A Bridge between philanthropy and investors
Within the Italian impact investing landscape, an innovative financial instrument has emerged to concretely connect philanthropy and the market: the Impact Grant, conceived and piloted in 2022 by Fondazione Social Venture Giordano Dell’Amore (FSVGDA), the operational and strategic arm of Fondazione Cariplo. Its goal is to promote a culture of impact finance in Italy. The Foundation designed and structured a hybrid financial instrument positioned between a grant and equity. “The Impact Grant is, first and foremost, a bridge between the philanthropic world and the world of investors. This is a fundamental aspect and lies at the heart of our mission, as we come from a philanthropic institution and aim to operate both within the entrepreneurial third sector and among more advanced market players who are attentive to the social benefits generated by their economic activities,” explains Diego Dagradi, Lead Manager at Fondazione Social Venture Giordano Dell’Amore. The structure allows a portion of the investment to be converted into a non-repayable grant upon the achievement of pre-agreed social impact targets, significantly incentivizing results while simultaneously strengthening the beneficiary’s capital base.
The first application: the Case of Vesti Solidale Social Cooperative
The first application of the Impact Grant was implemented with the support of the legal office of Confcooperative and Studio Gattai, through an investment by FSVGDA in Vesti Solidale. The transaction — a €300,000 capital increase — was carried out within the framework of Impact4Coop, the program promoted by Fondazione Social Venture Giordano Dell’Amore in synergy with Fondazione Cariplo to support the recovery and strengthening of the cooperative sector.
Vesti Solidale is a social cooperative active in personal, environmental, and social services, with a strong focus on the work inclusion of disadvantaged individuals. It operates in the circular economy and environmental protection sectors, promoting sustainable consumption models through the management of the entire textile recovery supply chain: from collection and sorting to reuse as second-hand clothing. The initiative contributed to the creation of the largest Italian social economy facility in the sector, with a recycling capacity of up to 15,000 tons per year.
The structure of the transaction: equity and a self-extinguishing component
The investment in Vesti Solidale was carried out through the subscription of shares as a financial partner.
Specifically:
-
€200,000 in standard financing shares
-
€100,000 in “self-extinguishing” financing shares
Upon the achievement of agreed conditions, the self-extinguishing shares will be allocated to the Cooperative’s indivisible reserve. If the Cooperative does not meet the agreed objectives, these shares will lose their extinguishable characteristic and retain the prerogatives of standard financing shares. To date, the Foundation has completed six investments using the Impact Grant structure, for a total value of €855,000, of which €300,000 in self-extinguishing shares.
A flexible and replicable instrument
“The Impact Grant is therefore a hybrid instrument — highly versatile, flexible, and adaptable to different needs. It expands the range of solutions available to investors and can also be used simultaneously by multiple parties, with varying proportions of equity and grant depending on their nature and objectives,” concludes Diego Dagradi.
