Cross-article: philanthropy meets solidarity finance
Philanthropy
The philanthropy “market” in France today represents €16 billion in donations made to public interest charities . Companies and individuals alike can support a cause close to their hearts by donating to charities or by creating a corporate or family foundation (or endowment fund). There has been a significant uptake in such foundations and funds, as philanthropists increasingly favour long-term, structured generosity over occasional donations. In 2024, there were 5,647 active foundations and endowments fund in France alone . We also observe how corporate sponsorship is no longer the preserve of publicly traded corporations: more and more SMEs and micro-enterprises are getting involved, especially at local level. While solidarity and health remain popular causes, there has been tremendous interest in environmental causes.
A new profile of philanthropists is emerging; philanthropists who are no longer driven by charity for charity’s sake, making a few one-off donations to major charities once a year without any follow-up on their contribution. We are now seeing 21st century “philanthropreneurs” — generous souls who approach philanthropy as they would a business, with a business plan, a strategy and performance indicators to quantify the true impact of their donations. We also see a hybridisation of philanthropy, as traditional donors continue to make donations — and increasingly so. A donation can be made freely and no strings attached. However, today we see a trend among philanthropists to include impact considerations in their wealth management via financial instruments that combine social utility with financial returns.
Solidarity Finance
While green finance focuses on environmental and climate-related efforts, solidarity finance is used to fund projects with a positive impact on society: access to employment, housing, entrepreneurship in developing countries, etc.
On the one hand, it connects high social-impact projects (run by foundations, associations, cooperatives, etc.) that need financing with — on the other hand — banks, insurance companies, mutual funds, and asset managers that can provide financing either directly or via the solidarity products they sell.
Like the Greenfin label for green finance, solidarity finance has the Finansol label. Created in 1997, Finansol imposes strict solidarity criteria to:
- Guarantee that savings go towards socially-responsible projects and players;
- Ensure a substantial contribution is made to solidarity efforts.
There are two types of solidarity savings products:
- Solidarity investment products: invested funds used to finance socially beneficial projects.
- Income-sharing products : at least 25% of interest generated is donated to a charity.
Solidarity finance offers numerous advantages:
- Multiple causes: education, housing, healthcare, the fight against poverty and social exclusion.
- Geographic diversity: local, regional and international projects.
- Variety of financial products: from savings accounts with guaranteed capital to investment products that may carry capital risk.
- Currently, and under certain conditions, some of these investments may be eligible for tax breaks.
These benefits have led to the growth of solidarity savings, which in France totalled €30.2 billion in 2023, according to the 2024 Solidarity Finance Barometer. That’s almost €4 billion more versus 2022 — a 15% increase3!
There is also a steady stream of innovations aimed at supporting the non-profit sector. Innovations in finance include:
- Charity credit cards, allowing users to donate to the charity of their choice, the logo on their card, with every transaction.
- Funds that allocate a portion of their management fees to the non-profit sector.
- Investment products supporting charitable causes, indexing financial support to the performance of the products and the markets.
Just like certain major retailers allow you to round up at the till, or round down your pay in the case of certain employers, these diverse and innovative solutions make it easier to donate while giving greater visibility to charities.
More importantly, they clearly reflect a growing trend towards making solidarity a prominent feature in the financial landscape.
3Source: Green Fin: Created by the French Ministry for Energy Transition, the Greenfin label certifies “green” investment funds and is geared towards financial players working towards the common good through transparent and sustainable practices. Unique to this label is its exclusion of funds that invest in companies with operations in fossil fuels.
4 Source: 2024 Edition: +15% for solidarity finance and growing appeal for French investors (in French)
5 Source: SG donates nearly €4 million to charities in 2023(in French)
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