Social projects are being denied vital investment because of restrictions on European philanthropic foundations, according to the Philanthropy Europe Association, Philea and impact investing network, Impact Europe.
Last week they made four requests to the European Parliament, which they say would remove restrictions and boost philanthropies’ social investment.
Restrictions in some countries currently include losing tax breaks if philanthropies make investments with their programme money (the one to five per cent of their money, on average, that is usually donated).
Many philanthropies are also restricted from socially investing their endowment (the majority of their money), because of rules around charitable organisations needing to maximise financial returns. Financial returns on social investments are often expected to be lower than other investments, even though that is not necessarily the case.