01.26.08

Creative Capitalism.. the speach and some discussion

Posted in funds, economics at 5:26 pm by Andrea McGrath

This morning I watched the video of Bill Gates talk at Davos this past week (see here). His theme was ’creative capitalism’ - stretching the reach of market forces to help the poor - and the growing understanding among us all that ”when change is driven by proper incentives you have a sustainable plan for change…” Worth a watch…

And in one of the many responses to Bill Gates speach - Bill Schambra of the Bradley Center of the Hudson Institute sponsored a discussion on January 30th on the potential of “creative capitalism” with a panel which included William Easterly (Brookings Institution and New York University) Eugene Steuerle (The Urban Institute) and Allen Hammond (World Resources Institute). Attached here is the transcript.

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01.17.08

Exchange Exploration: Altruistiq

Posted in exchanges at 4:21 pm by Andrea McGrath

This year we hope to post conversations with the teams behind some of the developing social stock exchanges - both those who are ‘listing’ nonprofits or social enterprises.

Before the holidays I had the opportunity to speak with Neil Abraham, who is one of the cofounders of Altruistiq (or ALEX). The team at ALEX has been operating since June 2007, and they are actively collaborating with thought partners and potential funders in thinking through some of the questions around and challenges in developing a nonprofit exchange. Among the many topics we discussed was how they can establish ‘shares’ in nonprofits that inherently possess value: Why would someone purchase a ‘share’ in a nonprofit (as opposed to simply making a donation) and How could investors in these nonprofit shares get a “return”? Three possibilities for adding value to nonprofit ’stocks’ that they are exploring include: (1) Voting rights: Possibly offering a lower class of voting rights, such as rights in community or local affiliates; (2) Non-cash dividends: such as gift certificates from the nonprofit or some sort of non-cash value from a nonprofit donor or partner organization; and (3) Real cash dividends: Since nonprofits can’t pay out dividends, what if there was an intermediary who could pay dividends on behalf of the nonprofit? What if a market maker or big corporation could “sponsor” the dividends of these shares - and perhaps even tie the dividends to performance? Thus dividends could be paid when an organization hits specific metrics or quarterly targets (this last idea touches on two areas of interest: value of the stock in the form or cash dividend and tying dividend payments to performance measures) Each of these three possibilities could - to a varying degree (as yet untested)- define or create the ‘added value’ of owing a nonprofit stock (as opposed to making a traditional donation). They might also encourage trading of these shares, as ‘new’ donors look to buy these shares (rather than simply donate).. Great questions to explore… If you are interested in connecting with the team - please do email them at: info@altruistiq.com

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