Switzerland as a bastion of philanthropic strength

In a world of geopolitical tensions, the premium on peace is on the rise. Amid this uncertain landscape, charitable foundations, non-profit organizations and endowment funds are seeking Switzerland out for its  supportive and stable regulatory environment, strong wealth management industry and established non-profit ecosystem.

Switzerland has long drawn global fortunes in search of safety. Increasingly, its attractiveness for philanthropic organizations has become stronger than ever. As wealthy families reassess where they live and hold their assets, many are also reconsidering where their philanthropic structures should reside. They are finding that the jurisdiction that best protects private wealth can also be the smartest home for charitable capital.

The story of global mobility is familiar: ultra-high-net-worth families move in response to geopolitics, tax and social instability. A more recent, but less noticed, phenomena is that their philanthropy is moving too. Today we are seeing ever more philanthropists – from places such as the United States, the Middle East and Eastern Europe – looking beyond their borders to anchor their charitable structures.

As these families look for jurisdictions that are stable, predictable, well-regulated and professionally governed, Switzerland—and increasingly Singapore—fit that description. One international client recently said he chose Switzerland to be the new home for his foundation because ‘In der Ruhe liegt die Kraft’ – strength lies in peace.

Switzerland is often referred to as the “Stiftungsland,” or the land of foundations and where once it was perhaps seen as a private, closed and traditional ecosystem, today it is a vibrant, collaborative, innovative bustling hub of activity. Indeed, Switzerland hosts more charitable entities per capita than any other country in the world and the sophistication level of these foundations is blossoming. This is another reason why Switzerland’s Stiftungsland status is accelerating.

As part of this increased sophistication and professionalisation, foundations boards are increasingly asking us how to ensure that their  assets (collectively estimated to be over CHF 150 billion in Switzerland) are managed in a responsible, sustainable and mission aligned manner. They are also seeking guidance and support on how to navigate the impact world design strategies that are effective and efficient, find the right partners and have access to the right interdisciplinary experts.

Few philanthropists have the time—or the appetite—to manage these responsibilities alone, so they are increasingly seeking institutional partners who can integrate philanthropic strategy, endowment management, wealth planning and impact expertise into a coherent framework. This is where the right guidance in the right jurisdiction matters.

We at Pictet are on the same journey. When the seven managing partners of the firm collaborated to establish the Pictet Group Foundation, they realised the value of philanthropic consultants and expert guidance. This experience led them to establish Pictet Philanthropy Services to offer clients the same level of trusted support across the spectrum of their needs.

Within this architecture, we know, as every philanthropist should, both our strengths and our limits. Our approach is to assemble, case by case, the appropriate blend of philanthropy and impact specialists, endowment managers and legal experts alongside an extensive global network of external expertise. This approach ensures that we build truly holistic solutions for our foundation and philanthropic clients.

In a world where geopolitical uncertainty, tensions and government spending cuts have become daily news, where social and environmental challenges are more pronounced than ever before, philanthropists, foundations and non-governmental organisations around the world are struggling to take up the slack.

However, from our perspective, from the conversations we are having with our foundation and philanthropic clients alongside our partners in the legal and impact worlds, we believe that Switzerland will increasingly play an ever-important role, not just in housing philanthropic capital, but also in managing it, connecting it and professionalising it to ever-greater effect.

The message to philanthropists and boards is simple: if you are doing what you have always done, you will achieve what you have always achieved. If you are serious about driving positive change, ask whether your current strategy, structure, jurisdiction and advisors are fit for purpose. If not, change is easier than you think.