PHILANTHROPIST
The origin of the Foundations
Luis Valls was a banker, but he was also a humanist and a philanthropist. He encouraged, promoted, and financed foundations that helped change the lives of thousands of people, all while avoiding the spotlight. These foundations never used his name or image, he was never on their boards, and he never presided over any. However, knowing his character, which preferred to influence rather than command and valued being helpful above all else, it is clear why these foundations successfully carried out many projects and why some still remain active today.
Where the Idea Came From
“The Christian upbringing he received from his family and school formed the basis of strong religious convictions that led him to a management style always mindful of people and social activity,”explains Ángel Ron.1José Alcázar Godoy2 agrees: “His economic and social actions are better understood through his Christian faith. Supernatural ideals do not overlook the concrete, and his engagement with charity led him to immense social action. He understood his work in banking as that of a mere steward of resources God entrusted to him to manage appropriately. He wasn’t the owner of the money but responsible for it.”.
From the moment help requests of all kinds began arriving at the office of Banco Popular’s presidency (where Luis Valls had been executive vice president since 1957), there was a need to find a responsible and effective response.
Generosity Above All
The help requests arriving at Luis Valls’s office, which he undoubtedly wanted to address, could not become a problem for the bank. Initially, he wondered why not do it prudently using the bank’s profits. However, he concluded it was preferable to do it differently: the directors would forgo the economic benefits they were entitled to as board members. Instead of receiving their statutory fees and per diems and then donating them, they simply did not receive any, and the bank allocated that money to fund social actions.
Money is Not Given Away
From the beginning, Luis Valls was adamant: money is their raw material and cannot be given away. The entities channeling social action (the foundations) had to operate under specific parameters. As outlined in Banco Popular’s Style Book, the solution for providing help lay in their own métier (lending money) but tailored to the requests they received: the so-called soft financing. With an important caveat: social action began by providing technical assistance before lending money. “Many potential beneficiaries do not understand their own problems, misdiagnose their issues, or, due to their enthusiasm, risk indebting themselves without being able to manage their debt properly,” he said. Regarding the possibility of giving donations, Luis Valls was openly against it, except in some specific cases. He didn’t even want to hear the requests. Luis Valls maintained that knowing you are being lent money and that you have to repay it (even under very lenient conditions) gave value to the project needing financing and encouraged the beneficiary to do an excellent job to succeed and thus be able to repay it. This is where the seed lies for the foundations still active today with the same performence criteria. What a bank does best is granting loans. However, with certain limits: first, try not to provide 100% of the financing; ideally, stay within one-third with the idea that another third would be obtained from another source and the remaining third from the borrower’s funds. Second, only to individuals or entities known as “unbanked,” meaning those not served by banks. Third, always committed to repay what was lent so that more people could continue to be helped.
Bibliography
(1) Prologue of the book History of Banco Popular. The Struggle for Independence (Gabriel Tortella, José María Ortiz-Villajos, and José Luis García Ruiz, Marcial Pons, 2011). (2) Brochure Luis Valls. From banking to God (José Alcázar Godoy).
