¹ See generally Foundations in Europe (Schülter, Andreas, Then, Volker, Walkenhorst, Peter, eds.), London, The Brookings Institution, 2001)Google Scholar. As we will see, Germany has reformed its law of foundations. In recent years Italy has also reformed its law of foundations. See Ponzaneli, Giulio, “Le Fondazioni tra la riforma del Codice Civile,” (1998) 52 Rivista de Notariato 642–649Google Scholar. Voices calling for a reform of the law of foundations are heard also in Banmeyer, Belgium. I., Talbot, C., “Les foundations: Etat présent et ideés de réforme,” (1998) Annales de Droit de Louvain, 25–77 at 57 ff.Google Scholar

² See Kerem, Shlomo, The Trust Law, (Jerusalem, H.S.L Publishing Inc., 3rd ed., 1995) (Hebrew)Google Scholar; Tenenboim, Avraham, Kaplan, Avraham, “The Foundations in Israel,” (1997) 1 Sharei Mishpat 67 (Hebrew)Google Scholar. See also Lerner, Pablo, The Unilateral Promise, (Jerusalem, the Harry Sacher Institute for Legislative Research and Comparative Law, 2001)(Hebrew)Google Scholar.

³ In legal literature it is possible to find several definitions that emphasize the public charitable character of the foundation. For example: “A non-governmental, nonprofit organization having a principal fund of its own, managed by its own trustees or directors, and established to maintain or aid social, educational, charitable, religious, or other activities serving the common welfare,” Frank Andrews, Philanthropic Foundations citatation in Parrish, Thomas, “The Foundation: ‘A Special American Institution,” in Heinan, Fritz, ed. The Future of Foundations (New Jersey, Prentice Hall Inc., 1973) 7, at 10Google Scholar; or “An asset managed by an identifiable organization that is simultaneously private, non-membership based, self governing, nonprofit-distributing and serving a public purpose,” Anheier, Helmut, “Foundations in Europe: a Comparative Perspective,” in Schülter, Andreas, Then, Volker, Walkenhorst, Peter, eds. Foundations in Europe (London, The Brookings Institution, 2001) 35, at 41Google Scholar. As we will see later, the foundation can also pursue private aims. See also n. 18.

⁴ The subject includes all types of organizations with different legal forms that are neither private nor public and that are, in general, non-profit.

⁵ See below, section IV. B.

⁶ For the history of foundations see, among others, Karper, Ines, Die Zusammenlegung von privatrechtlichen Stiftungen (Aachen, Shaker Verlag GmbH, 1995) 8 ffGoogle Scholar; Schulte, Martin, Staat und Stiftung (Heidelberg, Müller, 1989) 23 ffGoogle Scholar; von Campenhausen, Axel Freiherr, “Geschichte des Stiftungswesens,” in Stiftung, Bertelsmann, ed. Handbuch Stiftungen (Wiesbaden, Gabler, 1998), 23–45CrossRefGoogle Scholar; Imbert, Jean, “Aperçu Historique sur les Foundations en Droit Français,” in Dupuy, René-Jean, ed., Le Droit des Foundations en France et à l'Étranger (Paris, Documentation française, 1989) 21–33Google Scholar; Smith, James, Borgmann, Karsten, “Foundations in Europe: the Historical Context,” in Schülter, Andreas, Then, Volker, Walkenhorst, Peter eds. Foundations in Europe (London, The Brookings Institution, 2001) 2–34Google Scholar; Hennerkes, Brun-Hagen, Schiffer, Karl, Stiftungsrecht (Frankfurt, Fischer – Heymanns, 1996) 33 ffGoogle Scholar.

⁷ See Strachwitz, Rupert, “Germany,” in Schülter, Andreas, Then, Volker, Walkenhorst, Peter, eds. Foundations in Europe (London, The Brookings Institution, 2001) 133–144Google Scholar.

⁸ The chapter dealing with foundations was partially reformed by law 15 July, 2002. “Gesetz zur Modernisierung des Stiftungs vom 15. Juli 2002” (BGB1. I S. 2634). The law entered into force in 1–9–2002. The bibliography regarding Stiftung in German law is very extensive. See for example Seifart, Werner, von Campenhausen, Axel Freiherr, Handbuches des Stiftungsrechts (München, C.H. Beck Publishing House 1999)Google Scholar; Flume, Werner, Allgemeines Teil des Bürgerliches Rechts –2. Teil – Die juristische Person (Berlin, Springer, 1983) 130 ffGoogle Scholar; Wachter, Tomas, Stiftungen Zivil- und Steuerrecht in der Praxis, (Köln, Schmidt, 2001)Google Scholar; Schauhoff, Stephan, Handbuch der Gemeinnützigkeit (München, Beck, 2000) 95 ffGoogle Scholar; Leisner, Walter, “Le Régime Juridique des Foundations en Droit Allemand,” in Dupuy, René-Jean, ed. Le Droit des Foundations en France et à l'Étranger (Paris, Documentation Française 9) 97–108Google Scholar. The commentaries of the BGB like Münchener Kommentar Bürgerliches Gesetzbuch (München, Beck, 2001)Google Scholar and Staudinger's Kommentar zum Bürgerlichen Gesetzbuch (Berlin, Sellier 1995)Google Scholar contain important information and bibliographical references.

⁹ These recent reforms in the German Law of Foundations are the outcome of a long process of debate and analysis. See Wochner, Georg, “Rechtsfähige Stiftungen – Grundalagen und aktuelle Reformbestrebingen,” (1999) Betriebes Berater 1441–1449Google Scholar; Crezelius, Georg, Rawert, Peter, “Stiftungsrecht – quo vadis,” (1999) 20 Zeitschrift für Witrschafsrecht 337Google Scholar.

