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February 2007

January 2007

Aligning Investments with Grantmaking - Feb 12 At Hudson Institute


Monday, February 12, 2007 • Noon to 2:00 p.m.
Hudson Institute • Betsy and Walter Stern Conference Center • 1015 15th Street, NW • Suite 600

Several weeks ago, the Los Angeles Times published a two-part series on the Bill and Melinda Gates Foundation, suggesting that the effects of some of its corporate investments are at direct odds with its grantmaking.  This raises a question that has long roiled the philanthropy world:  should foundations practice "social investing," by screening their investments to insure they’re aligned with their missions?   No, argued American Enterprise Institute Adjunct Fellow JON ENTINE in a recent Wall Street Journal editorial:  "The dark secret of 'social investing' is that it is neither art nor science: It's image and impulse. It reflects perceptions, not performance." 

On the contrary, blogger and foundation adviser LUCY BERNHOLZ insists:  "What Entine calls image, impulse and perceptions, I call values. If you are going to invest in public companies - which it's safe to say Foundations are going to do - thinking through how they align with your values, where they compromise, where you compromise for portfolio balance, etc. - is appropriate."  ALLISON FINE, Demos Senior Fellow and author of Momentum: Igniting Social Change in the Connected Age, agrees with Bernholz:  "Given the Foundation’s resources and ability to hire anyone from anywhere with the necessary expertise to review their investments, it is mind boggling to believe that finding socially conscious companies to invest in - to at least avoid companies that are specifically and actively counteracting their grantmaking efforts, would be too difficult or distracting for them." (For more, click here to visit Allison Fine's blog, A. Fine Blog.)

The issue of the Gates Foundation's view of social investing is thus well-joined, and on Monday, February 12, Hudson Institute's Bradley Center will pursue it further in a panel discussion with the above-named authors and scholars: American Enterprise Institute Adjunct Fellow JON ENTINE, LUCY BERNHOLZ of Philanthropy 2173, and Demos Senior Fellow ALLISON FINE. The Bradley Center's WILLIAM SCHAMBRA will moderate the discussion.  Lunch will be served.  Please join us!

It is exciting to see the convergence of online discussion and face to face convenings. Congrats to Lucy and Allison on their recognition as thought leaders in this important discussion.  As a suggestion to Bill Schambra, you might check out Tactical Philanthropy for a view of social investing that is practical, rather than political, from Sean Stannard-Stockton, a professional money manager.

Charity World Network

Seal_gold3 Jim Gould, founder of Charity World Network, writes in an email, seeking a mention on Gifthub:

>During my life as a stock broker for forty years, I served on the Boards of many nonprofits.  They all had great aspirations and noble missions.  However, we spent most of our time discussing and planning how to raise the money to fund these programs.  The solutions all involved asking for contributions.  I dedicated myself to find a way that gave power to non-profits.  We have 1,000 nationally known stores that have agreed to rebate money when people do their online shopping through the Charity World Network.

Jim's org offers a seal, that might look like the Good Housekeeping Seal of Approval. Those nonprofits in the network seem to put a link on their site that drives business to for-profit firms that give a percentage of revenue back to the nonprofit. The intermediary is Fund Raising Solutions, also founded by Jim Gould.  Click Support, an online shopping mall, founded by Jim, is also involved.  How dollars flow through this system, and how in particular, money flows to Jim,  through which entities, I am not clear about, though Click Support does publish a fee schedule for those wishing to participate. I am also not clear how a for-profit earns the big Seal from Charity World Network. Is it all about the money, or are their other criteria? I welcome Jim's fuller explanation to help readers in making their own decisions.   


The Fool Asks the King....

