Foundations: An Innovation?

Like trusts, foundations have been with us since mediaeval times. The concept of a trust probably developed when crusaders handed over their estates to friends to administer until they returned from their travels and the practice evolved into a structure recognised by common law jurisdictions. The foundation arose from the practice of mediaeval patrons making endowments to charities- usually religious houses - in perpetuity and the use of the word ‘foundation’ to describe a charity or charitable purpose has survived into modern day English. However, although mediaeval English patrons may have endowed charities in the same way as their continental cousins, the foundation, as a structure with a separate legal personality, developed as a civil law concept and is recognised by many civil law systems, which do not recognise trusts. The most famous foundation is the Liechtenstein stiftung which dates from 1926 and has enabled Liechtenstein, a tiny country, to create a finance industry in