¹⁰ This reform of the BGB chapter on foundations followed the reform of tax rules regarding foundations (which took place in the year 2000), and was aimed at simplifying the regimen of the BGB regarding foundations.

¹¹ I will refer to these state laws throughout this paper.

¹² The Amutot Law(1980) 34 L.S.I. 239, Sec. 1.

¹³ Ibid., sec. 11.

¹⁴ See Zandberg, Chaim, Public Supervison of Charitable Trusts, Ramot: Tel Aviv, 2003 p. 19 ff. [Hebrew]Google Scholar; Kaplan, Tenenboim, supra n. 2. As to religious foundations, there is no precise information available.

¹⁵ See the site of Bundesverband Deutscher Stiftungen. [www.stiftungen.org/statistiks. Last visit 20–10–03]. This is a considerable number in comparison with Greece, for example, where there are only around 500 foundations registered.

¹⁶ Notwithstanding, there are many assets, especially real estate, that are foundations and that surely have economic importance.

¹⁷ This is, for example, the case in Austria, where after the enactment of the Bundesgestiftung und Fundgesetz in 1993, the number of foundations created there increased considerably. See Benicke, Christoph, “Neue Stiftungsgesetze in Österreich und Brandenburg,” in Stiftungen, Bundesverband Deutscher, ed. Ein modernes Stiftungsprivatrecht zur Förderung und zum Schutz des Stiftungsgedankens (Berlin, 2001) 181, at 182Google Scholar.

¹⁸ There are other countries whose laws do include a definition of a foundation. That is the case in Austria (Alegal person established upon an irrevocable transfer of assets, income from which is to be applied for charitable purposes), Switzerland (A corporate body, created by the dedication of assets for a specific purpose of a public, private or charitable character”), the Netherlands (A foundation is a legal person created by a legal act which has no members and whose purpose is to realize an object stated in its articles using property allocated to such purpose), etc. Greece expressly distinguish between foundations (an Institution created by disposition of assets under a deed of establishment made either inter vivos or under testament, for the pursuit of a particular durable purpose) and charitable foundations (a disposition of assets, made inter vivos or under testament, for the pursuit of a charitable purpose over a definite or indefinite period, fulfillment of which is entrusted by deed of establishment to natural persons or legal entities). See Drobnig, Ulrich, “Foundations as Institutionalized Charitable Activity,” in Schülter, Andreas, Then, Volker, Walkenhorst, Peter, eds. Foundations in Europe (London, The Brookings Institution, 2001) 604, at 608Google Scholar and appendix at 800 ff.

¹⁹ The declaration of will should not be confused with the instrument with which it is carried out, which may be an endowment [k'tav hekdesh, in Hebrew] or a will.

²⁰ Flume, supra n. 8 at 139; Galgano, Francesco, Le Associazioni Le Fondazioni I Commitati (Padova, Cedam 1996) 388Google Scholar; Pradolini, Tiziana, “La Disciplina Tributaria delle Fondazioni nell'Ordinamento della Repubblica Federale Tedesca,” in Rescigno, Pietro, ed. Le Fondazioni in Italia e all'Estero (Padova, Cedam, 1989) 421, at 425Google Scholar.

²¹ The Israeli Succession Law 1965 (19 L.S.I. 58) allows a person in danger of death to testify orally in the presence of two witnesses who will put down the will of the testator. The testament is valid for 30 days after the danger disappears.

²² Regarding the Stiftung as a unilateral act or unilateral declaration of will see Wachter, supra n. 8 at 6. Generally regarding the unilateral promise in Israel and comparative law see Lerner, supra n. 2.

²³ See Banmeyer, Talbot, supra n. 1, at 63. The idea of the unilateral promise is a German idea, but has been adopted by other legal systems. The unilateral promise is accepted in different ways in the Italian, Swiss and Portuguese law, and in the law of Louisiana among others.

²⁴ Although we may recognize some cases of juridical acts that should be defined as unilateral promises (the case of the irrevocable offer).

²⁵ The Trust Law, 33 L.S.I. 153, sec. 17.

²⁶ While the use of a notarial instrument is not common in Contract Law, it is used regarding the foundation. When the Israeli legislator wanted to dress a juridical act with formal requirements, he demanded a “written document” (as in the case of an undertaking to transfer real estate or to make a donation) but not a notarial document. The foundation is an exception.

²⁷ Consider for example, the case of Scotland. See Reid, Kenneth, “National Report for Scotland,” in Hayton, David, Kortmann, Sebastianus, Verhagen, Hendrikus eds. Principles of European Trust Law, (The Hague, Kluwer, 1999) 67, at 75–76Google Scholar.

²⁸ The question may arise in an agreement between the donor and the trustee regarding the establishment of a foundation. In this case, the lack of performance by the donor, may constitute a breach of contract.

²⁹ Compare the solution in the Swiss Law. ZGB sec. 80.

³⁰ See for example H.P. (Jerusalem) 491/94 General Guardianship v. Akiva Ben Harush Lesri et al. (unpublished).

³¹ Before the reform, sec. 80 of the BGB referred to the authorization of the state's authorities.

³² BGB, Sec. 82. See Seifart, v. Campenhausen, supra n. 8, at 237.

³³ The Trust Law establishes prison penalty for the trustee that does not fulfill this obligation. The law does not establish what the rule is in case the trustee is a juridical person such as an amuta.

³⁴ See Reuter, Dieter, “Konzessions- oder Normativsystem für Stiftungen,” in Hähn, Guenther ed. Festschrift für Alfons Kraft (Kriftel, Luchterhand, 1998) 493–508Google Scholar; Kübler, Friedrich, Gesellschaftsrecht, (Heidelberg: Müller 1998) 139Google Scholar; Büermann, W., “Die Praxis der Stiftungsbehörden,” in histitut der Wirtschaftsprüfer, , ed. Stiftungen, Rechnungslegung, Kapitalerhaltung, Prüfung und Besteuerung (Düsseldorf, IDW, 1997) 23, at 57Google Scholar.

