Umbrella foundations and other alternatives to your own foundation

Read the PDF edition (2 pages)

Not every philanthropic project needs its own foundation. A separate foundation requires a board, accounts, an auditor, supervision and a tax exemption of its own, which is justified for large and long-term commitments but often too heavy for smaller amounts. Swiss umbrella foundations offer an alternative: a named fund within an existing, supervised and tax-exempt foundation, which can be set up quickly and at a fraction of the cost.

How an umbrella foundation works

An umbrella foundation is a charitable foundation whose purpose is broad enough to host several funds for different donors. The donor contributes assets to a fund that bears his or her name or a name of his or her choice, and defines the purpose of the fund within the purpose of the umbrella foundation. A fund committee, on which the donor usually sits, proposes the grants, and the umbrella foundation's board approves them and ensures compliance with the law and the tax exemption.

Advantages

A fund can be established within weeks and without a notarial deed. The donor benefits from the tax exemption of the umbrella foundation, so that donations are deductible from the start. Administration, accounting, audit and reporting to the supervisory authority are handled by the umbrella foundation, and the donor can concentrate on the philanthropic work. Many umbrella foundations also offer professional support in selecting projects and monitoring grants.

Limits

The donor does not control a legal entity of his own. The final decisions lie with the board of the umbrella foundation, which must ensure that each grant fits the overall purpose and the conditions of the tax exemption. Donors should therefore read the regulations of the umbrella foundation carefully, including the rules on fees, investment, the succession of the fund committee and the fate of the fund if the donor dies or wishes to leave.

Other alternatives

An association under Articles 60 et seq. of the Civil Code is suitable where several people want to pursue a purpose together and remain members with voting rights. It can also be tax-exempt. A direct donation or an endowed fund with an existing institution, such as a university or hospital, is the simplest solution where the donor wishes to support a specific cause for the long term.

From fund to foundation

Many donors start with a fund and establish their own foundation later, once the scale and direction of their philanthropy are clear. The formation of a separate foundation is explained in the article on charitable foundations in Switzerland, and its governance in the article on the foundation board.

How Ressos Legal helps

I advise donors on the choice between their own foundation, a fund within an umbrella foundation and other structures, and review the regulations and agreements involved. Contact me for a first conversation.

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2026.

English

Contact

Dr Alexander Ressos, TEP

Rechtsanwalt/Attorney-at-Law

I am a Swiss attorney-at-law and also admitted as a solicitor in Hong Kong and in England & Wales, with almost 25 years of experience.

Together with my multilingual team, including Chinese, Japanese, Korean, Russian, Ukrainian and French native speakers, I advise companies and their owners from around the world on the full range of banking, corporate, commercial and tax law matters in Switzerland, including international tax planning, fiduciary services, and legal family office services including immigration & relocation or real estate investments. My practice has a particular focus on clients from growth and frontier markets in Greater China, Central Asia and the Caucasus, the rest of Asia, the Middle East, Africa and Latin America, and I equally advise clients from Europe and North America. Through an affiliated Swiss trust company, we also take care of the incorporation and ongoing administration of their companies and other structures, including accounting, tax returns and corporate secretarial services, and I serve as a professional director where required. With the support of a network of first-class cooperation partners, I also implement solutions worldwide.

My approach is to act as a trusted advisor who works directly with decision-makers, on an equal footing: I start from what you want to achieve and shape every structure, contract and tax decision around your commercial goals and how it improves your after-tax return. As “lawyers who make it happen”, my team and I stay involved until your company is set up, your structure is in place and your transaction has closed, and we remain available for any follow-on work that may be required. You benefit from bespoke solutions and personal attention, and sound, friendly and practical advice. We are not the lowest-cost provider in the market, nor do we intend to be; our aim is to deliver well-founded, proper solutions and excellent value for money.

Get in touch →