Leap: What Will You Do With the Rest of Your Life? By Sara Davidson. Seems that this is a great question to ask of successful people, or those successful in worldy terms, who might have had an event, whether a liquidity event in selling their business, a first heart attack, getting forced out at the top from a firm, a divorce, a child who dies, or whatever it might be that forces the person to ask, "Who am I? Where am I going? What can I do with the resources remaining, my days included?" Volunteering, giving, activism, organizing, running for office, writing a book, mentoring kids, are all good answers. Boomer age people find mortality a strange concept. It gives us immortality yearnings, or yearnings to yet do more. Philanthropy should be a key beneficiary, but the initial topic, the key topic, with the client is not philanthropy; it is self, family, and society. The topic is the client's own hero story, the client's sense of an ending, to use a phrase from the literary critic Frank Kermode. Paul Schervish would know what I mean. People want to be able to tell an archetypal story that more or less fits the facts of what they did, failed to do, did wrong, learned, overcame, accomplished and now can teach. They start out in our culture thinking that it must be Horatio Alger - rags to riches. They get to be a Presidential aid, spend time in the slammer for dirty tricks,  and the story changes - "I once was lost and now am found." (C.f. Chuck Colson.)  With your clients, what is the story? I am afraid most advisors don't ask, and don't listen for themes. As a result they fail to help the client write the last act, last scene with anything much in mind but taxes. "Here lies Jenny Jones, she died estate tax free." You'd think that was the meaning of life. Might be yours, not mine. And most clients can do better. But, again, the topic is no more philanthropy than it is tax savings. The topic is "Who are you?" And the outcome is a hero story whose next chapter must be written well in order to recuperate the sorry mess that rich and powerful people make in their own lives and those around them. Hunh? Yup. Think of King Lear as the story of a botched estate plan. The best counselor that king had was a Fool. Draw your own moral, ye courtiers who aspire to be Chancellor of the Exchequer, Minister of Public Relations, or Homme D'Affaires.  Our modern day kings and queens are ill-served by such providers of services - loyal lackeys all. On the other hand, the Fool sleeps in the stables.

Nonprofit Board

A friend who has served on countless nonprofit boards writes me, for posting on Gifthub, the following:

Quote from The National Center  of Nonprofit Boards defining what
nonprofit boards can be - "a group of otherwise very  competent people who come together to act out their incompetence."

I thought it was funny, until I read her next note inviting me to a board meeting.

Catherine Austin Fitts on Gore's Truth and the Tapeworm Economy

From an interview in VT Commons,

The fundamental lie that Al Gore is telling comes from defining our problem as environmental -- in this case global warming, whereas our environmental problems -- as real and important as they are -- are but a symptom of the problem, not the problem. Gore defines our problem as "what." He is silent on "who."

For example, Gore does not ask or answer:

Who is doing this?

Who has been governing our planet this way and why?

Cui bono? Who benefits?

Who has suppressed alternative technologies resulting in our dependency on fossil fuels? Why?

Who has generated how much financial capital generated from this damage?

How did things get this bad without our changing?

How much was related to fear of and dirty tricks of those in charge?

How do we recapture resources that have been criminally drained and use them to invest in restoring environmental balance?

Utah Phillips once said, "The earth is not dying. It is being killed, and the people killing it have names and addresses." In one sentence, Utah Phillips told us more about global warming than Al Gore has told us in a lifetime of writing and speaking, let alone in An Inconvenient Truth.

Needless to say, Gore offers no names and addresses.

What is missing from Gore's timline:

the creation of the Federal Reserve:
the movement of currencies away from the gold standard:
the growth of non-accountable fiat currency systems:
the growth of consumer, mortgage and government debt;
the growth in the superior rights of corporations over people and living things;
the growth of "privatization" (which I call “piratization”);
the subversive and sometimes violent suppression of renewable energy, housing and transportation technologies and innovations;
the growth of the offshore financial system and the use of that system to launder and accumulate vast sums of pirated capital accumulated through the onshore destruction of communities.
Understanding the fundamental imbalance of the corporate model -- where enterprises have the rights of personhood, but not the finite existence of people or the legal responsibilities and liabilities -- and the corporate model's economic dependence on subsidy that drives up debt, economic warfare and the destruction of all living things is a critical piece to developing actions to reverse environmental damage.

Al Gore is a man that has made money for corporations his entire life. He is a member in good standing of the Tapeworm and his current lifestyle and this documentary are rich with the resources that corporations can provide.

There is also no personal accountability.

Al Gore has not “come clean.”

Put Fitts on the tapeworm of the freemarket economy and its political and philanthropic hosts up against Lucy Bernholz on "aligned" foundation investing.  I am afraid Lucy too is feeding the tapeworm, like Gore. Buying and selling stocks and bonds inside foundations is a weak lever for social change.  Note that Gore's film was funded as a social venture by Jeff Skoll an arch-capitalist, and inventor of the world's biggest online fleamarket, a man whose hero apparently was once Ayn Rand. 

Still, maybe we should align foundation assets with foundation mission - should not be hard since philanthropy is already so co-dependent with business as usual.