Social Entrepreneur blog for the world changers
Archive for December, 2008
On the Brink of Change
Dec 30th
It is difficult to spend much timing musing over the year 2008. At this time of year many of us look back on the year that has passed and try to make sense of it. Our mistakes, hopefully, will teach us what not to do or guide us toward trying things that worked for others. We reminisce over the fun and exciting events of the year with plans and goals freshly laid for the coming year. The last quarter of 2008 was fraught with daily upheaval and financial losses that caused many people to despair. I needn’t list everything that went wrong (it is a long, long list). I have had enough doom and gloom and 2008 can be summed up as a financial mess. So let’s step back to look only at those things that stand out as hopeful against this grim backdrop.
Most prominent was the election of a new President and the excitement, swelling around the globe, of his upcoming inauguration on January 20th. Obama has wasted no time organizing his transition and making appointments to his cabinet. All of Obama’s picks appear to have substantial experience and come from diverse backgrounds, they are:
- Senator Hillary Clinton as secretary of state - Clinton seems to be uniquely qualified to be secretary of state bringing her years as a senator and first lady in her husband's administration as important experience.
- Timothy Geithner as Secretary of the Treasury – has been the head of the Federal Reserve Bank of New York since 2003
- Larry Summers as Director of the National Economic council – served as The World Bank’s chief economist and treasury secretary under Bill Clinton.
- David Axelrod as Chief Advisor – served as Obama’s chief strategist during his campaign.
- Eric Holder as Attorney General – served as Bill Clinton’s deputy attorney general and as Obama’s legal advisor during his campaign
- Harry Reid as Senate Majority Leader – served in the house from Las Vegas and then moved to the senate in 1987.
- Tom Daschle as Secretary of Health and Human Services – was a congressman from South Dakota and minority leader in the senate until he lost his seat in 2004.
- Bill Richardson as Secretary of Commerce – has served as governor of New Mexico and as energy secretary.
- Robert Gibbs as Press Secretary – lead Obama’s communications team during his campaign.
- Paul Volcker as Chairman of the Economic Recovery Advisory Board – served as chairman of the Federal Reserve under Jimmy Carter.
- Robert Gates as Secretary of Defense – is currently serving as secretary of defense under George Bush.
- Rahm Emmanuel as Chief of Staff – is an Illinois congressman and was an aide to Bill Clinton.
- James L Jones as National Security Advisor – was a four-star general who served in the Marine Corps for four decades.
- Nancy Pelosi as speaker of the House and is the congresswoman from San Francisco.
- Henry Waxman as Chairman of the House Energy and Commerce Committee – is a representative in the house for Los Angeles and chairman of the committee on oversight of government reform.
- Janet Napolitano as Secretary of Homeland Security – served as Arizona’s attorney general and became governor of that state in 2002.
- Susan Rice as US Ambassador to the United Nations – was a Rhodes Scholar with a doctorate in philosophy, and held several positions during the Clinton administration including assistant secretary of state under Madeline Albright.
- Arne Dunkan as Secretary of Education – is the head of education in Chicago, the third largest education system in the US.
- Steve Chu as Head of the US Energy Department – is the Nobel-prize winning physicist from the University of California Berkeley.
Generally, Americans are looking forward to the change in government with anticipation. The nonprofit sector has suffered recent setbacks along with the rest of America but a reason for optimism shines as a beacon of hope for all of us. What do you think of Obama’s picks? How do you think these choices will affect your nonprofit?
Plenty of Money
Dec 22nd
When I was a student in primary school, I performed in a production of a play entitled “Plenty of Money”. It was a madcap musical production where a crazy old lady prints her own money to be able to give it to charities. As I listened to what Federal Reserve Chairman, Ben Bernanke has planned to get our economy going again; I was reminded of that crazy musical. We will just print more money!
In the old days, the gold standard, monetary system backed our paper notes with gold and those paper notes were freely convertible into fixed quantities of gold. That was a solid, rule-based system that protected citizens from hyperinflation and other abuses of monetary policy. In 1971, however, the representative gold system collapsed and nations of the world switched to the fiat money system in which paper notes are backed only by use of lawful force and debt payments are collected through taxes.
