The regime of sheltered foundation was established under the French law on developing patronage dated 23 July 1987, notably in Article 20 which stipulates: “the irrevocable allocation, for the purposes of implementing a public-interest and non-profit activity, of property, rights or resources to a foundation recognised to be of public interest, the articles of association of which have been approved in this regard, provided such property, rights and resources are managed directly by the allocating foundation, yet without the creation of any distinct legal personality.”

As the umbrella foundation is a recognised public-interest entity, the Sheltered Foundation benefits from the advantages of the patronage tax regime provided it does not deviate from performing works of a public-interest and non-profit nature.