An arcane institution funded by the dragonmarked houses, the Twelve operates out of a thirteen-tiered keep that floats above the city of Korth in Karrnath. As part of the agreements that ended the War of the Mark, Hadran d’Cannith suggested that the houses work together to create an institute for the application of magic – a foundation that would study dragonmarks and the more traditional forms of arcane magic. The keep was built by Alder d’Cannith, a visionary wizard and master fabricator who used his studies of the sky to determine that the keep should possess thirteen towers. “The moons suggest that the perfect number of dragonmarks is thirteen,” Alder cryptically explained, “but we shall call the institution the Twelve, for the thirteenth mark was cast off long ago.” No one argued with him.
Over the centuries, the institute has been responsible for many arcane advances. the artificers of the Twelve helped develop the airships operated by House Lyrandar, for example, as well as the message stations of House Sivis.
As an arm of the dragonmarked houses, the Twelve attempted to remain neutral during the Last War. However, many of the wizards and artificers of the Twelve had national loyalties that were stronger than their ties to the institute, and they chose to leave to fight in the war. Quite a few fell in battle. Now the the Twelve has resumed normal operations, it seeks to replace its fallen member and make sure that each house is represented.
The Committee of Twelve oversees the institute. The committee actually has more than twelve members; there are twelve dragonmarks, but the split of House Phiarlan and House Thuranni hand the current troubles within House Cannith have caused the membership to fluctuate.
The Twelve has access to a tremendous array of mystical supplies and funding, and the greatest wizards and magewrights of the land fight for workshop privileges at the institute. Advances made at the institute are shared equally among the houses, although there are always rumors of one or more the the houses, diverting funds for secret projects or attempt to conceal valuable discoveries.
King Galifar I, not completely convinced of the dragonmarked houses’ neutrality and outlook, established the Arcane Congress as direct competition for the Twelve. Today, the two institutes of magical studies engage in a more or less friendly rivalry for resources, students, and arcane discoveries.
-Eberron Campaign Setting 3e (paraphrased in places)