Opening Up to Charity

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The rise in philanthropy helps fill growing funding gaps across Europe. Budget deficits have been on the rise since the 1990s owing to economic downturns and rising health and retirement costs. As a result, France, Spain, Belgium, Britain and Germany have introduced new laws — including bigger tax breaks — that encourage philanthropy. Scheubeck, for one, says the tax changes made the idea of creating his foundation "more interesting."

The new giving spirit isn't based on just pragmatism. A generational change in Europe's wealthy families has contributed to new charitable attitudes. As the entrepreneurs who rebuilt postwar Europe retire, many want to give back some of the bounty they have enjoyed. In a survey of 1,600 of the newest German foundations, the Bertelsmann Foundation found that more than 60% of them were set up by people over 60 years old--42% of whom don't have children.

Bertelsmann's Reinhard Mohn, 83, does have children, including a daughter who is active in the foundation and a son who works at the company. And the way he set up his foundation as the firm's major shareholder means the family will continue to have an influence in the business even after his death. That's controversial. Some managers at the company have criticized the role played by his wife Liz, 63, in the recent ousters of two top executives. But Mohn is committed to his vision of improving society and he wanted the Bertelsmann Foundation — unlike many U.S. foundations that limit their activities to providing grants — to have a hands-on role. The foundation, set up in 1977, funds only projects that it runs; its stated ambition is to influence the future shape of Germany.

Bertelsmann's latest project aims to shake up the school system. Mohn argues that German children leave school without life skills because of a stifling bureaucracy that eschews contact with the outside world. The foundation has been running two pilot projects in the company's home state of North Rhine-Westphalia in cooperation with the Education Ministry. The first project looked at education in 52 schools. The second, which started in 2002 in 278 schools, includes a scheme to retrain 5,000 teachers and give school heads greater autonomy. At the Otto Hahn secondary school in Herford, near Hanover, the changes have given director Achim Korbitz the chance to be creative in working with local companies. A kitchen-appliance firm sent apprentices to the school to practice making service calls in English with the students as a way of showing them that "there's more to language instruction than MTV English," says a teacher there. That helps train both the students and the apprentices. "We're making use of our room to maneuver," Korbitz says.