Stories
Stories
Podcast
19.10.2020
Once Patrick Knodel gets going, there's no stopping him. The man with the glasses and the light blue shirt just rattles off the problems. He talks about slave labor, about how the effects of his own actions can be seen in the gigantic palm oil plantations that exist in Malaysia and that all these effects are not reasonably priced into the economy. A simple question about his motivation for supporting social projects quickly turns into a long conversation - or many.
2016 will be enough for his father. He advises him not to talk about it, but to do something about it. Patrick Knodel, who until then had mainly tried to change his own life, such as using a Fairphone and living a largely vegan lifestyle, founded the Knodel Foundation. His father, founder of Pandion AG, a real estate company from Cologne, gives him 500,000 euros a year.
Patrick Knodel wants to stand up for "knowledge - and deliberately not for education in the traditional sense", as he puts it. Because education always has something to do with universities and schools. "But hardly anyone develops an understanding of global connections in these institutions." The only thing greater than his enthusiasm are his plans: he wants to support projects in developing countries that can eventually pay for themselves and, at best, are not permanently dependent on donations. Simple infrastructure projects are out of the question for him: "Then I invest in a new school building and still have poorly trained teachers," he says.
"With today's knowledge, I would no longer set up a foundation, but a gGmbH."
Three and a half years have passed since the conversation with his father, and Knodel is now quite disillusioned. "With the knowledge I have today, I would no longer set up a foundation, but a gGmbH instead," says the 35-year-old. This is partly because it took him over eight months to set up the foundation in the first place and partly because he considers the idea of the founder's will to be outdated. This will, formulated right at the start of the foundation, defines the standards according to which a foundation should act - even if the founder himself is already dead. But the world is changing faster and faster and what if Knodel suddenly wants to do something different, has a new idea, a new will? Even then, all this could be nonsense, but the foundation should not change.
Knodel himself has therefore also founded a for-profit investment vehicle. With Pandion Innovation for Impact GmbH, he wants to invest in business models with a positive impact. Something like this is more sustainable and can have a much greater impact, he says. Non-profit solutions should only be the exception where urgent problems cannot be solved with business models.
The 35-year-old is one of many people who want to help and change the world, but no longer consider foundations to be the best option. 576 new foundations with legal capacity under civil law were established last year. In 2007, the best year to date, there were still 1,134 foundations.
The association is aware of the decline, but the figures are not entirely comparable, says Anke Pätsch, Member of the Executive Board and Head of International Affairs and Diversity at the association. The fact that the number was particularly high in 2007 is due to a reform. Until that year, only a foundation capital of 330,000 euros was tax-privileged, but from then on it was increased to one million per spouse and decade. "This has made setting up a foundation and donating to existing foundations much more attractive," she says.
"When I started here in 2004, we were still talking about founding from a cold hand. Today, younger founders want to play an active role in shaping their foundations."
But can the decline only be described as the end of the reform boom? "Zero interest rate years are no advocates for foundations. But there is also a generational change among the wealthy," says Pätsch. "When I started here in 2004, we were still talking about donating from a cold hand. Today, younger founders want to play an active role in shaping their foundations."
There are a whole range of other problems in the German foundation system. For example, there are not only many successors who want to get involved in social causes but are not really familiar with the foundation model, says Pätsch. What's more: "Legislation still makes it difficult for funds to cross borders." And there is still no European foundation as a legal form. "If you want to be active as a foundation in several countries, you usually have to set up a new subsidiary locally."
In addition, the requirements for cross-border donations are particularly high. If a foundation wants to donate to a refugee NGO in Greece, for example, it must prove exactly what the NGO would do with the funds and that it would also be charitable in Germany. This is difficult to prove, as there are completely different legal definitions in Greece than in Germany. And then there is also the issue of the founder's will: once it has been formulated, it is very difficult to change it retrospectively.
"Our world is changing faster than state institutions, for example, can keep up. We need innovative speedboats."
Anne Bathel bypassed all these questions right from the start and founded a non-profit limited company (gGmbh). She is convinced that you can also be profit-oriented in order to do good. "Social entrepreneurship always has the basic idea that you can make a profit, but reinvest it directly for a social impact," she says. The idea is always good when it comes to scaling social impact with market instruments. "Our world is changing faster than state institutions, for example, can keep up. We need innovative speedboats."
