This study examines the evolution of corporate paternalism and profit-sharing practices within the Monte di Pietà (MdP) institutions of 15th and 16th-century Florence and Perugia. Established by local governments and the Franciscan Friars Minor, these charitable loan systems initially aimed to alleviate temporary poverty by providing low-interest or interest-free loans to the impoverished (Pullan, 2004). The civic authorities and Franciscans demonstrated paternalism through their support and management of the MdPs, reflecting a commitment to social welfare and moral economic practices grounded in Franciscan ethics (Little, 1978).
Over a 115-year period, significant divergences emerged between the Florentine and Perugian MdPs. In Florence, legislative changes gradually shifted the institution away from its altruistic origins. By the late 16th century, the Florentine MdP had become a powerful financial entity extending substantial loans to dignitaries and nobles—a move driven by self-interest and profit motives. This transformation was criticised by the Franciscan Friars Minor for deviating from the Monte's original mission. Conversely, the Perugian MdP faced challenges from rapid expansion and civil wars. Despite disruptions and occasional fund misuse, the Perugian MdP reaffirmed its commitment to aiding the poor. Through adherence to its founding principles, it remained dedicated to social assistance (Toaff, 2004).
The research analyses account books spanning over a century, bolstered by minutes from local governing bodies like the Consiglio dei Priori. By translating and interpreting these primary sources, the study enhances understanding of early corporate paternalism and the interplay between profit and philanthropy in Renaissance Italy. It sheds light on how foundational ethics can be preserved or eroded over time, offering insights into the historical roots of social responsibility within financial organisations. These lessons are relevant for contemporary discussions on ethical banking and corporate governance, emphasising the importance of learning from the past to inform present practices.