THE DE BROU

DE LAURIÈRE

ENDOWMENT FUND

Financial years 2018 to 2022

Organisation receiving donations

February 2025

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Executive Summary

An endowment fund dedicated to medical research and patients,

governed by clear rules that can be improved

Keen to dedicate his fortune to philanthropic causes, Mr de Brou de Laurière established

an eponymous endowment fund in 2010

—

in the absence of a foundation recognised as being

of public benefit under the auspices of the Fondation de France

—

and designated it as his

universal legatee. The fund was entrusted with using the income from its non-consumable

endowment to support medical research and provide assistance to patients and the elderly.

Since its creation, the endowment fund has benefited from stable governance, which still

includes close associates of the founder. It has adopted clear statutory rules, respecting

collegial decision-making within the board of directors and ensuring that decisions are informed

by consultative bodies made up of experts.

However, the practical implementation of these principles needs to be better ensured on

a day-to-day basis. For example, the work of the board of directors' office, a body not provided

for in the bylaws, is not subject to any transparent traceability or formal reporting to the board,

even though its activities are presented as being supported by the fund's managers.

Similarly, the endowment fund has set up advisory committees, taking care to appoint

qualified members with solid professional experience in their respective fields. In practice,

however, it does not take sufficient advantage of the technical added value that these advisory

bodies can bring.

Finally, the fund has not yet defined a code of ethics or adopted effective mechanisms

to prevent conflicts of interest, even though its local roots and essentially regional scope mean

that it works from a limited pool of contacts.

Following the audit by the Court of Accounts, the endowment fund undertook to make

the necessary improvements in these areas without delay.

A comfortable financial position, reflecting excessive hoarding

to the detriment of resources that could be allocated to the fund’s

charitable mission

The endowment fund received a bequest of property assets formerly owned by the

founder, including a listed private mansion that cannot be sold. Its renovation and major

maintenance have been costly to date and will continue to represent a significant financial

burden in the future. It also received significant financial assets. At the end of 2022, it had a

securities portfolio worth over €30 million.

Thanks to its non-recoverable association funds (initial endowment and additional

endowments) amounting to €28.2 million —

which remained largely stable over the period

under review

—

and the income they have generated since its creation in 2010, the endowment

fund is in a comfortable financial position, with net cash of nearly €31 million at the end of 2022.

In addition, its reserves for charitable projects increased by nearly 45 % over the period under

review, reaching €6.3 million in 2022 (compared to €4.4 million in 2018).

Despite this strong balance sheet and sound financial management, albeit without a

professionally established strategy, the annual amount of aid distributed during the period

under review fell significantly (-52 %). In addition, the fund's current operating expenses and

structural costs related to its real estate assets were significantly higher each year than the

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financial aid granted. This situation is in breach of the obligations imposed on endowment

funds to actively serve the public interest that justified the significant tax advantage attached

to the bequest received from the founder.

This circumstance is largely attributable to the choices made by the founder himself when

setting up the fund. The management costs of the fund and its allocated assets, which are of

a similar scale to the operational capacity provided by its financial income, raise questions

about th

e relevance of the model chosen to fulfil the founder’s philanthropic intentions. The

fund should consider how it can serve this cause more effectively. In reality, it is the fund’s

business model that needs to be rethought in order to best serve the found

er’s philanthropic

intentions, rather than adhering to an original framework that has proven to be unsuitable.

Overall, the endowment fund recorded a cumulative net profit of €2.2 million over the

five-year period under review, reflecting an approach that goes beyond the legitimate caution

expected of managers of a non-consumable endowment fund. Such a situation is more akin

to excessive hoarding, which in practice comes at the expense of the fund’s charitable

activities.

Charitable activities that need to be expanded and better assessed

Since the endowment fund was set up, the total financial aid paid to medical research

and patient support has amounted to €2.2 million. The annual volume of financial aid paid out

has thus averaged around €200,000 since 201

0, as in the financial years examined.

This situation is the result of a deliberate choice by the governing bodies, which believe

that the budget allocated to aid for associations should not exceed €200,000 to €300,000 per

year. Such a ceiling may be considered too restrictive in view of the fund's financial capacity

and its duty to give priority to the social mission for which it was created. The high level of its

reserves, which have grown significantly in recent years, undoubtedly gives it the means to

further develop its charitable activities, while maintaining sufficient safety margins to cover the

needs of both the fund's day-to-day operations and the maintenance of its real estate assets.

Following the audit by the Court of Accounts, the endowment fund's managers were keen

to highlight the efforts made at the end of the period under review to significantly increase the

annual budget allocated to aid payments (€280,000 paid in 2023; approximately

€400,000

allocated by the board of directors at its June 2024 meeting). It is important that this

momentum be maintained in the years to come.

To this end, the fund must strengthen its outreach efforts, which, to date, have been

limited to simple calls for applications on its website and to networking opportunities explored

by members of its governance bodies. Its development efforts, which must be supported by

more active contributions from the advisory committees

–

primarily the scientific committee

–

will also help to prevent conflicts of interest by seeking potential beneficiaries beyond the

traditional, mainly regional pool explored to date.

Finally, by providing itself with the means to establish a streamlined support system for

project leaders

—

once again drawing on the expertise of the scientific committee

—

the

endowment fund will be able to both improve the quality of applications submitted, foster

innovation and further diversify the types of initiatives it supports, and strengthen its capacity

for impact measurement and evaluation of the aid it provides.

The necessary procedural and operational improvements (management of conflicts of

interest, expansion of outreach, definition of a management strategy, better project monitoring,

etc.) are not optional recommendations that the fund can choose to disregard on the grounds

of lacking staff or expertise to implement them. They are minimum quality standards for

processes, and only their proper application can ensure that the fund operates in the public

interest, as required by the tax benefits granted upon its creation.

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Opinion of compliance with reservations

Following its audit of the financial years 2018 to 2022, in light of the procedures it has

carried out and within the limits of its powers under Article L. 111-10 of the financial courts

code, the Court of Accounts finds that the expenditure incurred by the de Brou de Laurière

endowment fund during the years under review is consistent with the objectives it pursues in

accordance with its bylaws.

However, the Court issues the following reservations:

-

the financial aid paid in pursuit of the fund's corporate purpose represented, each year

during the period under review, a minority share of operating expenses, with

expenditure being mainly devoted to covering current operating expenses and

structural costs related to the real estate assets held;

-

the reserves for charitable projects, which increased by 45 % over the period under

review to reach €6.3 million at the end of the 2022 financial year, reflect excessive

hoarding to the detriment of the fund’s charitable activities and the public interest

purpose that justified the granting of the tax benefit linked to the bequest received upon

the fund’s creation.