GOVERNMENT BODIES
Perfomance criteria
At Fomento de Fundaciones, a quote by Prince Sadruddin Aga Khan, former United Nations High Commissioner for Refugees (UNHCR) from 1960 to 1970, is often invoked: “The gift damages the recipient’s respect for the donor, as well as the recipient’s dignity. Only what has been earned through the sweat of one’s brow is cared for diligently.”
Therefore, it is understood that the typical product of these Foundations, promoted by bankers, is a loan that a commercial bank could not contemplate. That is, it is interest-free, with flexible repayment terms, without the typical guarantees of financial institutions, but, in any case, only considered for viable projects that are 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 useful and serve to help people. The Foundation seeks to reach where financial entities cannot.
The Foundation should never finance the entirety of a project; the promoter or presenter must take the first risk. The Foundation does not promote but helps finance what others promote.
Prudence advises not to invest beyond one-third, and the promoters should risk at least as much.
Publicity is avoided, as well as marketing or social or commercial recognition.
Perfomance criteria
In accordance with these principles, the following operating criteria are observed when reviewing applications:
1. Initial contact
The Foundation does not advertise its assistance or take the initiative to offer it.
The Foundation is a last-resort entity; those who approach it must have exhausted other sources of financing and be unable to obtain it from banking entities.
Direct dealings should be with the project manager without intermediaries to avoid hindering the process.
The goal is to help people. We must identify their problems and possible solutions. If the diagnosis and approach are correct, the rest is secondary
2. Grants
Before granting aid, the beneficiary must present a coherent and viable action plan. The applicant may count on technical assistance from the Foundation.
When granting aid, the total monetary amount must be specified beforehand to prevent the beneficiary from extending the aid beyond the initial amount.
The grant requires the backing of a well-established institution, even if the institution has more moral than economic authority.
The Foundation will not assume financing alone: contributions from own resources are required, in an amount appropriate to the beneficiary’s capacity and, occasionally, from other financiers.
3. Aid implementation
The Foundation prefers to provide repayable aid. Non-repayable contributions are exceptional because they could lead to the financing of non-viable projects.
Financing is always flexible and adapts to the beneficiary’s needs.
Once aid 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 repayments, even if they are only symbolic.
4. Refusals
Delaying a request is worse than an outright no. Making the petitioner wait can create false expectations and frustration.
An automatic no will be given to:
– Any request that cannot be approved in a short time.
– Any project that violates legal or moral standards (labor abuses, tax evasion, money laundering, child or female exploitation, etc.).
– Any controversial and political issue.
– Any issue that is not publishable or sufficiently transparent.
– Any request from someone who has shown a lack of commitment.
– Requests from those who refuse to risk their resources, thus leaving all economic risk to the Foundation.
– Those seeking funds to finance commercial projects or business developments.
– Beneficiaries who adopt a belligerent attitude demand the grant as if it were a right.