³⁵ Muscheler, Karl-Heinz, “Normativ- oder Konzessionssystem im Stiftungsrecht?” in Mecking, Christoph, Schulte, Martin, eds. Grenzen der Instrumentalisierung von Stiftungen (Berlin, Mohr Siebeck, 2003) 140, at 153 ff.Google Scholar

³⁶ See Civil Code of Italy: C.c. sec. 14 ff, Civil Code of Spain: C.C. sec. 35; Civil Code of Argentina: Cod. Civ sec. 33; Civil Code of Portugal, sec. 185 ff.

³⁷ Compare with Italian law Galgano, Francesco, 1 Diritto Civile e Commerciale, (Padova, CEDAM, 1993) 253 ff.Google Scholar

³⁸ Around 95%. See Strachwitz, supra n. 7, at 138.

³⁹ See BGB, sec. 86.

⁴⁰ From this point of view, foundations are in the same group as the registered association (rechtsfähiger Verein), the non-registered association (nichtrechtsfähige Verein) and the eingetragene Genossenschaft. See Köbler, supra n. 34, at 111 ff. See also Schmidt, Karsten, Gesellschaftsrecht, (Koln, Carl Heymanns, 1997) 181, 185 ff.Google Scholar We find a similar solution in other civilian law legal systems as for example, in Switzerland. See Tuor, Peter, Schnyder, Bernhard, Das Schweizerische Zivilgesetzbuch, (Zurich, Schulthess, 1995) 143 ff.Google Scholar

⁴¹ Regarding the idea of legal transplants see Watson, Alan, Legal Transplants, (Athens, University of Georgia Press, 1993)Google Scholar. In his theory, Prof. Watson contends that different solutions are “transplanted” form one legal system to the other, independently of social or economical conditions.

⁴² 1 Law of Palestine 1918-1925, 74 ff.

⁴³ The Israeli legal system has shifted from Ottoman law to the enactment of English-law-based-statues and common-law-precedent to the enactment of Israeli national legislation, which in some fields has clear continental law features. See Lerner, Pablo, “Legal History and the Study of law – The Case of Israel,” in Rabello, Alfredo Mordechai ed. Israeli Reports to the 15th International Congress of Comparative Law, (Jerusalem, The Harry Sacher Institute for Legislative Research and Comparative Law, 1999) 1Google Scholar; Rabello, Alfredo Mordechai, Lerner, Pablo, “Remarques sur le droit comparé en Israël,” (1999) 4 Revue Internationale de Droit Comparé 963CrossRefGoogle Scholar. Regarding mixed legal jurisdictions see Smits, Jan, The Making of European Private Law, (Antwerp, Intersentia, 2002)Google Scholar.

⁴⁴ In Turkey too, the Mejella had been replaced by Swiss legislation.

⁴⁵ The Capacity and Guardianship Law (1962) (16 L.S.I. 106), the Contract Law (general part) (1973) (25 L.S.I. 117), Contracts (Remedies for the breach of contract) Law – 1970 (25 L.S.I. 11), the Sale Law (1968) (22 L.S.I. 107), the Transfer of Obligations Law (1969) (23 L.S.I. 277), the Tenant Protection (Miscellaneous Provisions) Law (1971) (25 L.S.I. 91), Baillees Law (1968) (21 L.S.I. 49), and the Land Law (1969) (23 L.S.I 283).

⁴⁶ Weisman, Joshua, “Shortcomings in the Trust Law, 1979,” (1980) 15 Israel Law Review 372, at 372 ffCrossRefGoogle Scholar.

⁴⁷ See Zeltner, Ze'ev, “The Trusts Bill, 1974,” (1976) 2 Tel Aviv University Studies in Law 88Google Scholar.

⁴⁸ See Weisman, supra n. 46 at 373 ff.

⁴⁹ See Reid, supra n. 27, at 67.

⁵⁰ See Arai, Makoto, “The Law of Trusts and the Development of Trusts Business in Japan,” in Hayton, David ed. Modern International Developments in Trust Law (The Hague, Kluwer, 1999), 63Google Scholar.

⁵¹ Regarding charities in England, see generally Parker, David and Mellows, Anthony, in Oakley, Anthony ed. The Modern Law of Trusts, (London, Gaunt, 1994) 296 ff.Google Scholar Regarding the differences between the English model of Trust and the Israeli model, see Weisman, supra n. 46. Roughly, it is possible to say that in the continental approach the distinction between public and private foundations is based in the way of constitution, while the common law approach focuses on the distinction in the objectives. Although the Israeli law follows the English model, there are some differences between the Israeli hekdesh and the charity in the common law. The distinction between trusts (that is the general category) and the charity that is a trust created for public purposes is clear in English law; the overlapping that appears in the Israeli law between trusts and private foundations does not exist.

⁵² See Kaplan, Tenenboim, supra n. 2 at 85.

⁵³ 46/94 Abra'amov v. The Registrar of Property (1996) 50 (2) P.D. 202 [hereinafter Abra'amov]. From a comparative point of view, it is interesting to point out that the Supreme Court considered the question of legal personality while discussing the German model.

⁵⁴ Trust Law, supra n. 25, sec. 17, 18, 19.

⁵⁵ Ibid., Sec. 24.

⁵⁶ Ibid., Sec. 18. Compare below, section V A(2).

⁵⁷ See Chief Justice Barak in Abra'amou, supra n. 53.

⁵⁸ Abra'amov, ibid., at 209.

