In France today, only 9% of enterprises fulfill philanthropic work and 18% of them commit themselves to projects focusing on social mobility. Local enterprises want to act but more often than not, they do not have the means to correctly identify the worthwhile projects and to follow their development.
As a result, to offer a solution, the Break Poverty Foundation has created the Local Endowment Fund Against Poverty: a strategy aiming to encourage a philanthropic spirit in the heart of enterprises by focusing on programs that specifically combat poverty amongst the youth in the context of their own territories.
How does the Local Endowment Fund Against Poverty work? Break Poverty carefully selects and proposes projects and continuously follows their development, giving enterprises the opportunity to engage themselves durably against poverty. To be most efficient, the foundation follows a thorough strategy composed of four steps :
Defining the priority needs to put forth to prevent poverty
Selection of key projects based on the following criteria: need / efficiency / potential change in social mobility / stability of the organization
Each enterprise engages itself to support one or more local projects for the duration of three years
A development rapport made available each semester for enterprises
Our ambition, through the Local Endowment Fund Against Poverty, is to create innovative territories where local enterprises and associations can collectively work together to durably prevent poverty in the lives of their own young population.
In order to show the local actors the impact their continuous engagement can have on a territory, Break Poverty Foundation has tested the Local Endowment Fund Against Poverty at Romans-sur-Isère, where the statistics of poverty are much superior than the national average: 25% of the population is poor and the rate of school drop-outs is twice as high than the French average.
With the Mayor’s support, more than fifteen local enterprises have been mobilized. The results of this project for the year of 2018 speak for themselves.
In just a few weeks, more than one million euros have been collected to finance six projects during the duration of three years: an online university allowing local young graduates to pursue their university studies from the comfort of their own homes, a project offering teenagers with no degree a formation to become technicians, a project aiming to support children to prevent school drop-outs from a young age, etc.
After such success, Break Poverty Foundation has now deployed its strategy on two other territories: Nantes and Béthune
The current experiment at Romans sur Isère, Nantes and Béthune is the first step towards the national progressive implementation of the strategy. Indeed, the Break Poverty Foundation would like to legislate this strategy in 2020.
What shape would the Local Endowment Fund Against Poverty take on a national level? It would consist of a voluntary monetary allocation going up to 2% of the enterprise’s net profit, directed towards programs developed on their own territory that aim to combat poverty and the youth’s socio-economic exclusion.
2% because this proportion would allow enterprises to finance concrete projects in their own environment, and foster a sense of duty and social responsibility towards their neighbors. Voluntary, because there would be no legal obligation to make any donation. Each year, enterprises would be asked to communicate the amount of their donation as well as their desired results in their statements. If they did not wish to participate, they would simply be asked to indicate it in their statements. The uniqueness of these donations is that each enterprise would have the flexibility to decide which local projects to support, all aiming to bettering the lives of their youth.
These donations would also have tax advantages due to the Aillagon law, which allows enterprises to benefit from a tax reduction of 60% on the sum of their donation. The real cost for the enterprise would thus only be 0.8% of their net profit.
According to certain economists’ predictions, if large enterprises contributed 1.5% of their net profit, more than one billion euros could be collected to combat poverty which currently has grave detrimental impacts on the lives of France’s youth.
Credits : Andrew Ibrahim, Unsplash.