30 Aug 2024 What is the Dotation d’Action Territoriale ?

The number of people living below the poverty line in France has increased by more than one million over the past 15 years. This rise primarily affects young people: among the 1.3 million people who have fallen into poverty over these 15 years, more than 70% are young people and children ! Today, France has nearly 9 million poor people, more than half of whom are children and young people!

The state alone cannot reverse this trend. That’s why the Break Poverty Foundation is calling on companies to get involved. After three successful pilot tests in Romans-sur-Isère, Nantes, and Béthune, Break Poverty is deploying its corporate mobilization initiative against poverty: the Territorial Action Grant (DAT). You can find all the details of the Romans-sur-Isère pilot project here.

What is the Dotation d’action territoriale (DAT) ?

It is an alliance between public, private, and non-profit actors serving disadvantaged youth.

The DAT is an innovative system aimed at mobilizing local businesses to fund associative projects that combat social determinism affecting youth in their areas. To achieve this, the Break Poverty Foundation has developed a methodology to overcome barriers to territorial patronage. It relies on 4 key steps :

1. Conducting a territorial diagnosis of the needs related to youth poverty.
2. Identifying and selecting relevant and high-impact projects to address local needs.
3. Mobilizing local businesses to finance, according to their choices, the identified projects.
4. Monitoring and measuring the impact of these projects.

Proven Results from 3 Pilot Territories

The first three DATs demonstrated the relevance of the system and prepared the deployment strategy :

• In Romans-sur-Isère, nearly 15 companies committed €700k over three years to support 6 associative projects, helping 1,000 disadvantaged youth.
• In Nantes, 22 companies and foundations committed over one million euros to support 9 projects, ultimately benefiting 10,000 young people.
• In Béthune, about ten structures decided to support 5 projects with €350k, helping nearly 1,000 young people.

In these three areas, beyond the number of youths reached, two other key effects are generated by the DAT:

• Territorial patronage is strengthened, with nearly 36 % of partner companies contributing for the first time to territorial patronage. Small and medium-sized enterprises are particularly involved, representing nearly 71 % of donations (compared to 46 % nationally).
• The operational capacity of associations is enhanced thanks to DAT support. Each association receives an additional 30k €/year and on average 3 to 4 new business partners. This additional support strengthens their economic sustainability (for 80% of them) and facilitates scaling up (for two-thirds of them).

Expansion to 50 Territories by 2022

By early 2021, 10 territories are already engaged in a Territorial Action Grant. Our goal now is to scale up by supporting 50 territories by 2022 to benefit 100,000 disadvantaged youths. More broadly, this expansion will contribute to scaling up corporate social patronage in France and enhance the professionalization of non-profit actors in the territories.

Potential for a Major Shift in Social Patronage

By deploying this system across 50 territories, the Break Poverty Foundation aims to anticipate a regulatory evolution that could amplify social patronage in France. Similar to the CSR Act implemented in India, which scaled up corporate involvement in social patronage, the Break Poverty Foundation hopes to influence the regulatory framework by encouraging companies to allocate up to 2% of their net income to social actions. 2% is seen as a proportion that would fund concrete actions in the company’s environment and align with the imperative of social responsibility. The state encourages and supports this mobilization with a significant tax advantage. The grant benefits from the tax incentives provided by the Aillagon Law, which allows companies to enjoy a 60% tax reduction on their donation amount. Assuming a 2% commitment of net income, the cost to the company would be only 0.8% of its net income.

Companies will simply be asked to report annually on the social investment they have made under the DAT and the local results achieved. If they choose not to make this grant, they will need to provide the reasons for their decision.

Video credit : Break Poverty’s team.