⁵⁹ This issue has arisen in Europe and it is accepted that a foundation may fall into bankruptcy. This situation is clear since the foundation carried out economic activities. See Rimini, Carlo, “Il Problema del Fallimento della Fondazione: la Vicenda dell'Istituto Sieroterapico Milanese”, (1995) 11 Contratto e Impresa 581Google Scholar. A bad administration of the foundation may certainly jeopardize the objectives of the foundation and bring it to a situation of insolvency. But a badly administered foundation even without enjoying legal personality may be in danger of extinction due to economic difficulties.

⁶⁰ See below, section III B (4).

⁶¹ See below, section IV B.

⁶² During the Ottoman period in Palestine, Jews also used the Muslim courts to create foundations. Theoretically, these foundations should enjoy legal personality today. See Tenenboim, Kaplan, supra n. 2, at 75 ff.

⁶³ See Rambam, : Halachot Tohehn Venithan, 75, 1Google Scholar; Halachot G'niba, 2, 1; Halachot Nezekei Mamon, 8, 1.

⁶⁴ See Rimini, supra n. 59, at 586.

⁶⁵ This is the case of “Carlsberg” in Denmark or “Ikea” in Sweden.

⁶⁶ Law of 23–7–1987, modified by the law of 4–7–1990. See Banmeyer, Talbot, supra n. 1 at 46.

⁶⁷ See Rimini, supra n. 59, at 585 ff; De Giorgi, Maria, “Le Fondazioni,” in Rescigno, Pietro, ed. 2Tratatto di Diritto Privato (Torino, UTET, 1992) 253, at 264Google Scholar. The institution of enterprise foundation is also accepted in Switzerland, although neither the Civil Code nor the Obligation Code recognize it expressly. Regarding the relationship between foundation and enterprise in Swiss law see Schmid, Roger, Die Unternehmensstiftung, (Zürich, Schulthess, 1997)Google Scholar.

⁶⁸ See Hof, Hagen, “Zur Typologie der Stiftung,” in Stiftung, Bertelsmann, ed. Handbuch Stiftungen (Wiesbaden, Gabler, 1998) 941, at 953 ffGoogle Scholar; Brandmüller, Gerhard, Gewerbliche Stiftungen, (Munster, Erich Schmidt Verlag, 1998) 97 ffGoogle Scholar; Seifart, v. Campenhausen, supra n. 8, at 93, 98, and 366 ff; Schulte, supra n. 6 at 46 ff.

⁶⁹ Fleishman, Joel, “Public Policy and Philanthropic Purpose- Foundation Ownership and Control of Corporations in Germany and the United States,” in Schülter, Andreas, Then, Volker, Walkenhorst, Peter, eds. Foundations in Europe (London, The Brookings Institution, 2001) 372, at 395Google Scholar.

⁷⁰ See for example the explanation as to the reason that lead Robert Bosch to set up his well known foundation as a Limited Company foundation: “[…] In Germany, foundations are subject to government control and Robert Bosch in his capacity as a liberal Swabian entrepreneur was adverse to such control. Moreover the nonprofit GmbH also enables the family to exert its influence on events for the simple fact that they are shareholders. In the case of a foundation, all this would be impossible”. Letter of Carl-Heinz Heure cit. in Fleishman, ibid., at 386. See below n. 72.

⁷¹ Examples of foundations that are carried out within an enterprise framework are the Bertelsmann Foundation, the Carl Zeiss Foundation, the Volkswagen Foundation.

⁷² A famous case is the Robert Bosch Stiftung GmbH. It is not technically a Stiftung but a limited company with non-profit aims. Regarding the Bosch foundation see Löwer, Volkmar, “Stiftung und Unternehmen im Spannungsverhältnis”, in Stiftung, Bertelsmann, ed. Handbuch Stiftungen (Wiesbaden, Gabler, 1998) 401, at 417Google Scholar.

⁷³ Regarding the relationship between the Stiftung and company law, see Udo Delp, Die Stiftung & Co. KG (Heidelberg, R. v. Decker, Schenk, 1991).

⁷⁴ Sec. 55 Abgabenordnung.

⁷⁵ The very name Stiftung enjoys a certain prestige in Germany, and for that reason numerous non-profit associations chose appearing as Stiftung.

⁷⁶ See Sauter, Eugen, Schweyer, Gerhard, Der eingetragene Verein, (München, Beck, 1994) 42Google Scholar; Brandmüller, supra n. 68, at 47.

⁷⁷ See BGB, sec. 21: “An association whose object is not directed at the carrying out of an economic enterprise acquires legal personality by registration in the Register of Associations of the competent District Court.”

⁷⁸ See Löwer, supra n. 72 at 407.

⁷⁹ See Kerem, supra n. 2 at 539 ff.

⁸⁰ Charitable Trusts Ordinance (Amendment No. 2) Law – 1973, 27 L.S.I 305.

⁸¹ See the Trust Law (1979), supra n. 25, sec. 32 ff. Technically speaking we face a sort of internal contradiction since the law maker introduced the society form in the Trust Law.

⁸² Company Ordinance, 1999, sec. 11 (b).

⁸³ The recognition is doctrinary although it appears in some stadual law of foundations. See for example the Law of Foundation of Nordrheim-Westfalen, sec. 2 (2).

⁸⁴ Some scholars have expressed doubts as to whether this sort of institution could really be defined as a foundation. Ponzanelli, Giulio, “Le Fondazioni in Diritto Straniero,” in Rescigno, Pietro, ed. La Fondazioni in Italia e all'Estero (Padova, CEDAM, 1989) 361, at 388Google Scholar.

⁸⁵ We find a similar solution in Italian law. See Galgano, supra n. 27 at 429.