The Wall Street Journal reported the excitement that everyone but me was feeling about Bernanke’s announcement that the Fed’s would print more money. They said:
“Wall Street that day did handsprings. Even government securities prices raced higher, as if, somehow, Treasury bonds were not denominated in the currency with which the Fed had announced its intention to paper the face of the earth. Economic commentators praised the central bank's determination to fight deflation -- that is, to reinstate inflation. All hands, including President-elect Obama, seemed to agree that wholesale money-printing was the answer to the nation's prayers.”
I read that the root cause of hyperinflation is an unchecked increase in the money supply. So, the question is what is to protect us today from hyperinflation? Should we just print more money in order to keep our country’s businesses, including charitable organizations afloat?
In the old days, the gold standard, monetary system backed our paper notes with gold and those paper notes were freely convertible into fixed quantities of gold. That was a solid, rule-based system that protected citizens from hyperinflation and other abuses of monetary policy. In 1971, however, the representative gold system collapsed and nations of the world switched to the fiat money system in which paper notes are backed only by use of lawful force and debt payments are collected through taxes.
The Wall Street Journal reported the excitement that everyone but me was feeling about Bernanke’s announcement that the Fed’s would print more money. They said:
“Wall Street that day did handsprings. Even government securities prices raced higher, as if, somehow, Treasury bonds were not denominated in the currency with which the Fed had announced its intention to paper the face of the earth. Economic commentators praised the central bank's determination to fight deflation -- that is, to reinstate inflation. All hands, including President-elect Obama, seemed to agree that wholesale money-printing was the answer to the nation's prayers.”
I read that the root cause of hyperinflation is an unchecked increase in the money supply. So, the question is what is to protect us today from hyperinflation? Should we just print more money in order to keep our country’s businesses, including charitable organizations afloat?
Madoff Made Off with Billions
Dec 17th
First there was Freddie Mac and Fannie Mae and the bad mortgage lending. There was the loss of Lehman Brothers and who could forget the AIG Credit Default Swaps that left taxpayers holding the bag. Then the top three Detroit auto makers announced they were pushed close to insolvency. Citigroup announced the layoffs of 75,000 jobs in order to stay afloat. Now, the news of Bernard Madoff’s investing scam leaves you dumbstruck and makes you wonder how so many people could be taken in.
According to Time Magazine, “Many of Madoff's victims never had an account with his firm. Instead, Madoff got much of the money he allegedly stole through so-called feeder funds. These hedge funds were set up by outside investment advisory firms, which marketed the funds to high net-worth individuals and pension funds based on Madoff's supposed long-term track record of positive returns. Other investors lost money through so-called hedge funds of funds, which invested with Madoff as well as other asset management firms.”
Where was the Securities and Exchange Commission? Apparently this scam had been going on for years. A federal judge signed an order on December 15th stating that investors who may have been duped by this scam need the protection of the Securities Investor Protection Act.
Among those hard-hit were Jewish Philanthropists and at least two foundations have been forced to close because they had invested their funds with Madoff. According to JTA, The Global News Service of The Jewish People, The Robert I. Lappin Foundation in Salem, Mass., will shut down after losing $8 million -- all of its money. The Chais Family Foundation also announced its closing on Dec. 14.
Another organization that suffered tremendous losses is JEHT (Justice, Equality, Human Dignity and Tolerance) Foundation that announced they will close at the end of January 2009. The JEHT foundation supports reform of the criminal and juvenile justice systems.
Where did all of this money go and shouldn’t the Securities and Exchange Commission be culpable for allowing Madoff to operate? Give us your thoughts.
According to Time Magazine, “Many of Madoff's victims never had an account with his firm. Instead, Madoff got much of the money he allegedly stole through so-called feeder funds. These hedge funds were set up by outside investment advisory firms, which marketed the funds to high net-worth individuals and pension funds based on Madoff's supposed long-term track record of positive returns. Other investors lost money through so-called hedge funds of funds, which invested with Madoff as well as other asset management firms.”
Where was the Securities and Exchange Commission? Apparently this scam had been going on for years. A federal judge signed an order on December 15th stating that investors who may have been duped by this scam need the protection of the Securities Investor Protection Act.
Among those hard-hit were Jewish Philanthropists and at least two foundations have been forced to close because they had invested their funds with Madoff. According to JTA, The Global News Service of The Jewish People, The Robert I. Lappin Foundation in Salem, Mass., will shut down after losing $8 million -- all of its money. The Chais Family Foundation also announced its closing on Dec. 14.
