Structured charitable products: bridge between finance and philanthropy

Launched three years ago, structured charitable products enabled the bank to make donations to charities that are involved in various areas of general interest such as the fight against cancer, child welfare, support for people with disabilities, the fight against housing problems, such as l'Institut Curie, SOS Villages d’Enfants, Perce Neige, and Habitat et Humanisme. 

“The overall donation amount is a good illustration of the philanthropic commitments of our clients and the solidarity initiatives of the whole Societe Generale Group and its staff, explains Jean-Christophe Jouannais, Structured Product Engineer within Societe Generale Private Banking. The selection of beneficiary charities made by the private bank reflects the main concerns of clients who are today looking for efficient investments that have meaning.”

“Beyond being sophisticated financial solutions, Societe Generale’s structured products create a significant social impact across a variety of areas through the charity selection process. They create a bridge between the financial world and the world of solidarity and philanthropy,” says Emilie Fontaine, Head of Partnerships at SOS Villages d’Enfants. 

“These ingenious investment products increase Societe Generale’s social commitment by mobilizing its entire ecosystem, from its clients to its staff, around impactful solidarity actions,” comments Agnès Hubert, Head of Donor Relationships at the Institut Curie. 

Linking the engineering expertise of Societe Generale’s global markets activities and the investment advisory expertise of Societe Generale Private Banking’s bankers, these products have the unique feature of combining investment and charitable donations. While their financial characteristics are those of conventional equity structured products (autocalls) that clients are familiar with (automatic early redemption mechanisms when certain market conditions are met; underlyings based on CAC40, Eurostoxx50 and other equity indices;  10-year maturity, etc.), the engineers of Societe Generale’s global markets activities developed a multi-level donation mechanism so that charities can take full advantage of the structured product: 

• A donation linked to the amount subscribed by clients. At each product launch, the bank makes a donation corresponding to 0.10% of the nominal amount subscribed by the clients, with a minimum amount of donation divided equally between the different beneficiary charities.

• A conditional grant that depends on the evolution of financial markets. If after a year equity markets exceed a certain growth threshold, the charities then receive an additional donation of 0.10%. If markets exceed the threshold in year two, the charities then receive an additional donation of 0,20% and so on until the 10 year maturity is reached.

“Of the 1.8 million euros in donations since 2018, approximatively 500,000 euros are conditional donations, the good performance of equity markets having triggered early repayments or “recalls” of several products in 2018 and 2019, indicates Jean-Christophe Jouannais. These products, which each attracts close to 3,000 investors, are highly successful because they bring diversification to clients. We offer them a choice by systematically including a solution with a charitable dimension in each marketing campaign of structured products.”

"These solutions of social commitment and generosity are also innovative in the sense that it is the bank that commits to make the donation, in comparison to traditional solidarity banking products where the clients are the donors. In addition, Societe Generale pledges to make a minimum donation regardless of the product’s marketing outcome. Furthermore, the donation mechanism is time-bound, at each stage of the product’s life, and not just at subscription,” adds Agnès Hubert.

The philanthropic commitment of Societe Generale through these products takes place over time through a long-term relationship between the staff of its private bank and the selected charities based on transparency and loyalty. The donations made over the past three years have contributed to the financing of many impactful projects that are key for the beneficiary charities, enabling them to make great strides in their mission of general interest.  

“Since 2018, Societe Generale is one of our main partners and contributes each year, through donations from structured products, to financing the construction of new SOS children villages. We have built four of them: two in Charentes Maritimes, one in Maine-et-Loire and one in the Var,” specifies Emilie Fontaine, Head of Partnerships at SOS Villages d’Enfants. 

“In addition to the donations we receive, the bankers of the private bank  are very attentive to our needs, share a strong interest in our mission, and act as spokespeople for our organization. They talk about us and the projects that are financed by the donations to their clients. This contributes to our charity’s outreach and facilitates the arrival of new supporters or donors,” she said.

“Institut Curie shares with Societe Generale the same values, whether human, societal or innovation-related. Through these products, the bank is one of our major donors. Thanks to its generosity, we have been able to rapidly implement research projects that bring hope to new treatments for children, says Agnès Hubert. In particular, the bank’s donations have fully funded work on rhabdoid tumours. These are rare and very aggressive cancers that affect young infants and children under the age of two and have a cure rate close to zero, while on average the cure rate is 80% for children with cancer. Thanks to this work, we have identified the reasons why these tumours block the immune system and launched three new research programs in the hope of finding an effective immunotherapy treatment.”

These charitable structured products are part of Societe Generale’s offer of solidarity-based products and services which led the bank to donate close to 2 million euros in 2020 to some fifty French public utility partner charities.