⁸⁶ This was the position adopted by the so called Second Commission that reviewed the BGB before its entrance into force in 1900. See Wochner, Georg, “Die unselbständige Stiftung,” (1999) 6 Zeitschrift für Erbrecht und Vermogensnachfolge 125, at 126Google Scholar. See also Westebbe, Achim, Die Stiftungstreuhand, (Baden-Baden, Nomos, 1993) 68Google Scholar; Sorg, Martin, Die Familienstiftung, (Baden Baden, Nomos, 1984), 148 ff.Google Scholar

⁸⁷ This sort of discussion is superfluous in Israel since the only way to rescind the foundation is if this power was expressly reserved in the charter of the foundation.

⁸⁸ See Wachter, supra n. 8, at 192.

⁸⁹ Compare section 518 of the BGB, regarding the need of a notarial document for promises of gifts.

⁹⁰ This distinction may be especially useful for dealing with cases where the estate which constitutes the assets of the foundation is administered by a non-profit society, for example: a foundation that is a building used by a hospital. In this case the assets are the foundation but the activities of the hospital are carried out by the non-profit society.

⁹¹ This is the case in Germany. Kötz, Hein, “The Modern Development of Trust Law in Germany,” in Hayton, David, ed. Modern International Developments in Trust Law (The Hague, Kluwer, 1999) 49, at 52Google Scholar. In Germany, for example, there exists the Stiftung Verband, an institution that administers small funds earmarked for particular aims.

⁹² Like the Konrad-Adenauer-Stiftung e. V. or the Friedrich-Ebert- Stiftung e.V. Thanks to Dr. Christian Meyer (Germany) for the information. Concerning the political parties' foundation in Germany see Beise, Marc, “Politische Stiftungen,” in Stiftung, Bertelsmann, ed. Handbuch Stiftungen (Wiesbaden, Gabler, 1998) 205–224CrossRefGoogle Scholar.

⁹³ This is generally understood as a foundation aimed at supporting charitable activities focused on local needs, of a town or of a region.

⁹⁴ The first community foundation was established in Germany in 1996. Today there are 35 community foundations throughout Germany. Nevertheless, as measured by their assets and compared to the institution in America, the community foundations in Germany are small. For more information, see www.buergerstiftungen.de.

⁹⁵ Regarding the unselbständige Stiftung, see above section III B (4).

⁹⁶ van Veen, Wino, “Supervision of Foundations in Europe; Post-Incorporation, Restriction and Requirements,” Schülter, Andreas, Then, Volker, Walkenhorst, Peter, eds. Foundations in Europe (London, The Brookings Institution, 2001) 694, at 732Google Scholar.

⁹⁷ See Pradolini, supra n. 20 at 427. In any case, it is estimated that 90% of the foundations in Germany are defined as charitable Turner, N., “Die Stiftung – eine Möglichkeit zukunftsorientierter Vermögensbindung,” (1995) 45 Der Betrieb 413, at 416Google Scholar.

⁹⁸ See Law of Foundation of Bayern (sec. 1(3)), and of Rheinland Pfalz (sec. 2 (2) (3)).

⁹⁹ See Peter Rawert/Staudinger, supra n. 8, at 438 ff; Schröder, Rainer, “Die staatlich errichte Stiftung des offentlichen recht – ein austerbendes rechtsphänomen?,” in Mecking, Christoph, Schulte, Martin, eds. Grenzen der Instrumentalisierung von Stiftungen (Berlin, Mohr Siebeck, 2003) 117–135Google Scholar.

¹⁰⁰ For one exception, see, for example, the Protection of Animal law (1994), which establishes a public endowment aimed at fostering the protection of animals. Also we find cities that have created foundations for fostering activities in science and education in their cities. Take for example the Haifa Art Foundation, the Kiryat Gat Foundation, Beer Sheva Foundation. In fact they are not technically foundations, but they are registered as non-profit companies that are directly connected to the local authorities.

¹⁰¹ See The Trust Law (1979), supra n. 25.

¹⁰² See Westebbe, supra n. 86, at 50. But it is not only the foundation constituted according to the BGB that may carry out charitable objectives. An unselbständige Stiftung, may also be a charity. Nonetheless this last solution will seldom be adopted since the unselbständige Stiftung has a limited capacity due to the lack of juridical personality.

¹⁰³ These objectives refer to a Society for the benefit of the public, but we could apply them also to characterize a public foundation.

¹⁰⁴ For the definition of charitable objectives in English law see Duddington, John, Equity and Trusts (London, M&E Handbook, 1994) 106Google Scholar; Parker, Mellows, supra n. 51, at 296 ff; Lupoi, Maurizio, Introduzione al Trusts (Milano, Giuffre' Editore, 1994) 50 ffGoogle Scholar; Erb, Gerald, Sammelvermögen und Stiftung (Baden Baden, Nomos, 1971) 22 ff.Google Scholar

¹⁰⁵ H.C. 387/89 Constitution for the State of Israel v. Ministry of Treasury and Tax income Authority, (1991) P.D. 46 (1) 191.

¹⁰⁶ “Family” should be understood in the broad meaning of the term.

¹⁰⁷ See Wachter, supra n. 8, at 142; Vieli, Diego, Die Kontrolle der Stiftungen insbesondere der Personalvorsorgestiftung, (Zurich, Schulthess, 1985) 3Google Scholar. See also Bremerisches Stiftungsgestz sec. 17; Stiftungsgesetz für Schleswig-Holstein, sec. 19. Nonetheless, for the matter at hand, I will consider both to be synonymous with each other.

¹⁰⁸ Compare the Italian law which deals – although only regarding the question of transformation – with the family foundation. Italian Civil Code, sec. 28

¹⁰⁹ See, for example, Stiftungsgesetz für Baden-Württemberg, sec. 32; Berlinerisches Stiftungsgesetz, sec. 10; Stiftungsgesetz für das Land Nordrheim-Westfalen, sec. 28; Stiftungsgesetz für Schleswig-Holstein, sec. 19; Bremerisches Stiftungsgestz, sec. 17.

