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Banque de Luxembourg: Promoting Philanthropy in Luxembourg

Case Overview

FSG was hired to help catalyze a process of promoting and developing philanthropy in Luxembourg.

The Challenge

Luxembourg – a small, wealthy country in the middle of Western Europe – traditionally had only two agents of social change: the church and the state. Luxembourg had not changed its legal framework for philanthropy since 1928, despite the fact that across Europe other countries were improving the tax benefits of giving. The philanthropic landscape was sparse, with the Catholic Church orchestrating much of the private philanthropy that did exist. Available data suggested that philanthropy in Luxembourg had strong potential for growth, and FSG was challenged with determining how to unleash that potential.

Approach & Solutions

FSG conducted interviews with experts in philanthropy and analyzed secondary research reports to determine the key factors that influence philanthropy: donors’ motivation, the ease with which a potential donor could take action, and the existence of capable, effective and accountable beneficiaries.

Using this framework, FSG held focus groups to identify priority areas for action, and recommended three to prioritize:

  • Tax and legal changes: Amendments to the fiscal and legal framework governing philanthropy in order to simplify procedures and improve tax incentives
  • Development of supporting infrastructure: Putting in place services and support structures aimed at donors, potential donors and beneficiaries
  • Social marketing campaigns: Campaigns to raise awareness about social issues, the potential of philanthropy to address them, and ways of getting involved

FSG recommended that Luxembourg establish and develop a new intermediary that resembled a community foundation. This intermediary would have a professional staff and permanent board, and would be tasked with raising awareness about the legal changes needed in Luxembourg, and promoting giving across the country.

This recommendation was included in a white paper that was shared with senior people in the Luxembourg government, including the former Prime Minister of Luxembourg and the President of the European Union, who took the lead in presenting these ideas to the government. The white paper was presented at a national convention in Luxembourg which brought together leading European figures in philanthropy. At the convention, Prime Minister Junker announced the government’s intention to launch a package of legal initiatives aimed at promoting philanthropy, and the development of a “philanthropic council” to establish a national foundation to further encourage giving. This foundation was launched in 2009.

About Banque de Luxembourg

The Banque de Luxembourg is a leading private bank in the Grand Duchy of Luxembourg and a leading provider of philanthropic services in that market.

 

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