Comparative (corporate) governance for nonprofit organizations: an emerging research area

Nonprofit organizations have long been regarded as the “neglected stepchildren” in the shadow of their for-profit counterparts. This situation is changing both in the US and in Europe: the economic importance of the nonprofit sector is already impressive and is still rapidly growing, as demonstrated by the results of the empirical comparative studies of the Johns-Hopkins Comparative Non-Profit Sector Project of the Johns-Hopkins University in Baltimore. For the foundation sector this is true as well, particularly in Europe, and transnational activities of foundations are increasing more and more, as an empirical study from winter 2008 shows. The foundation sector in the European Union countries may be even larger than in the US.

Yet the law has not keep abreast with this development, certainly not in Europe. Foundation law in particular has remained one of the most national-minded law areas in Europe. This is mostly because of national tax law, which is loath to grant any tax benefits to non-residential institutions; however, it is also because of very different traditions relating to foundations. These embedded approaches range from a very rigid attitude – for example, in France – to a marked liberalism – to be found, for example, in the Netherlands and Austria – and even to the nearly full laissez-faire of Liechtenstein, which, as the self-appointed foundation paradise, has met severe international problems, as evidenced recently by the German–Liechtenstein tax evasion diplomatic controversy in 2008.