Bathel founded her innovative speedboat, the ReDI School in Berlin, in December 2015, when the refugee crisis was becoming increasingly dramatic and many people were arriving in Germany. At the time, Bathel headed up the Berlin Peace Innovation Lab, which is part of a global network. Among other things, the members want to promote social security, academic knowledge and business development. "At the time, I was sitting in a room with a good 40 stakeholders and we all asked ourselves what we could do," she recalls. The decision was made after visiting a refugee home. Bathel met an Iraqi who was a programmer. "He wanted to live independently of state funding and just work, but of course he didn't have a laptop," she says.
Next, she wrote a post on Facebook. Tenor: Who can help? Bathel wanted to set up a school that would train refugees in IT and open up a career path for them. She received a good 30 comments from people who could provide premises, donate laptops or volunteer to hold seminars. "Just one week later, we had set up the website and designed a logo," she says. The first workshops lasted just a few hours, then a day and finally several weeks. The first larger course had 42 participants.
"The NGO world is not so digital, the start-up world is not so focused on social impact, we wanted to bring the two together," says Bathel. There are now also ReDI schools in Munich, Copenhagen and one for North Rhine-Westphalia in Düsseldorf and Duisburg. They have long been supporting not only refugees, but also socially disadvantaged people. For Bathel, the gGmbh is the best solution "for people who want to build something sustainable".
However, non-profit GmbHs also have at least one disadvantage compared to foundations: the founder cannot determine his will for all eternity. This means that a gGmbH can react more quickly. However, once the founder has passed away or retired, it could also act against his or her original will.
At the Foundation Association, they have long recognized that something has to change. For years, they have been pushing for a reform, which is now going to happen. It is intended to simplify foundation law in many areas, for example in the case of a possible amendment to the articles of association.
This would be a huge step forward for the foundation sector and perhaps the number of foundation registrations will increase again when the reform is introduced. However, these changes come too late for Patrick Knodel, who is leaving the association. Knodel recently even wanted to convert his foundation into a gGmbH, but initially rejected the plan because it is associated with all kinds of hurdles. However, if the foundation supervisory authority were to hinder his investments in future, he would also take the final step and, for better or worse, dissolve his foundation and think about something new.
Stories
19.10.2020
Jan Schulte
For a long time, foundations seemed to be the most important instrument for the wealthy to do good. But now a new generation is emerging. A story about perhaps the biggest change in philanthropy.
Once Patrick Knodel gets going, there's no stopping him. The man with the glasses and the light blue shirt just rattles off the problems. He talks about slave labor, about how the effects of his own actions can be seen in the gigantic palm oil plantations that exist in Malaysia and that all these effects are not reasonably priced into the economy. A simple question about his motivation for supporting social projects quickly turns into a long conversation - or many.
2016 will be enough for his father. He advises him not to talk about it, but to do something about it. Patrick Knodel, who until then had mainly tried to change his own life, such as using a Fairphone and living a largely vegan lifestyle, founded the Knodel Foundation. His father, founder of Pandion AG, a real estate company from Cologne, gives him 500,000 euros a year.
Patrick Knodel wants to stand up for "knowledge - and deliberately not for education in the traditional sense", as he puts it. Because education always has something to do with universities and schools. "But hardly anyone develops an understanding of global connections in these institutions." The only thing greater than his enthusiasm are his plans: he wants to support projects in developing countries that can eventually pay for themselves and, at best, are not permanently dependent on donations. Simple infrastructure projects are out of the question for him: "Then I invest in a new school building and still have poorly trained teachers," he says.
"With today's knowledge, I would no longer set up a foundation, but a gGmbH."
Three and a half years have passed since the conversation with his father, and Knodel is now quite disillusioned. "With the knowledge I have today, I would no longer set up a foundation, but a gGmbH instead," says the 35-year-old. This is partly because it took him over eight months to set up the foundation in the first place and partly because he considers the idea of the founder's will to be outdated. This will, formulated right at the start of the foundation, defines the standards according to which a foundation should act - even if the founder himself is already dead. But the world is changing faster and faster and what if Knodel suddenly wants to do something different, has a new idea, a new will? Even then, all this could be nonsense, but the foundation should not change.
Knodel himself has therefore also founded a for-profit investment vehicle. With Pandion Innovation for Impact GmbH, he wants to invest in business models with a positive impact. Something like this is more sustainable and can have a much greater impact, he says. Non-profit solutions should only be the exception where urgent problems cannot be solved with business models.
