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Tonika Hirdman (Fondation de Luxembourg): The Smarter Way to Give in 2023

We can all have a positive impact on the world around us, but by using their wealth, some can make a greater impression. Tonika Hirdman, the Director General of the Fondation de Luxembourg discusses how, as a financial hub, it makes sense that Luxembourg is becoming a growing center for philanthropy.

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Why are foundations developing in Luxembourg?

The idea for foundations originally came from the private banking sector. One of the private banks in Luxembourg noticed an increase in interest among their clients to engage in philanthropy. They started lobbying because they thought the necessary infrastructure should be created by the Luxembourg government. At a conference organized by Jean-Claude Juncker, the then Prime Minister of Luxembourg, the idea of creating an umbrella foundation to help people engage in philanthropy was launched. Last year we reached a significant milestone: We created our 100th Foundation. Today we have created 109 and we will shortly create our 110th.

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“It became clear wealthy people felt the responsibility that came with being well off and sought to share and to help others”

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Did you expect giving through foundations to become this big when you took on the role?

Many people were hesitant and did not think that the establishment of philanthropic foundations would take off. Even the government was dubious because, as you may remember, during 2008 and 2009 we faced a financial crisis across the whole world, but especially in Luxembourg. People also questioned why even the rich would start giving money away when they were losing their wealth? To the surprise of many, the opposite happened. But I strongly believed in the future of foundations. I thought there was real potential in their role in providing philanthropy. If I hadn’t, I wouldn't have gone into it. My positivity was vindicated as it became clear wealthy people felt the responsibility that came with being well-off and sought to share and to help others.

Luxembourg has a mixed reputation when it comes to philanthropy. We hear about the government being generous, but it is not always clear that Luxembourg is a generous nation. Do you agree?

That is not a fair reflection of philanthropy in the Duchy. The Luxembourg government is very generous: It is one of the few countries which comes close to or exceeds spending 1% of GDP on development aid. There is also a profound history of sharing and giving among ordinary Luxembourgers. However, as there's only a limited history of setting up foundations here: Our first donors were not Luxembourgers, they were foreigners. It has only been five years since Luxembourgers have started to come to us now that they see what it's about.

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