute legal advice and cannot replace a personalised tax analysis.