The 35-year-old is one of many people who want to help and change the world, but no longer consider foundations to be the best option. 576 new foundations with legal capacity under civil law were established last year. In 2007, the best year to date, there were still 1,134 foundations.
The association is aware of the decline, but the figures are not entirely comparable, says Anke Pätsch, Member of the Executive Board and Head of International Affairs and Diversity at the association. The fact that the number was particularly high in 2007 is due to a reform. Until that year, only a foundation capital of 330,000 euros was tax-privileged, but from then on it was increased to one million per spouse and decade. "This has made setting up a foundation and donating to existing foundations much more attractive," she says.
"When I started here in 2004, we were still talking about founding from a cold hand. Today, younger founders want to play an active role in shaping their foundations."
But can the decline only be described as the end of the reform boom? "Zero interest rate years are no advocates for foundations. But there is also a generational change among the wealthy," says Pätsch. "When I started here in 2004, we were still talking about donating from a cold hand. Today, younger founders want to play an active role in shaping their foundations."
There are a whole range of other problems in the German foundation system. For example, there are not only many successors who want to get involved in social causes but are not really familiar with the foundation model, says Pätsch. What's more: "Legislation still makes it difficult for funds to cross borders." And there is still no European foundation as a legal form. "If you want to be active as a foundation in several countries, you usually have to set up a new subsidiary locally."
In addition, the requirements for cross-border donations are particularly high. If a foundation wants to donate to a refugee NGO in Greece, for example, it must prove exactly what the NGO would do with the funds and that it would also be charitable in Germany. This is difficult to prove, as there are completely different legal definitions in Greece than in Germany. And then there is also the issue of the founder's will: once it has been formulated, it is very difficult to change it retrospectively.
"Our world is changing faster than state institutions, for example, can keep up. We need innovative speedboats."
Anne Bathel bypassed all these questions right from the start and founded a non-profit limited company (gGmbh). She is convinced that you can also be profit-oriented in order to do good. "Social entrepreneurship always has the basic idea that you can make a profit, but reinvest it directly for a social impact," she says. The idea is always good when it comes to scaling social impact with market instruments. "Our world is changing faster than state institutions, for example, can keep up. We need innovative speedboats."
Bathel founded her innovative speedboat, the ReDI School in Berlin, in December 2015, when the refugee crisis was becoming increasingly dramatic and many people were arriving in Germany. At the time, Bathel headed up the Berlin Peace Innovation Lab, which is part of a global network. Among other things, the members want to promote social security, academic knowledge and business development. "At the time, I was sitting in a room with a good 40 stakeholders and we all asked ourselves what we could do," she recalls. The decision was made after visiting a refugee home. Bathel met an Iraqi who was a programmer. "He wanted to live independently of state funding and just work, but of course he didn't have a laptop," she says.
Next, she wrote a post on Facebook. Tenor: Who can help? Bathel wanted to set up a school that would train refugees in IT and open up a career path for them. She received a good 30 comments from people who could provide premises, donate laptops or volunteer to hold seminars. "Just one week later, we had set up the website and designed a logo," she says. The first workshops lasted just a few hours, then a day and finally several weeks. The first larger course had 42 participants.
"The NGO world is not so digital, the start-up world is not so focused on social impact, we wanted to bring the two together," says Bathel. There are now also ReDI schools in Munich, Copenhagen and one for North Rhine-Westphalia in Düsseldorf and Duisburg. They have long been supporting not only refugees, but also socially disadvantaged people. For Bathel, the gGmbh is the best solution "for people who want to build something sustainable".
However, non-profit GmbHs also have at least one disadvantage compared to foundations: the founder cannot determine his will for all eternity. This means that a gGmbH can react more quickly. However, once the founder has passed away or retired, it could also act against his or her original will.
At the Foundation Association, they have long recognized that something has to change. For years, they have been pushing for a reform, which is now going to happen. It is intended to simplify foundation law in many areas, for example in the case of a possible amendment to the articles of association.
This would be a huge step forward for the foundation sector and perhaps the number of foundation registrations will increase again when the reform is introduced. However, these changes come too late for Patrick Knodel, who is leaving the association. Knodel recently even wanted to convert his foundation into a gGmbH, but initially rejected the plan because it is associated with all kinds of hurdles. However, if the foundation supervisory authority were to hinder his investments in future, he would also take the final step and, for better or worse, dissolve his foundation and think about something new.
About the author
Jan Schulte
Jan Schulte writes about business and politics.
