How Enterprise Foundations Can Sustain Sustainability: The European Relevance of a Nordic Ownership Model

In this chapter, we argue that foundations have a huge untapped potential to contribute to addressing the great social challenges of our time. Foundations in effect are private providers of public goods and therefore combine private sector initiative with social purpose. However, realizing this potential requires freeing foundations from some of the canonical limitations of contemporary foundation law, in particular the strict separation between philanthropy and business, which authorities in many countries zealously enforce. Allowing enterprise foundations (foundation ownership of business companies) as the majority of Nordic countries do will enable foundations to exercise benevolent long-term ownership of business companies while contributing a steady source of funding for sustainable development through donations and operating philanthropy. We outline the regulation necessary to make the structure work, including a central foundation regulator operating at arms’ length distance to the political system, full disclosure of philanthropy and ownership ties, audited accounts and good governance including independent boards.