The three foundations: Fundación Hispánica, Fomento de Fundaciónes and Patronato Universitario

While Luis Valls was alive, he encouraged social action based on three principles, which were also three phrases he often repeated: “Without profits, there is no charity,” “I maintain a policy of not giving money outright,” and “Social action begins with providing technical assistance before providing money.” This meant that aid would primarily be structured as credit, if not exclusively as advisory services. If financing was provided, it would be under “soft” conditions regarding repayment terms and always aimed at those known as the “unbanked,” i.e., people or entities that no financial institution would serve.

From the outset, all this was done without advertising and without using these initiatives to enhance personal or brand image (in this case, his role as president of Banco Popular). Luis Valls explained in the Repertorio de Temas his vision for the foundations: “Considering that banks operate in the financial sector, it is logical that all social aids provided by the foundations are structured as loans. Their terms mean that these loans are considered soft, especially when interest rates are high and money is scarce. Isolated credit operations are exceptional, as standard programs are preferably used: cooperation with universities, book programs, international cooperation, equipment, youth clubs, motor transport for rural clergy, ecclesiastical studies, etc. Another usual and interesting modality is that of scholarship loans, with even softer terms regarding repayment and interest, and with the sole personal guarantee of honor, without collateral.” In general, Luis Valls did not favor donations, though he did make some. These were considered as unrecoverable grants or loans given and condoned. “Those loans where repayment is not realistically contemplated are charged directly to social works expenses,” he said.

Although various forms of social action were initiated by Luis Valls from the 1950s onwards (from within and outside Banco Popular), today, the foundations known as those within the “Beatriz Building” are three. Francisco Aparicio, president of all three, clarifies that they operate as one. There is a unified management, and the projects are handled by one foundation or another depending on the moment and need. “In the past, there were more, but they have merged because they lost their specialized sense or their funds were depleted,” he points out. The three foundations are Hispánica, Fomento, and Patronato Universitario.

In 1957, when Luis Valls was appointed executive vice president of Banco Popular Español, the bank’s social action began. Requests for help reached his office, and he wanted to address them, but it wasn’t always appropriate to do so through the bank. He said: “The Bank should not give away its primary commodity, money.” Taking the lead in addressing the requests for aid, he established in his proposal that directors should begin to give up their rights in order to fund social action via the forthcoming foundations.

From 1970, those funds from Banco Popular were channelled to Fundación Hispánica, which was replaced in 1981 by Fundación para Atenciones Sociales (FAS), currently absorbed by Fundación Patronato Universitario. From 2008 onwards, it reverted to Fundación Hispánica until the bank’s resolution. Fundación Hispánica was created as a result of Luis Valls’ desire to externalize help and detach it from the Bank, although the bank still provided a significant part of its funding . The donations received from Banco Popular are reflected in its annual accounts and may still be consulted in the CNMV today.

Fundación Hispánica maintains programs supporting Hispanic culture and continues aiding students and educational projects, such as the Academic Excellence Program, which, for many years, has been “buying” good grades from students who have taken out loans, especially from private universities and colleges.

In 1976, Fundación Vasconia was established. It was promoted by Banco de Vasconia, a subsidiary of Banco Popular, which operated mainly in Navarra and the Basque Country. This foundation allowed hundreds of seminarians to be sent to Navarra by bishops from around the world to complete their training. This foundation no longer exists, as it was absorbed by Fundación Hispánica in 2017 following the disappearance of Banco de Vasconia.

The replacement in 1981 of Fundación Hispánica with Fundación para Atenciones Sociales as the channel for the bank’s social action was due to various circumstances, one of which was the fact that Fundación Hispánica was a Bank Trustee (its first physical representative was Aristóbulo de Juan). In 2008, with changing circumstances, it resumed its initial role.

It should be noted that Luis Valls donated part of his salary directly to these foundations. For instance, in 1970, he allocated 3.5 million pesetas, and over ten years (from 1979 to 1988, inclusive), he donated 67 million pesetas. He maintained this habit throughout his life. It should be clarified that his remuneration was always significantly lower than that of his peers in other entities. In 2003, in an article in the newspaper La Vanguardia, Encarna Pérez referred to Banco Popular’s donations to Fundación para Atenciones Sociales and compared the salaries of bank presidents.

In 1987, Patronato Universitario was founded and took over the activities of an entity established by Luis Valls called Patronato Santillana, named after the residential college in Madrid, which Luis Valls frequently visited to personally assist in training and promote an interest in communication skills among students.

Since there was already a foundation called Santillana, owned by the Polanco family, owners of the Santillana publishing house, it was decided that the new foundation should be called Patronato Universitario. To this day, it has significant activities in financing students and entities. In addition to taking over programs of this type from Fundación Hispánica and Fundación Vasconia, it has expanded the redemption of loans to students.

In the same year (1987), Fomento de Fundaciones was created, with initial funds mainly from Rafael Termes’s inheritance. From the beginning, its vocation was to contribute to international projects; as a result, some publications refer to it as “Fundación Internacional.” When Luis Valls passed away, he named this foundation as his heir, to an amount of nearly 10 million euros, of which 6 million euros were Banco Popular shares: for years, on the 13th of each month, it was used to buy bank shares.

In 2008, under the presidency of Ángel Ron, Fundación Hispánica was reinstated as the channel for Banco Popular’s social action, and part of its aid was allocated to meeting the bank’s institutional commitments (see annex). The foundation was given the subtitle “del Grupo Banco Popular” as it was the first major Spanish bank to promote a non-cultural foundation. At that time, it was the only bank without its name associated to a foundation, which hindered the fulfilment of some institutional commitments of the bank taken over by the foundation (see annex). This subtitle disappeared when the bank was resolved, leaving it again as Fundación Hispánica.

The donations Fundación Hispánica received from Banco Popular resumed with the name change in 2008 but were increasingly smaller due to the crises the entity faced year after year. If it had been the equivalent of about 22 million euros a year (between Banco Popular and its subsidiaries) during the 1980s and 1990s, it fell to 12-13 million and even as low one year as 1.8 million. The donation ended in 2015, before the bank’s resolution.