In addition to its role similar to that of the other founder members, the Association benefits from an overview of the Network and regional strategies, it is therefore able to play an advisory and coordinating role between other members, the Sheltered Foundation and the umbrella foundation.
As a member, and in the event of any incompatibilities relating to their articles of association and/or national regulations, the Association may represent and act as spokesperson or intermediary for certain members should they not be able to directly contribute to the Sheltered Foundation.
Allocation of the Association’s annual fees to the Foundation in 2021. Do the initial contributions of founder members to the Sheltered Foundation replace the annual fee paid to the Association? Why are payments made to the Foundation and not to the Association.
The initial contribution to the Sheltered Foundation does not replace the annual fee paid to the Association, which will continue. They are two distinct entities with complementary missions. This year alone, the Association is waiving the annual membership fee in favour of the contributions made to the Foundation by the various Network members.
Over and above allocation of the annual fees for budget year 2021, the annual fees will not be allocated to the Sheltered Foundation and shall remain the property of the Association whose role is to coordinate the Network (a different role from that of the Sheltered Foundation).
Regarding donations made to the Sheltered Foundation, these will not replace the annual fees payable to the Association under any circumstances. These are exceptional donations (“additional contribution”) to the Sheltered Foundation which do not concern the Association and are not subject to the same tax regime.
Under Article 6.2 of the Association’s articles of association, the membership process must comply with the terms set out in the Association’s articles of association and those of the Sheltered Foundation (as both are related), with those of the Sheltered Foundation requiring a membership application to be submitted by an institution to the President of the Foundation (who is Director General of the Institut Pasteur, as of right), who must present the application to the Management Committee of the Sheltered Foundation. The Management Committee decides on the application although if the institution, for ethical, moral, budgetary, statutory or other reasons, does not meet the conditions set out in the articles of association of the umbrella foundation, it is legally prevented from becoming a member of the Sheltered Foundation.
The creation of new structures by the Institut Pasteur is independent of the Sheltered Foundation and the Association, which only enjoy a right of information concerning the acceptance of any such new structures within the Network in accordance with their respective articles of association (membership terms of the Sheltered Foundation and of the Association).
It is possible to make earmarked donations to the Sheltered Foundation in order to support a project of a given institute of the Network. Donors wishing to make a specific donation to an institute of the Network are invited to do so by making the donation directly to the institute in question.
It is mandatory for the sheltered foundation’s scope of action to be related to the missions of its umbrella foundation as stated in its corporate object. The umbrella foundation and the sheltered foundation must share the same scope of action.
Article 3 of the founding agreement of the Sheltered Foundation stipulates that its objectives are to:
- Support the development of the Pasteur Network;
- Increase the resources available to the Pasteur Network, facilitate the mobilisation of funds and secure its management capacities;
- Enhance the visibility of Pasteur Network members as major operators on global health and medical research;
- Support the Pasteur Network in the tackling and preventing epidemics.
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.
A sheltered foundation does not have a legal personality. It is legally under the authority of its umbrella foundation, has its own governance and resources but, as only the umbrella foundation has a legal personality, it alone acts on behalf of the sheltered foundation in legal terms (by way of decisions taken by the Management Committee or executive committee). The relationship between the umbrella foundation and sheltered foundation is contractual. The contract or agreement specifies the articles of association of the latter and governs the relations, with the umbrella foundation, notably those of a financial nature. To this end, the umbrella foundation (Institut Pasteur), as it alone has legal personality, takes all action on behalf of the Sheltered Foundation by specifying in all documents “acting on behalf of the Pasteur Network Foundation, a sheltered foundation under the aegis of the Institut Pasteur”.
Although the Sheltered Foundation does not have any legal personality or tax status, this does not mean that it cannot have its own resources. On its founding, the umbrella foundation and the sheltered foundation agree on the allocation of property, rights and resources in order to achieve the contractually defined objectives, whereby such specific funds are maintained by the umbrella foundation in dedicated management accounts.
The Institut Pasteur and the founder members of the Sheltered Foundation will therefore contractually define, in an agreement specifying the articles of association of the Sheltered Foundation, the resources to be allocated to the Sheltered Foundation which the latter alone may exploit.
Once founded, the Sheltered Foundation may also receive funds in its own name for allocation to its activities. In this regard, donors may benefit by way of association from the tax benefits relating to the status of IP as an umbrella foundation when making bequests and donations to the Sheltered Foundation, in accordance with bilateral or EU tax agreements between the country of origin of the funds and France.
A sheltered foundation is a philanthropic entity operating under the aegis of another entity which exploits specific funds held in accounts maintained by the latter. In fact and in law, a sheltered foundation is treated as a flexible philanthropic means of achieving objectives defined contractually between it and the umbrella foundation, whereby the latter performs a supporting role for its sheltered foundation in the deployment of its philanthropic public-interest activities, also enabling the sheltered foundation to benefit from tax benefits due to its associative status.