PHILANTHROPIST
The Foundations
Perfomance criteria
In the Beatriz Building Foundations, a quote often invoked is by Prince Sadruddin Aga Khan, former United Nations High Commissioner for Refugees (UNHCR) from 1960 to 1970: “A gift damages the recipient’s respect for the donor and the recipient’s own dignity. Only what has been earned through one’s own sweat is cared for diligently.”
It is understandable, therefore, that the typical product of these Foundations, promoted by bankers, is a loan that would not fit in with a commercial bank. That is, it is interest-free, with flexible repayment, and without the usual guarantees required by those who must account—even to regulators—for the risks taken. However, it is always considered only for viable projects which are capable of repaying what they receive in the 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 sound and serve to help people.
The Foundation aims to cover situations which financial institutions cannot.
Loans are never made to cover deficits, as this would create dependencies and oblige the projects to be sustained.
The Foundation does not promote but helps finance what others promote.
The Foundation should only finance part of the project: Those who promote or present a project must take the initial risk. Prudence advises not to invest more than one-third; promoters should risk a similar amount.
Publicity is avoided, as well as marketing or social or commercial recognition.
Perfomance criteria
Following the above principles, the following operating criteria are observed when reviewing applications:
1. First 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.
The Foundation must deal directly with the party responsible for the project 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 sound, everything else is secondary.
2. Granting aid
Before granting aid, the beneficiary must present a coherent and viable action plan. The interested party can count on the Foundation’s technical assistance.
When granting aid, the total economic amount must be specified in advance to prevent the beneficiary from extending the aid beyond the initial amount.
The grant requires the backing of an institution of proven solvency, even if its authority is more moral than economic.
The Foundation will not assume financing alone: contributions of own resources are required, in amounts appropriate to the beneficiary’s capacity, and sometimes from other financiers.
Beneficiaries cannot demand that their identity be confidential. This requirement is reserved for fund donors.
3. Implementation of Aid
The Foundation prefers to give repayable aid. Non-repayable contributions are exceptional because this 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, the beneficiary must commit to making repayments during those periods, 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 frustrations.
Automatic denial will be given to:
– Any request that cannot be approved within a short timeframe.
– Any project that violates legal or moral norms (labor abuses, tax evasion, money laundering, exploitation of children or women, etc.).
– Any controversial and political topic.
– Any topic 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, thus leaving all economic risk to the Foundation.
– Requests for funding commercial projects or business developments.
– Any beneficiary who adopts a belligerent attitude, demanding the grant as if it were a right.
Finally, two considerations:
Every rejected request report must be documented in case further study is needed or if the petitioner reapplies.
When a project is likely to be rejected. additional information or letters that could generate false expectations should not be requested