¹¹⁰ In Israel there are no statistics regarding private foundations.

¹¹¹ See Hennerkes, Brun Hagen, Binz, Mark, “Die Stiftung als Rechtsform für Familienunternehmen,” (1986) 39 Der Betrieb 2217, at 2218Google Scholar.

¹¹² See Wachter, supra n. 8, at 146.

¹¹³ As mentioned previously, a notarial instrument of endowment is needed to set up a private foundation. There is room to ask whether this requirement is justified. Let us suppose that there is only a contract between the donor and the trustee, will the foundation be considered void due to the lack of formalities? We see again the shortcomings of Israeli law due to the overlapping of public and private foundation in the same law.

¹¹⁴ See Coulson, Noel, A History of Islamic Law, (Edinburgh, Edinburgh University Press, 1964) 169Google Scholar. For the different aspects of the waqf see Anderson, Norman, Law Reform in the Muslim World (London, Athlone, 1976) 162 ff.Google Scholar During the Ottoman period in Palestine Jews also set up foundations according to Muslim law. See Kaplan, Tenenboim, supra n. 2, at 82.

¹¹⁵ See Weisman, supra n. 46, at 381 ff.

¹¹⁶ See below, section VI.

¹¹⁷ See 10 Talmudic Encyclopedia (Shlomo Zevin, ed.), (Jerusalem, Talmudic Encyclopedia, 1961), 351 ff.

¹¹⁸ Palestine Order in Council (1922) (2) Law of Palestine 1918–1925 420, sec. 52, 53, 54). See Kaplan, Tenenboim, supra n. 2 at 77

¹¹⁹ See v. Campenhausen, supra n. 6, at 28.

¹²⁰ The clearest example of this trend was in France, where the civil authorities greatly limited the creation of foundations, even when there was no relationship between the foundation and religious aims; this situation has changed only in the last few years.

¹²¹ Kirchenstiftung is the German term, although the state legislation allows other non-Christian religious communities to set up foundations.

¹²² German Basic Law, GG sec. 140.

¹²³ See Schulte, supra n. 6, at 17; Karg, G., “Das Gesetz zur Änderung des Stiftungsgesetz” Bayrisches Verwaltungsblätter (1996) 449–455Google Scholar; Seifart, v. Campenhausen, supra n. 8, at 479 ff. Compare Härtl, Peter, Ist das Stiftungsrecht reformbedürftig?, (Baden Baden, Nomos, 1989) 80Google Scholar.

¹²⁴ See supra, section IV A.

¹²⁵ After the independence of the State of Israel, and as a consequence of the policy of the State of Israel regarding Arab property belonging to Palestinians that left Israel due to the war, a great number of lands that belonged to Muslim waqfs were placed under state control. Many lands that were waqfs fell within the framework of the Absentee's Property Law (1950) (4 L.S. I. 68) and became “abandoned land” to be administered by the Custodian of Absentee Property. According to sec. 4 (1a).1 of the law “Where any property is an endowment [the reference is to public Muslim endowments existing at that time. P.L.] under any law the ownership thereof shall vest in the Custodian free from any restriction, qualification or other similar limitation.” This legislation undermined the status of the waqf. Thus Muslim Courts have jurisdiction over clear religious foundations like temples, cemeteries and so on, and over foundations whose property is not under the control of the Custodian of Absentee Property. In the last year few waqf were registered in the jurisdiction of Muslim tribunals. See generally Me'eron, Ya'akov, Moslem Law in Comparative Perspectives (Jerusalem, Magnes, 2001) 235, 237 ff (Hebrew)Google Scholar. See also the C.A. 415/89, Darwish v. Absentee Property Custodian, 47 (5) P.D. 521.

¹²⁶ Theoretically at least, the Israeli legislator did not relinquish the power of supervision over religious charities.

¹²⁷ The reformed section 81 of the BGB establishes the elements to be included within the foundation charter: the name of the foundation, the place where it is located, the objectives, the assets, and the composition of the administrative body of the Foundation.

¹²⁸ According to sec. 17 of the Trust Law, supra n. 25, it is established that the statute will include the foundation's conditions also. However, I do not think that we should see the conditions that the donor establishes as a differentiated element, since they are included in the general framework of the foundation determined by the objectives that the donor instituted.

¹²⁹ See Hennerkes, Schiffer, supra n. 6, at 67.

¹³⁰ See Rabello, Alfredo Mordechai, The Gift Law, 5728–1968, (Jerusalem, Harry Sacher Institute for Legislative Research and Comparative Law, 1996) 92 ff (Hebrew)Google Scholar.

¹³¹ See The Israeli Succession Law, supra n. 21, sec. 54. Regarding German Law see Seifart, v. Campenhausen, supra n. 8, at 536.

¹³² See 477/88 Attorney General v. Univ. Tel Aviv (1990) P.D. 44(2) 476.

¹³³ BGB, sec. 83. The reformed section also established that in case the testament does not include the objectives of the foundation or in case the objectives are not fully expressed in the testament, the authority will draw or will complete the objectives of the Stiftung, according to the presumed intention of the founder (the testator) before granting the recognition to the Stiftung. The governmental recognition appears in other legal systems. This is, for instance, the case of the Italian law. See Italian Civil Code, sec 12. See Fusaro, A., “Fondazione”, (1992) 8 Digesto delle Discipline Privatistiche – Sezione Civile 359, at 362Google Scholar.

¹³⁴ See BGB, sec. 2274 ff.

¹³⁵ See BGB, sec. 2301.

¹³⁶ See Sec 17 a (3) of the Trust Law, supra n. 25, remitting to sec 147 of the Succession Law, supra n. 21.

