The principle of a foundation is simple: a founder wishes to make a long-term commitment to a charitable cause and endows his/her assets to a foundation. Most foundations are set up by private individuals, but foundations can also be set up by companies or the public sector. Once a foundation has been set up, the assets remain with the foundation and its purpose may no longer be significantly altered.

The Zurich Cantonal Tax Office checks whether a foundation qualifies as a charitable foundation. Grant-making foundations, which account for roughly half of all charitable foundations in the Canton of Zurich, have their own assets which they invest professionally, using the income generated to pursue their charitable purpose.

Once a foundation has been established, the foundation’s assets are owned by the foundation; foundations do not have owners or members. Anyone who sets up a foundation will permanently relinquish their endowed assets to the foundation. In other words: the contributed assets can no longer be returned to the founder. A foundation may only be dissolved by the competent supervisory authority.