Another organization that suffered tremendous losses is JEHT (Justice, Equality, Human Dignity and Tolerance) Foundation that announced they will close at the end of January 2009. The JEHT foundation supports reform of the criminal and juvenile justice systems.
Where did all of this money go and shouldn’t the Securities and Exchange Commission be culpable for allowing Madoff to operate? Give us your thoughts.
Human Rights Day – If not now, WHEN?
Dec 10th
Today, December 10th, is the 60th annual celebration, across the globe, of Human Rights Day. This commemoration honors the 1948 adoption of the Universal Declaration of Human Rights by the United Nations. It was the first global effort to proclaim the rights of all human beings. There are 30 articles in the document proclaiming such rights as the right to life and liberty, freedom of expression, equality before the law; and social, cultural and economic rights. Other more fundamental rights include the right to food, the right to work, and the right to education.
The Grameen Foundation is an organization that provides small loans, savings, and other financial services to poor people to help them launch businesses. According to Sarah Campbell of the Grameen Foundation:
- One billion people live on less than $1 a day
- One-in-five people live without adequate water or food
- 26,000 children die each day from preventable causes
Though the U.N. outlined human rights adequately in 1948, our inability to provide even the basics a half a century later is painfully obvious.
“Today, poverty prevails as the gravest human rights challenge in the world. Combating poverty, deprivation and exclusion is not a matter of charity, and it does not depend on how rich a country is. By tackling poverty as a matter of human rights obligation, the world will have a better chance of abolishing this scourge in our lifetime....Poverty eradication is an achievable goal.”
—UN High Commissioner for Human Rights Louise Arbour, 10 December 2006
At this time of year we need to turn our sights outward, to the world, and rather than focus our attention on our diminished 401 (K)s, resolve to help promote the rights of everyone. Why not begin TODAY? What do you think?
Go Techno or Bust
Dec 9th
After his successful presidential bid, Barack Obama still has $30 million left over. During his presidential campaign, Obama raised an unprecedented $745 million, $104 million of which came in the last five weeks immediately before and after Election Day.
Obama’s outspoken desire to change the way politicians raise money through special interest groups - opting instead to raise money on his own and not participate in the public funding system - fueled his record-breaking fundraising. Close to half of the funds raised were by private donations. What was the key to his success? The internet and Obama’s use of technology stand out as the single key factor in his successful fundraising.
Among the technical tools used were the following:
- Individual Fundraising - An easy web experience employing the tactic of keeping the donor on the fundraising web site throughout the entire contribution process, from initiation through authorization.
- Online Advocacy - These tools put users in a position to get information in the hands of policy makers. The idea is that when constituents participate - i.e. write their legislators reach out to news editors and opinion leaders, sign petitions - you get results.
- Outbound Email - There are many rules governing spam and there is software that can handle outbound email more effectively. With the proper emailing tools, you can stay in touch, raise money, and mobilize action - whether you have a thousand constituents or ten million.
- Social Networking - The power of social networking is extraordinary. These tools give your constituents a voice and ideas can be freely exchanged.
- Content Management - The ability to locate, reuse, repurpose and capture content is supremely important to a successful online experience. The tools are ever more sophisticated, but are also becoming essential.
It is clear that a new day has dawned with regard to fundraising. Fundraisers will not be able to compete for those important donor dollars without a technology plan for the future. What are your thoughts?
Food Bank Levels are Down as Demand Goes Up.
Dec 3rd
As layoffs continue to rise and the economy continues to decline America’s food banks are sagging under the increased load according to The Wall Street Journal. According to The New York Times, critical shortages have forced some Food Banks to ration supplies, distribute staples usually reserved for disaster relief, and in some instances close.
Why are we unable to keep up with demand when we most need to? In part, the problem is due to successful farmers. There is less stored in the U.S. Department of Agriculture's Bonus Commodity Program that buys surplus crops in America. When the farmers have no surpluses, it translates to a shrinking program.
The fourth quarter oil and gas prices also contributed to the shortfalls by increasing the price of food as the high distribution costs are passed along through the system.
There is a farm bill currently in the Senate that would raise emergency aid of $250 million a year to Food Banks. Of all of the hands that are outstretched to receive economic aid from the government, this hand would deliver relief directly into the mouths of the people. Rather than allow American Food Banks to close, the Senate needs to move quickly to ensure that our relief programs are still in place when our people really need them, like right now! Your thoughts?
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