GOVERNING BODIES OF PATRONATO UNIVERSITARIO
Perfomance criteria
At Patronato Universitario Fundación, a quote from Prince Sadruddin Aga Khan, former United Nations High Commissioner for Refugees (UNHCR) from 1960 to 1970, is often invoked: “A gift undermines the respect of the recipient towards the donor, as well as the dignity of the beneficiary. Only what is earned through one’s sweat is cared for meticulously.”
Therefore, it is understood that the typical product of these Foundations, promoted by bankers, is a loan that would not fit in a commercial bank. 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 severe 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. The Foundation should never finance the entirety of a project; the promoter or presenter must take the first risk. 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
According to these principles, the following criteria are applied 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; those who approach it must have exhausted other sources of financing and be unable to obtain it from banking entities. The responsible party for the project must be dealt with directly, without intermediaries, to avoid hindering the process. The goal is to help people. Identifying their problems and potential solutions is critical. If the diagnosis and approach are good, other factors are secondary.
2. Grants
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, even if more moral than economic, of some institution with proven solvency. The Foundation will not provide funding alone: contributions of personal resources in amounts appropriate to the beneficiary’s capacity and, occasionally, from other funders are required.
3. Implementation of aid
The Foundation prefers to provide repayable aid. Non-repayable contributions are exceptional, as they might lead to financing 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 exceed ten years. If grace periods are required, the beneficiary must commit to making repayments, even if symbolic, during those periods.
4. Denials
Delaying a request is worse than an outright denial. Making the applicant wait can create false expectations and frustration.
An automatic denial will be given to:
– Any application 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 needs to be 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 benefactor who takes a belligerent attitude, demanding the grant as if it were a right.
