GOVERNING BODIES OF FUNDACIÓN HISPÁNICA
Perfomance criteria
The Fundación Hispánica often invokes a quote from Prince Sadruddin Aga Khan, former United Nations High Commissioner for Refugees (UNHCR) from 1960 to 1970: “The gift undermines the recipient’s respect for the donor and dignity. Only what has been earned through hard work is carefully cared for.”
Therefore, it is understood that the typical product of these Foundations, promoted by bankers, is a loan that would not be feasible for a commercial bank. This means interest-free, flexible repayment without the usual guarantees of financial entities. Still, in any case, it is only considered for viable projects capable of repaying what they receive as a loan.
Some Basic Principles of Operation of the Foundations
Recipients must always be non-profit entities. The Foundation does not engage in business nor lend to others to do so. It is not enough to lack a profit motive; the project must be severe and serve to help people. The Foundation seeks to reach where financial entities cannot. Loans are never made to cover deficits, as this would create dependencies and oblige the project’s sustainment. The Foundation does not promote but helps finance what others promote. The Foundation never finances an entire project: Those who promote or present it must take the initial risk. Prudence dictates not to finance more than one-third, with the promoters risking at least another third. Publicity is avoided, as well as marketing or social or commercial recognition.
Perfomance criteria
Based on these principles, the following criteria are followed when reviewing applications:
1. Initial contact
The Foundation does not advertise its aid or take the initiative to offer it.
The Foundation is a last resort entity; applicants must have exhausted other funding sources and cannot obtain it from banking institutions.
Direct contact with the project manager without intermediaries must be made to avoid hindering the process.
The goal is to help people. Problems and potential solutions must be identified. If the diagnosis and approach are sound, everything else is secondary.
2. Grants
Before granting aid, the beneficiary must present a coherent and viable action plan. The Foundation can provide technical assistance to the applicant.
When granting aid, the total economic amount must be specified to prevent the beneficiary from extending the aid starting from a low initial amount.
The grant requires the backing of a reliable institution, even if more moral than economic.
The Foundation will not undertake financing alone: contributions of own resources are required in an amount appropriate to the beneficiary’s capacity and, in some cases, from other financiers.
3. Instrumentation of aid
The Foundation prefers to give refundable aid. Non-repayable contributions are exceptional because they could lead to financing non-viable projects.
Financing is always flexible and adapted to the beneficiary’s needs.
Once assistance is approved, an execution schedule is agreed upon. It will generally be short and never more than ten years. If grace periods are required, during those periods, the beneficiary must commit to making amortizations, even if symbolic.
4. Denials
Delaying a request is worse than an immediate no. Making the applicant wait can create false expectations and frustration.
Automatic denials will be given to:
– Any request that cannot be approved within a short timeframe.
– Any project that violates legal or moral standards (labor abuses, tax evasion, money laundering, child or women exploitation, etc.).
– Any controversial and political issue.
– Any issue that is not publishable or sufficiently transparent.
– Any request from those who have demonstrated a lack of commitment.
– Requests from those who refuse to risk their resources, leaving all economic risk to the Foundation.
– Requests to finance commercial projects or business developments.
– Benefactors who adopt a belligerent attitude, demanding the grant as if it were a right.
