ABSTRACT
In comparison to other countries, the Austrian foundation sector is relatively underdeveloped and its overall influence is insignificant. Yet, at the same time, private foundations are a controversial subject of public discussion and debate. They are viewed as a means of accumulating capital whilst simultaneously taking advantage of the benefits of reduced taxation without necessarily having a public purpose. This situation has arisen due to the presence of different laws governing foundations – one of which allows for the establishment of foundations for purely private purposes. This law has led to public debate about the legitimacy of tax exemption for private purpose organizations created by wealthy individuals, an issue which remains on the political agenda. What is more, the new law is also seen as a useful tool for reorganizing nonprofit organizations (NPOs) that used to be incorporated as associations. It enables these organizations to operate more flexibly and to be less controlled by public agencies. Overall, as a consequence a majority of the foundations in Austria have not been established for charitable reasons. The focus of this chapter will be on foundations which serve public purposes.
