THE VALENTIN HAÜY

FOUNDATION

Fiscal years 2017 to 2020

Organisation funded by public charity

June 2023

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Executive Summary

A foundation that has struggled to emancipate itself from its founder

The Valentin Haüy Foundation (VHF) for Blind and Visually Impaired People, founded by a donation

of nearly €95 million in assets from the Valentin Haüy Association (VHA) and recognised as a

charitable association on 29 July 2012, has in its articles of association, in addition to supporting the

work of the VHA and other associations working with and for people with visual impairment,

missions that have been little undertaken despite its ten years of existence, such as hosting shelter

foundations under its aegis, enabling the integration of other associations serving blind and visually

impaired people, and promoting the rights of people to equal opportunities.

The foundation’s current articles of association keep it under the influence of the Valenti

n Haüy

Association, derogating from the principle of the foundation’s independence from its founder,

particularly in the context of two funding protocols for 2013-2015 and 2018-2020. This

independence must now be guaranteed by the necessary amendments to the articles of association

and must no longer be circumvented by new contractual provisions.

What is more, the crisis that the association went through between 2016 and 2018, which led to the

use of the second protocol, has had an impact on the stability o

f the foundation’s board of directors.

This has led to irregularity in holding board meetings and has not encouraged the growth of the

foundation’s activities.

This dependence has also resulted in insufficiently selective and documented procedures for the

funding allocated to the VHA. As a result, the foundation usually selects all the projects proposed by

the association. The agreements between the foundation and the association for each of these

projects during the period audited by the Court lacked precision and left too much room for

manoeuvre to the association, making

ex-post

evaluation of the projects difficult. Progress was

nevertheless noted from 2020 onwards. At the foundation’s request, the association has provided

reports on the implementation of these agreements and the foundation has set criteria for

evaluating the projects. Correspondingly, assistance to beneficiaries other than the Valentin Haüy

Association accounted for a small proportion of jobs during the period under review. However,

during the discussion with the Court, the foundation reported a significant increase in funding

granted to other beneficiaries in 2021 and 2022.

A reading of the minutes of the governance bodies shows that the foundation did not actively look

for associations or foundations to place under its aegis, which could have led to the organisation of

the highly dispersed community of associations that work with and for the visually impaired

community. Nor has the foundation developed an independent strategy for collecting donations or

bequests, contrary to expectations. Only one foundation, the Stargardt foundation, appeals for

donations via campaigns, albeit for an objective that does not correspond to its achievements, and

another, the APAM Foundation, inheriting the fame of its founder, the APAM Association, regularly

benefits from bequests.

The splitting up of associations active in the field, but also the attachment of each to its history and

independence, seems to limit the prospects for the VHF to host other shelter foundations under its

aegis. In any event, the foundation must be aware of its control obligations with regard to the

activities of those already under its aegis.

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Shortcomings in the treatment of obligations relating to appeals for public

donations

With

assets of around €100 million, the foundation’s main activity is the management of its assets,

both in terms of immovable and movable property. The size of the sums involved contrasts with the

modest amounts raised from donations and bequests, around €1 mi

llion in 2017 and 2018, and half

that amount in 2019 and 2020.

From the outset, the foundation has exempted itself from its obligations under the law of 7 August

1991. Considering that it was not appealing to the generosity of the public, it refrained, throughout

the period under review from filing a prior declaration of appeals for donations, even though it

offers the possibility of making a donation on its website. Above all, it appends to its financial

accounts a use-of-funds statement that is incomplete in more ways than one. Bequests are not

properly accounted for and the income from the assets of its founding endowment is not recorded

as public donations.

However, the assets that made up the donation made by the Valentin Haüy Association to the

eponymous foundation in December 2011 came from public donations to the association.

Consequently, all

of the foundation’s assets, as well as the income derived from them and the

resources collected by the VHF from the public, fall within the scope of the Law of 7 August 1991. As

a result, financial income, such as rental income from the assets making up the initial endowment,

should be included under resources from public donations in the use-of-funds statement. The

legacies received by its sheltered foundation APAM were recorded in the use-of-funds statement as

sums received from public generosity for the years 2017 to 2019, but it did not tracked their use or

carry forward. The VHF simply omitted them from the use-of-fund statement in 2020. However, in

the absence of proof that they were not requested by the association which subsequently placed

itself under its aegis by becoming a sheltered foundation, the VHF had to record them in the

accounts of the use-of-funds statement as resources, and specify how they were used (allocated for

use that year or carried forward to the following year) over all these financial years. The foundation

also had to consider the investment income from these bequests as coming from public charity.

As a result of these omissions, there are many gaps in the contents of the VHF’s use

-of-funds

statement. This accounts for only a residual portion of the resources generated by public donations.

More generally, the obligations associated with appealing to public for donations, particularly in

terms of financial communications to donors, are not being met.

Appropriate asset management procedures

As it has had an investment charter since 2014 as well as a reference framework adopted by the

board of directors at the end of 2018, the foundation manages both its immovable and movable

assets in a professional manner. It relies on expert firms and mandates a specialist banking

institution to manage its dedicated mutual fund (FCP). The structure of its assets is characterised by

a predominance of property and equity investments. Following a review of its portfolio, the

foundation has somewhat expanded its investment universe to include private debt and private

equity. Overall, the management of its portfolio is consistent with its very long investment horizon.

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Recommendations

The Court is making the following audit recommendations:

1.

Put an end to the provisions of the articles of association which give the founding Valentin

Haüy Association control of the foundation;

2.

Ensure the independence of the Rétina sheltered foundation from its founder, the Rétina

France Association

,

so as not to support only the research projects of its founder;

3.

Include in the use-of-funds statement, both in uses and in resources, the amount of

bequests received for each financial year by itself or its sheltered foundations, as well as

financial income, rents and capital gai

ns from the sale of assets from the foundation’s initial

endowment and from the management of bequests;

4.

Inform the public of the use made of the proceeds of the public appeal for donations

entered in the use-of-funds statement;

5.

Formalise the issue of tax receipts.