¹³⁷ Note especially the similarity between section 35 of the Israeli Contract Law (general part) (1973), supra n. 45, and section 333 of the BGB. The rights of the third party are created when, knowing about the contract, he does not reject it within a reasonable time. Compare this solution with sec. 7 of the Contract Law, ibid., and sec. 3 of the Gift Law (1968), 22 L.S.I. 113.

¹³⁸ In 1999, the English Parliament enacted a statute recognizing the contract for the benefit of a third party.

¹³⁹ Altruism may be only one of the motives that motivate the donor. Jurists have been debating the real meaning of the animus donandi as a constitutive ground for the foundation since Roman law. Today it is accepted that the intention to make a liberality should not be linked to altruism. A gift made due to utilitarian considerations is no less of a gift.

¹⁴⁰ See Gift Law, supra n. 137, sec. 4.

¹⁴¹ This is not the case in Israel, where only a promise of a gift may be revoked, but not a completed gift. See Rabello, supra n. 130, at 357 ff.

¹⁴² See BGB sec. 81(2). We find a similar solution in Italy. See Italian Civil Code sec. 15.

¹⁴³ Consider the Austrian law, where the donor may revoke the foundation even after its creation. (This right does not exist where the donor is a juristic person). Stern, Elizabeth, “Der Einfluß des Stifters auf die Verwaltung der Stiftung,” in von Campenhausen, Axel Freiherr, Kronke, Herbert, Werner, Olaf, eds. Stiftungen in Deutschland und Europa (Düsseldorf, IDW, 1998) 261, at 263Google Scholar.

¹⁴⁴ The reliance of the trustee is recognized by American law in the framework of sec. 90 of the Restatement 2d. Contracts: “1) Apromise which the promisor should reasonably expect to induce action or forebearance on the part of the promisee or a third person and which does induce such action or forebearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires. 2) Acharitable subscription or a marriage settlement is binding under subsection 1) without proof that the promise inducted action or forbearance.”

¹⁴⁵ BGB, sec. 84.

¹⁴⁶ See 1 Münchener Kommentar, 847.

¹⁴⁷ See Rabello, Alfredo Mordechai, “Responsibility of the Donor for Breach,” (1983) 18 Israel Law Review 118Google Scholar.

¹⁴⁸ Rawer, supra n. 99, sec. 87, at 486 ff.

¹⁴⁹ This is the case, for example, in France, Belgium, Luxembourg and to a certain extent, Spain. See Drobnig, supra n. 18, at 627; Malaurie, Phillipe, Aynès, Laurent, Droit Civil Successions Libéralités (Paris, Cujas, 1995) 188Google Scholar.

¹⁵⁰ See Zandberg, supra n. 14, at 149.

¹⁵¹ See BGB sec. 81(1)(3). See also Wachter, supra n. 8, at 25.

¹⁵² Rawert Staundiger (1995) vorbem. sec. 80 at 373.

¹⁵³ If there is something like the ‘animus donandi’ (and today this notion has been almost completely relinquished), it should not be more than the clear intention of making a juridical act without consideration. In any case we should not seek the personal motivation.

¹⁵⁴ Regarding the interpretation of objectives in German law see Werner, Olaf, “Stiftung und Stifterwille,” in von Campenhausen, Axel Freiherr, Kronke, Herbert, Werner, Olaf, eds. Stiftungen in Deutschland und Europa (Düsseldorf, IDW, 1998) 243–259Google Scholar.

¹⁵⁵ Barak, Aharon, Purposive Interpretation in Law, (Jerusalem, Nevo, 2003) (Hebrew)Google Scholar.

¹⁵⁶ Consider a house that was dedicated to the education of a certain sector of the population that no longer exists.

¹⁵⁷ See Schauhoff, supra n. 8, at 121.

¹⁵⁸ That is, for example, the case in the Netherlands, Greece and Spain. See Andrade, Jorge. García, “Establishment, Amendment and Liquidation of Foundations,” in Schülter, Andreas, Then, Volker, Walkenhorst, Peter, eds. Foundations in Europe (London, The Brookings Institution, 2001) 627, at 652Google Scholar.

¹⁵⁹ See The Trust Law, supra n. 25, sec. 23 (a); BGB sec. 87 (2). Compare Swiss Civil Code, ZGB sec. 86.

¹⁶⁰ BGB sec. 81(1)(4).

¹⁶¹ See Seifart, v. Campenhausen, supra n. 8, at 235, 250.

¹⁶² The sums vary from state to state, but the average sum demanded is 50,000 Euro. See Kirmse, Doreen, “Mindestkapital für unternehmensverbundene Stiftungen?” in Mecking, Christoph, Schulte, Martin, eds. Grenzen der Instrumentalisierung von Stiftungen (Berlin, Mohr Siebeck, 2003) 27, at 39Google Scholar.

¹⁶³ Likewise in Italy. Sweden and the Czech Republic. See García Andrade, supra n. 158, at 645.

¹⁶⁴ The BGB deals only with the Kapitalstiftung referring the Anstalsstiftung to the state regulations.

¹⁶⁵ This form of foundation without its own substantial assets – like the new Bundeskulturstiftung – is heavily criticized in Germany as an abuse of the name “Stiftung.”

¹⁶⁶ In Israel there has been no extensive research about the use of foundation assets, and the way to coordinate the objectives of the foundation with an efficient administration of the property. In fact, many foundations are buildings aimed at charitable purposes and they are administered in an unsophisticated way. Since the control over the foundations is not efficient, there is not enough information to decide to what extent all the foundations administer their assets in what could be understood as an efficient way. Regarding the administration of the foundation's property in Germany see Carstensen, Carsten, “Vermögensverwaltung,” in Stiftung, Bertelsmann, ed. Handbuch Stiftungen (Wiesbaden, Gabler, 1998) 565CrossRefGoogle Scholar.

