By Intercontinental Trust Ltd
The trend of setting up foundations focused on Africa reflects a growing recognition of the continent’s potential and the importance of investing in its people, communities, and future development.
As McKinsey & Co notes, with a population that is expected to nearly double to 2.5 billion by 2050, Africa presents vast opportunities for robust, inclusive growth that taps into its rich natural resources and even richer youth demographic dividend to propel prosperity and progress not just in the continent but all around the world.
While Corporate Social Responsibility (CSR) and philanthropy have been practiced by corporations for decades, the scale, scope, and strategic integration of these initiatives has evolved over time. In Africa, the growing prominence of CSR reflects both global trends and the continent’s unique socio-economic challenges and opportunities. As corporations continue to prioritise sustainability and social impact, CSR and philanthropy are likely to remain integral components of corporate strategy for the foreseeable future.
Against this backdrop, let us take a deep dive into the reasons impelling big companies to set up foundations, and how Mauritius is helping structure these vehicles for impact in the Hopeful Continent.
A win-win solution: Why foundations are increasingly a vehicle of choice for impact
Establishing foundations has become increasingly popular in recent years among big companies in Mauritius, Africa and around the world, for various reasons:
- Philanthropy and Social Impact: Foundations provide a structured and sustainable approach to philanthropy, allowing donors to support causes they are passionate about and leave a lasting impact.
- CSR: Establishing a foundation allows businesses to formalise philanthropic efforts, enhance brand reputation, and showcase alignment with values and mission.
- Increased Employee Engagement: Involving employees in foundation activities, such as volunteering or fundraising events, helps foster a sense of purpose and pride in their workplace.
- Attraction and Retention of Talent: Many individuals, particularly millennials and Gen Z, prioritise working for companies that align with their values and contribute to social good.
- Stakeholder Relationships: A foundation provides a platform for engaging with various stakeholders, including customers, partners, local communities, and government agencies.
- Innovation and Differentiation: A foundation can drive innovation by investing in projects and initiatives that address emerging social or environmental challenges.
- Positive Impact on Society: The most significant advantage, however, is the tangible impact that corporate social actions can have on society, whether it’s supporting education, environmental conservation, healthcare, or poverty alleviation.
Indeed, several large corporations have established foundations to address social, economic, and environmental challenges in Africa. While the scale and scope of these initiatives may vary, they play a crucial role in driving positive change and contributing to sustainable development across the continent.
The Mauritian Foundation: How it helps individuals/companies to meet their philanthropic goals
With an eye to supporting companies on wealth management, asset protection, succession planning and charitable initiatives, the Foundations Act was passed by the Mauritian Parliament on the 5th of June 2012, allowing for the setting-up of Private Foundations in Mauritius.
In Mauritius, a Foundation must be set up under the Foundations Act 2012 and must have a Charter and Article(s) to govern it. The objects and purposes of the Mauritius foundation may be charitable, non-charitable or both. Needless to say, these objects and purposes should comply with the Laws of Mauritius.
As key benefits of a foundation, once founders endow their assets in the structure, the assets are protected and preserved against situations such as bankruptcy, marriage, divorce, or insolvency. The Mauritian foundation has no timeline so it can be set up as a dynastic private wealth structure and can continue the family legacy for many generations. Finally, the Foundation Act also contains firewall provisions aimed at preventing a foundation from being attacked on the basis of succession rights or forced heirship rules.
All these aspects also make foundations an ideal structure for meeting charitable or philanthropic goals. Indeed, Mauritius foundations are the perfect way for high-net-worth individuals (HNWIs) and businesses to create lasting legacies. The most significant aspect of the foundation is the ability to exercise agency and participate in its operations, which enables founders to remain closely involved with their charitable interests. On the other hand, trusts make it legally binding for settlors to hand over control of their assets. Moreover, foundations impose no restriction on the number of members that can be appointed to their council, hence founders may consider nominating representatives of significant donors to the board. This gives key donors a say in how their donations are utilised and allows the foundation to run its charitable endeavours in a more democratic manner.
A continent awaits: Doing well by doing good
At ITL, we have various clients within our portfolio, with foundations focusing on Africa and Mauritius. In a world filled with challenges, the role of foundations, both charitable and non-charitable, stands paramount. These organisations serve as beacons of hope, driving positive change in communities worldwide. We take pride in our mission to support and empower these foundations in their noble endeavours.
Through our dedicated team at ITL, our journey began with a simple yet profound vision: to streamline the setup and administration processes for foundations, allowing our clients to focus more on their impactful missions and less on bureaucratic hurdles. Whether it’s establishing a new foundation or managing the operations of an existing one, we provide comprehensive solutions tailored to meet your unique needs.
The trend towards setting up foundations underscores a growing recognition of the importance of philanthropy, strategic wealth management, and social responsibility in today’s society. Be it motivated by a desire to leave a lasting legacy, protect your assets, or support charitable endeavours, we can assist in setting up your foundation in Mauritius, with an eye to the emerging continent.
If you’re ready to embark on this journey, contact ITL to learn more about our services and how we can support your foundation’s mission. Together, let’s make a difference that lasts a lifetime!
