Gift Hub

Loss of Client Confidence in Those Who Sold Subprime and Auction Rate Securities?

REP Magazine reports, the wake of the subprime and auction rate securities debacles, huge outflows of client funds from the wirehouses and major banks. The money seems to be going to independent Registered Investment Advisors.  I wonder if this drop in client confidence will affect the philanthropic planning divisions of places like CITI, Wachovia, Bank of America, and Merrill? Where will that money go? The independent Registered Investment Advisors tend not to be experts in philanthropy, and they too have conflicts of interest, since they are generally paid on assets under managment. (Philanthropy may involve managed money in trusts and foundations and donor advised funds, but ultimately is all about putting money to work in the community. Advisors, including independent ones must watch with mixed feelings as those dollars go out the door.) Perhaps clients will seek independent RIAs to manage the money and independent philanthropic advisors to tell them how to put that money to work in society? If so, firms like The Philanthropic Initiative, Inspired Legacies, Rockefeller Philanthropic Advisors, and Arabella may benefit.

Investing in War Responsibly

Socially Responsible Investors ponder The Outsourcing of Warfare to Private Military Companies (PMOs).

PMO activity presents a challenge for the SRI community. Outsourcing, subcontracting, and new players in the field have clouded the question of which companies are directly profiting from weapons and warfare. As the industry evolves, SRI investors should reevaluate their weapons screens to make sure they are still achieving their original intent.

Elsewhere, "Bagdad Bonanza." Makes you wonder if it is socially responsible not to invest in war. How else can we protect our Freedom? And make money too?

Mr. Repo Man as Philanthropic Advisor

Today, my good friend Mr. Repo Man made  his calls. At 9 am he sold credit cards to deadbeats and college kids.  At 10 he did collections from a Pay Day Loan operation owned by the bank employing him, the Bank of Wealth Bondage. At 11 he was lending money at 26% in an alley to an addict. At noon he had lunch with the Congressman whose campaign he financed. At 1 pm he did the repo on the welfare mother's van. At 2 pm he gave you philanthropic advice about how to invest in donor advised funds and foundations managed by his bank. At 3 pm he was offering subprime loans. At 4 pm he was selling the loans into your pension plan. At 5 pm he left for the bar. At 6 pm a quick meal with the family. At 7 pm he introduced Mr. Phil Cubeta, Morals Tutor to America's Wealthest Families, as Phil spoke about Vision and Values for a Community Foundation's major donors, the Bank of Wealth Bondage serving as proud sponsor, and as the money manager for the foundation. 

Does anyone see any ironies here, or is it just business as usual?

Mark Kramer on Mission Related Investing

Excellent interview by Sean Stannard Stockton with Mark Kramer on trends in mission related investing. Mark says:

We see that foundations, over the last – oh, I would say over the 30 years from 1969 to just around 2000 – the amount of money going into these proactive mission investments was growing at about three percent a year. In the last five years, it’s actually been growing at about six percent a year. And we think in just the last two years, the amount of new money going in has almost tripled. So there’s just tremendous momentum around foundations moving into this space.

L3C Approved in Vermont

Kate Barr provides an excellent overview of the L3C business structure, just now going live in VT. The structure is expressly designed to qualify for mission aligned investments ("program related investments") by foundations. The purpose is to use patient, low return, or no return, philanthropic capital to entice market investors to build businesses that serve social purposes. An example, perhaps, might be a store selling locally grown fresh food in the inner city, thereby helping farmers and consumers, while also providing jobs. Would a community foundation consider investing in a deal life that? Could it be offered through Donor Advised Funds as an investment? Could a church in the inner city take up a collection, give to the Donor Advised Fund and so "have some skin in the game," even if they could not qualify as accredited investors to buy the securities? c.f Reg D.

The Temptation of the Two Bottom Lines

Take your two bottom lines, label them to your own satisfaction. Mine are God and Mammon. Those two axes define four quadrants. In one quadrant you do well for God by doing good for Mammon. That is the world of social venture philanthropy. The promoters like to pretend that this quadrant is the largest or only one. We can all do well by doing good. But the most interesting quadrant is the one in which we do very well for God and not at all well for our own worldy self interest. Benefaction means good deeds. Those who peacefully resist injustice and die for the world we want are doing a good deed. They are not doing well by doing good, unless you believe that eternal life, or the kingdom within, is their reward.

How many kind of capital are there? We have certainly financial capital, but it seems from my reading in venture philanthropy and related fields that we also have human capital, social capital, moral capital, political capital, spiritual capital, and many more kinds of capital, almost too many to count. When we systematically misdescribe God's gifts, or those of the holy spirit, in the language of Mammon, how is that account squared?

In the Temptation of the Kingdom, Jesus was given a choice of two bottom lines. He was not given the choice of both bottom lines. What was the problem with Satan? Was he stupid? Our new social capital marketeers could have seduced Jesus himself.

The price we pay by investing so heavily in market-speak is sin and death. Our own dead eyes are the negative balance we carry. Jesus made the blind see and the dead walk. When he returns perhaps we will have the Rapture, or maybe we will simply slough  off our deadness and rise albeit briefly to eternal life. 

Hubris, Denial, and Financial Services Culture

The Milken Global Institute Conference...

brings together some of the most extraordinary people in the world - from scientists, business executives and philanthropists to journalists, academics and Nobel laureates - to discuss, debate and deliberate today's most pressing social, political and economic challenges.

One panelist returns home to report: "Mind you, there were some signs of dissent from the Panglossian posturing." Via.

Bill Moyers Hates the Free Market?

Rense.com

Bill Moyers, his son John, and their moneyed sidekicks, the Schumann brothers, hate the free market with intemperate ferocity....

Lots of investigative research here, whatever your overall take on Moyers. Of course, we could begin by asking, What Free Market? We talking about contemporary Bulgaria? America in 1843? Our insider-driven markets as we have them today? Free market, free speech, free beer. I am still waiting for delivery. Maybe we as citizens, progressive or conservative, should unite to restore what freedoms we can.

Meditations on Mission Investing, by Catherine Austin Fitts

Catherine has posted a deep Meditation on Mission Investing. If you find it cryptic as to her personal story, this link might help.  All that has befallen her did not happen in America. It could not have. We are a free people, in a free country and a free market; one nation indivisible under God. We are a meritocracy in which the best rise. What Catherine describes is Necropolis, the land of the living dead. Unspeakable. Shadows moving in an underworld. Love, art, the seasons, neighborliness, and truth-telling, will those prevail over death-in-life? As many as the leaves of autumn are the souls on the river of death. Yet love will renew us if we dare open eyes and hearts to the shadow of horror that moves amidst our blindness, fear, and silence.  Orpheus: Do not taste the seed of death, nor look back to find Eurydice.

Mission Investing, Catherine Austin Fitts

Catherine Austin Fitts:

I am writing a series of posts on Mission Investing, including some point-counterpoints with Phil Cubeta at gifthub.org.

I bring a few ants to the philanthropy picnic. Catherine brings the fire ants. I will have to read and re-read her densely wrought posts to let the system she sees come into focus. As I understand better, I hope to put in a plea for philanthropy, and see how she might then debunk it.