Cross-article: Philanthropy and Solidarity Finance
Philanthropy
The French philanthropy market today represents 16 billion euros distributed anually by associations and foundations to causes of general interest1. But philanthropists no longer limit themselves to simple donations. Donations from the French (individuals and businesses) account for just over 8.2 billion euros each year.
Both companies and individuals can get involved to support the causes they care about by making donations to associations or by creating a family or corporate foundation (or an endowment fund). The number of foundations and endowment funds is growing rapidly, highlighting the desire of philanthropists to move from occasional generosity to sustainable and structured generosity. In 2024, there were 5,647 active endowment funds and foundations in France2. Furthermore, among the companies involved, we see that philanthropy is no longer the exclusive domain of large listed companies, and very small, small, and medium-sized enterprises (SMEs) are increasingly involved, often at a local level. While solidarity and health issues remain popular themes, the environmental cause is growing rapidly.
The profile of philanthropists is evolving: they are no longer solely driven by a sense of traditional charity, which translates into a few occasional donations to large charitable organizations once a year, without follow-up on their donation. 21st century philanthropists are transforming into "philanthropreneurs": generous souls who practice philanthropy like running a business, following a business plan, a strategy, and wishing to measure the impact of their donation concretely through specific performance indicators. We observe a hybridization of philanthropy: donors continue to make donations, and this is increasing. A donation is absolutely free and without any return. However, these philanthropists are now tending to include an impact dimension in the management of their wealth, using financial instruments that combine social utility and financial profitability.
Solidarity Finance
Whereas green finance focuses on environmental and climate issues, solidarity finance focuses on funding projects with social impact: access to employment, access to housing, entrepreneurship in developing countries, etc.
On one hand, there are project holders with a strong social impact (foundations, associations, cooperatives, etc.) who need funding. On the other hand, we find banks, insurance companies, mutuals, and asset management companies that finance these projects either directly or through the marketing of solidarity products.
Similar to Green Finance with the "Green Fin3" label, solidarity finance has its own "Finansol" label. Created in 1997, this label is based on strict solidarity criteria aiming to:
Ensure that savings are directed towards solidarity projects and actors.
Ensure a substantial solidarity contribution.
There are two types of solidarity savings products:
Solidarity investment products, where the amounts invested are used to finance projects of social utility.
Sharing products, for which at least 25% of the generated interest is donated to an association.
Solidarity finance has many advantages:
Diversification of supported causes: education, housing, health, poverty and exclusion reduction.
Geographic diversity: support for projects in regions, including international initiatives.
Variety of financial instruments: from guaranteed capital savings accounts to investment products that may involve capital risk.
Some of these investments may also, at a specific date and under certain conditions, provide tax benefits.
These advantages explain the growth of solidarity savings, which reached a total of 30.2 billion euros in 2023 (in France), according to the 2024 solidarity finance barometer. This represents an increase of nearly 4 billion euros compared to 2022, a rise of 15%. (+15%)4
Beyond solidarity finance, innovations continue to emerge to support the nonprofit sector. Among these financial sector initiatives, we find:
Charitable credit cards, where each use triggers a donation to the chosen association by the client, and the charitable organization's logo appears on the card.
Funds that allocate a portion of their management fees to support the nonprofit sector.
Charitable investment products whose financial support will be linked to the performance of the products and markets.
Similar to the rounding up at the cash register, rounding up on salary, etc. offered by large retailers, these initiatives aim to simplify donations while enhancing the visibility of the nonprofit sector. These diverse and innovative approaches reflect a growing desire to integrate the solidarity component into the financial world.
Croisine Martin-Roland
Head of Philanthropic Support Societe Generale Private Banking.
Jean-Christophe Jouannais
Sustainable Finance Engineer at Societe Generale Private Banking.
3 Green Fin: Created by the ministry, the Greenfin label guarantees the green quality of investment funds and is aimed at financial actors who work for the common good through transparent and sustainable practices. The label has the particularity of excluding funds that invest in companies operating in fossil fuels.
4 2024 Edition: +15% for solidarity finance and growing attractiveness among the French
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