By Lucia Graves

Historically focused on local activities, Italy's banking Fondazioni are now looking further afield to increase funds for culture.

The La Scala opera house in Milan, the Ghirlandaio-frescoed Cathedral in San Gimignano and the Ducal Palace in Modena have one important thing in common: they have all been the beneficiaries of grants from the philanthropic banking foundations born out of Italy's local development banks, particularly the Casse di Risparmio.

The Casse di Risparmio (literally meaning savings banks) date from the early 19th century, when they were established to lend money locally and to plough the profits back into the community. Following government reforms in the 1990s, the Casse di Risparmio were privatized and their charitable and commercial roles were separated.

Their capital was put in the hands of specially created foundations, which inherited the philanthropic role of the Casse di Risparmio. Soon after, other private investors were also allowed to buy shares in the Casse and now only very few of the foundations still own a majority share of their related banks.

In 2002, the 89 banking foundations had endowment funds of some €37 billion ($46 billion), 62 percent of which was invested outside the banks - while 11 of the foundations no longer have any capital in the Casse at all. Considerably more than half of the €37 billion capital resides in the six largest institutions: the Fondazione Cariplo, the Compagnia di San Paolo, the Fondazione Monte dei Paschi di Siena, the Fondazione Cassa di Risparmio di Verona Vicenza Belluno e Ancona, the Fondazione Cassa di Risparmo di Roma and the Fondazione Cassa di Risparmio di Torino.

So these days it is the independently endowed foundations that distribute patronage worth on average nearly €1 billion a year, around half of which goes to art, culture and education, and the rest to research, social and health care and community projects.

Giuseppe Guzzetti, who runs the Fondazione Cariplo, is also head of ACRI, an association that brings together the foundations and the Casse di Risparmio.

"Cultural heritage is at the heart of the foundations," he explains. "We have our roots in the philanthropic cultural patronage carried out by banks."

Guzzetti explains that the foundations are run autonomously, having fought zealously to keep their status. They are still celebrating last September's victory in Italy's highest court, the Corte Constituzionale, that ruled the foundations are "private" and "good for social liberty". He adds that the foundations would welcome partnerships with foreign foundations in their efforts to increase funds for Italy's artistic and cultural heritage.

This dovetails neatly with the Italian government's move to a more American model of heritage management in the hope of attracting private investment and management. This major shift in heritage policy came in 1998 when the government started to sell off or farm out the management of sites and institutions to make them more entrepreneurial and efficient, and to create more opportunities for private donors.

"Adding value through restoration or promotion of our cultural heritage is closely related to the improvement of tourist flow, providing an important stimulus to the local economy," says Stefano Marchettini, ACRI's director general.

In 2002, the banking foundations donated €950 million in 20,438 initiatives, 33 percent of which went to art and culture. While most grants are destined for trusted recipients and local government, sometimes foundations become individually involved in setting up projects.

An example is the Fondazione Cassa di Risparmio di Roma which runs the Museo del Corso in Rome, where recent exhibitions have included a show of jewel encrusted eggs by the goldsmith Peter Carl Faberg้.

"The foundations, in fact, don't want to be just resource managers and financiers of third party initiatives, but also to spotlight and kick-start new projects. Most of them have chosen to go for grant giving, others operating, others still for intermediary models," says Guzzetti.

But while the foundations have been strongest in their own areas and fund mostly local initiatives, the vast majority are based in the north of Italy, a geographical bias that led to ACRI setting up a Southern Development Project in 2002.

With a pooled fund of €26 million, the project was only advertised in the southern regions and the committee is currently assessing applications.

But in the future the foundations do not want to act alone, and the Southern Development Project aims to find partners from the European Union.

"One of our objectives is to develop partnerships with foreign foundations and to increase relations with European institutions, and create synergies with the European Community on cultural matters," Marchettini says.

"We should also work with U.S. partner foundations, who are particularly aware of the wealth of our cultural assets and sensitive to the need to preserve them."

Marchettini thinks that the south of Italy could particularly benefit from a joint approach to donation, because access to EU structural funds - a pot of €2.3 billion for which the southern regions are eligible - depends on attracting €60 million worth of private funding.

"The approach has great potential because it has the double objective of promoting cultural districts and developing the economy of the south. This would very likely guarantee an important return on visibility to all participants," Marchettini predicts.