factor is linked to the eventuality of the non - profit undertaking failing to repay the loan. in this event, a bank bringing action for forced recovery would run the risk of appearing to put its own interests before the social, humanitarian or charitable purposes of the distressed undertaking. financial support can be provided to the non - profit and voluntary sector by intermediaries that exclusively, prevalently or even only occasionally engage in such lending ( so - called “ ethical ” intermediation ). the record shows a variety of such experiences in many countries. to cite a few significant examples, okobank in germany, which focuses on environmental and peace issues, had 63, 000 customers and 170 billion lire of deposits in 1993 ; in the netherlands, triodos bank, of the eponymous association for social development and environmental protection, accounts for 2. 5 per cent of the country ’ s total bank deposits ; in switzerland, the banner experience is that of alternative bank abs, which in 1992 had around 106 billion lire of loans outstanding to local non - profit enterprises and associations for thirdworld development. other intermediaries concentrate on fostering small business in the third world or in economically depressed areas of the industrialized countries. the best - known example is grameen bank of bangladesh, which lends to farmers in the poorest rural areas. the key to its success is its technique of forming small groups of customers who take part in training workshops that also serve to select the creditworthy. the small loans disbursed to them are gradually scaled up if each member of the group meets the repayment terms. the bank ’ s high credit quality testifies to the efficacy both of the method used for assessing creditworthiness and of the system of cross - monitoring among members of a group. the high risk that nonetheless characterizes the bank ’ s activity made it advisable for it to fund its loans primarily with public contributions and the bank ’ s own resources, part of which was paid in by the beneficiaries of its lending. in the united states, a very interesting case is that of the illinois neighborhood development corporation, created by non - profit shareholders and licensed to engage in banking since the seventies. the bank initially operated in one of the worst slums of chicago, the south shore, and endeavoured to redevelop the area particularly by giving minority groups more access to credit. the programme ’ s success allowed it to be extended to other rundown, outlying neighbourhoods. thanks to

be dipped into indiscriminately or as a body of assets whose composition can be altered in order to pursue the most diverse purposes. the foundations are non - profit operators themselves and can actively contribute to the non - profit sector ’ s development by identifying areas for intervention and nurturing socially useful initiatives. in deciding how to go about pursuing their objectives, the foundations can adopt a directly operational setup and manage one or more socially useful activities themselves, under arrangements already adopted elsewhere and not new to italy. if they should decide instead to continue in the role of grant - making institutions, in order to make a truly effective contribution they must develop sufficient skills in selecting initiatives, monitoring the use of funds and assessing results. grant - making plainly entails a degree of specialization, not only geographic but also by sector of socially useful activity. in effect, the data assembled by the association of italian savings banks ( acri ) via reclassification of the banking foundations ’ annual accounts and a survey of the grants made by the 81 ex - savings bank foundations offers evidence of growing specialization. sorting the foundations by sectoral concentration of grants shows that 60. 5 per cent allocated over half of their funding to a single sector or more than sixth tenths to just two sectors in 1995. there is some tendency away from small grants, although these are still very common among the smaller foundations, and considerable growth in multi - year grants, whose share in total disbursements rose from 7. 7 per cent in 1994 to 11. 6 per cent in 1995. according to the acri report, disbursements amounted to 211 billion lire in 1995, equal to a little less than one third of the foundations ’ net operating results and 7. 8 per cent up on the 1994 figure of 196 billion. the banking foundations ’ activities are hampered by their low return on assets. acri calculates that the ex - saving bank foundations ’ overall ratio of net operating results to assets was 2 per cent in the 1994 - 95 financial year. this poor performance, though an improvement on 1. 43 per cent in the previous financial year, reflects the modest return on holdings of bank shares, dividends from which account for 80 per cent of the result. thus, the ability of the foundations to fulfil their institutional purposes depends largely on cyclical conditions in the banking industry. it is incumbent on the foundations to seek an optimal return on their capital, in order to preserve its real value and ensure the continuity of their