Outlining Italian bank foundations

Abstract

In Italy, there are 88 bank foundations that vary widely in terms of their size. Their appearance in the Italian economic landscape has been the result of a deep legislative process of reform involving the banking system during the 1990s. As a result of this process, Italian bank foundations were set up as private legal organizations with statutory and management autonomy, charged with the pursuit of only philanthropic purposes in the interest of the territory. They are allowed neither the exercise of business activities nor the performance of credit functions and are also excluded from any form of financing, disbursement, or subsidy involving entities with a profit intent. Their business comprises two major areas of activity: asset management activity, aimed at maximizing the return on investment of the assets, and grant-making activity, focused on the maximization of value for the territory. Asset management and grant-making activity are closely linked. With regard to the former, net assets are invested to obtain the funds needed to finance interventions in favor of the local community. With regard to the latter, those funds are then used within the foundation’s chosen areas of intervention. Amounts disbursed, sectors of intervention, manner of action, and beneficiaries vary depending on size and geographic area.