¹⁶⁷ See generally Hüttemann, Rainer, “Der Grundsatz der Vermögenserhaltung im Stiftungsrecht,” in Jakobs, Horst et al. , eds. Festgabe für Werner Flume (Berlin, Springer, 1998) 59CrossRefGoogle Scholar.

¹⁶⁸ It is perhaps worth pointing out a somewhat subtle distinction accepted in the Israeli law: The donor may give gifts to the foundation like any other person interested in benefiting from the foundation. Apart from this situation, the charter of the foundation may expressly provide the right of the donor to transfer new assets to the foundation. In this case the acceptance of the trustee is not necessary. In German law the charter must provide the foundation with the power to accept gifts.

¹⁶⁹ In Germany the part of the fruits of the endowment which allow to increase the capital (one third of them) is known as “freie Rücklage.”

¹⁷⁰ See Seifart, v. Campenhausen, supra n. 8, at 358. A similar solution exists in Swiss law. See Tuor, Schnyder supra n. 40, at 150.

¹⁷¹ The Trust Law (1979), supra n. 25, sec. 20.

¹⁷² Ibid., sec. 16. A similar solution is adopted by religious courts.

¹⁷³ See Wachter, supra n. 8, at 37 ff.

¹⁷⁴ See for example the Foundation Laws of Baden Württemberg (sec 15), Bayern (sec. 17) Hamburg (sec. 20).

¹⁷⁵ However, this is not always necessary. A foundation in Germany may be administered by a Vorstand, that may be even one person. In this case the difference between the German and the Israeli system will not be significant. See Leisner, supra n. 8, at 105.

¹⁷⁶ Regarding Germany, see Schauhoff, supra n. 8, at 136.

¹⁷⁷ The Trust law (1979), supra n. 25, Sec. 9(a)(1).

¹⁷⁸ In the case of religious foundations, where the founder has not appointed a trustee, Rabbinical Courts tend to appoint the trustee for a limited period – one or two years – before confirming the appointment in order to evaluate the manner in which the trustee manages the foundation.

¹⁷⁹ Bayern law, sec. 27 (1) (5).

¹⁸⁰ Ibid., sec. 27 (1) (7).

¹⁸¹ Law of Baden Württemberg sec. 13 (1) (2).

¹⁸² Ibid., sec. 13 (1).

¹⁸³ Weger, Hans-Dieter, Weger, Magda, Errichtung von Stiftungen des privaten Rechts, in Stiftung, Bertelsmann, ed. Handbuch Stiftungen (Wiesbaden, Gabler, 1998) 973, at 998Google Scholar; Schulte, supra n. 6, at 46 ff.

¹⁸⁴ The convenience of the selbständige Stiftung being administered by a juridical person is recognized in Germany.

¹⁸⁵ See Schulte, supra n. 6, at 77 ff; Schulte, Martin, “Die Mehrfachkontrolle von Stiftungen,” (1996) 49 Die Öffentliche Verwaltung 497Google Scholar; Achilles, Wilhelm-Albrecht, Die Aufsicht über die kirchlichen Stiftungen der evangelischen Kirchen in der Bundesrepublik Deutschland (Tübingen, Mohr Siebeck 1996) 57 ffGoogle Scholar; Zandberg, supra n. 14 at 133 ff.

¹⁸⁶ See Seifart, v. Campenhausen, supra n. 8, at 273 ff.

¹⁸⁷ See Schulte, supra n. 6, at 81.

¹⁸⁸ Weger, supra n. 182, at 1000; See Seifart, v. Campenhausen, supra n. 8, at 303.

¹⁸⁹ A further example of this is the case of the Charity Commission in England.

¹⁹⁰ There is no control over the unselbständige Stiftung, which, as mentioned above, does not enjoy legal personality.

¹⁹¹ See Achilles, supra n. 185, at 95 ff.

¹⁹² See Schulte, supra n. 6, at 82, 93 ff. In countries like Britain the advice to the public regarding conditions and requirements for establishing and managing foundations and non-profit organizations is well developed. The idea is that advice helps achieve better outcomes and complements the control. The public may address all sort of questions to the administrative authorities or may receive information from different internet sites established for this purpose. See Zandberg, supra n. 14, at 27, 55ff.

¹⁹³ See Zandberg, ibid., at 150

¹⁹⁴ See for example Foundation Law of Baden-Württemberg, sec. 9; Foundation Law of Hamburg, sec. 13; Foundation Law of Bayern, sec. 23. See also Büermann, W., “Die Praxis der Stiftungsbehörden,” Stiftungen, Rechnungslegung, Kapitalerhaltung, Prüfung und Besteuerung (Institut der Wirtschaftsprüfer, ed.) Düsseldorf, 1997, pp. 23–59Google Scholar at 40 ff.

¹⁹⁵ See Vieli, supra n. 107, at 27 ff.

¹⁹⁶ See Duddington, supra n. 104, at 9 ff.

¹⁹⁷ The Trust Law (1979), supra n. 25, sec. 40. The task of Public Trustee is carried out by the General Curatorship.

¹⁹⁸ Andrick, Brend, “Sachentsenscheidungsvoraussetzungen in Stiftungsrechtlichen Verwaltungsprozeß,” in von Campenhausen, Axel Freiherr, Kronke, Herbert, Werner, Olaf, eds. Stiftungen in Deutschland und Europa (Düsseldorf, IDW, 1998) 281, at 295Google Scholar.

¹⁹⁹ In case of a Jewish religious foundation the supervisor is appointed by the President of the High Rabbinical Tribunal. Civil Procedure before Rabbinical Courts Ordinance (1983) sec. 22.

²⁰⁰ See Achilles, supra n. 185.

²⁰¹ This is, for example, the case in England. See Charities Act 1993 (c. 10), sec. 1(1). See Parker and Mellows, supra n. 51, at 350.