Sixty Italian banking foundations have committed themselves to set up a Foundation for Southern Italy by October 2006, with another 25 expected to join. Additional founding members will come from the Forum del Terzo Settore, an umbrella organization covering the voluntary and third sector in Italy.
The decision to set up a new foundation was motivated by the small number and limited size of banking foundations in southern Italy. The long-term purpose of the Foundation is to foster the social infrastructure and social capital of the region. It will operate in two main ways. First, it will solicit proposals from NGOs for outstanding and replicable projects in areas such as social assistance, cultural heritage, education of young people and social integration of immigrants. Second, it will create several community foundations to promote the development of local communities.
The Foundation’s endowment – roughly €300 million, of which €200 million is to be provided by banking foundations and €100 million by Italian voluntary organizations – will make it the second largest banking foundations in southern Italy and among the first 30 in Italy as a whole. In addition, the 85 foundations will between them grant a further €25 million each year.
Curiously enough, this money has its source in a legal controversy. In 1991, a legal provision made it compulsory for the banking foundations to set aside money to provide services to voluntary organizations (training and consulting on legal and fiscal matters, organization and so forth). In 2001, the regulatory authority cut this by half, which resulted in a lawsuit between the voluntary organizations and the authority. The banking foundations offered to settle the dispute by restoring some of the money for services and devoting the rest (€25 million a year), and what had accrued pending the Court’s decision on the matter, to the new foundation. The voluntary organizations in turn offered to devote their share of the accrued funds – €100 million – to the same purpose.
To my knowledge this is the first time in Italy that a new foundation has been born out of a legal wrangle: all’s well that ends well!
Stefano Marchettini is General Manager of ACRI (Association of Italian Banking Foundations). Email email@example.com