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1

I dunno, the whole deal smells a little, how you say, fishy?

For one thing, only taxpayers who itemize on a Schedule A currently enjoy the tax break for charitable donations, which, if this were to be handled similarly in the Tax Code would a disincentive to many "small investors", who might otherwise be inclined to purchase one or two "shares" in their favorite non profit.

Also, I don't necessarily see that this would increase the available pool of money out there currently being donated by private individuals; instead, it would most likely have the effect of shifting their contributions from a straight charitable donation to this "market-driven" structure.

In the long run, it might generate some extra revenue for the non profits, but it sounds more like an investment scheme designed to, like current stock trading systems, maximize shareholder value, which seems to me to be a recipe for disaster when applied to the arts.

Posted by COMTE | November 15, 2006 3:38 PM
2

Don't be hatin on the ETF: it's the greatest invention ever for the small investor in search of diversification.

Posted by Some Jerk | November 15, 2006 4:12 PM
3

Some Jerk:

I'm not hatin' on the ETF. I'm just saying it's a new instrument for gambl—pardon me, investing.

Posted by Brendan Kiley | November 15, 2006 4:30 PM
4

On first reading, this subject seemed odd, turning human suffering, in an aspect, into something for personal gain. Seems odd, but not so odd, if a person forgets that "non-profit" doesn't directly translates into "charity", "serving the poor", "helping the less fortunate", grassroots or not... as in charitable social service agency which feeds the poor, like Boomtown Cafe. This is not so, PBS, The Red Cross, United Way, Audubon Society, WWF, etc. are non-profits with an operating and financial structure similar to for-profit corporations; their benchmarks for success are measured by hard revenue and not such "fuzzy", hard to quantify, concepts as "lives changed for the better", "low income individuals served", etc.

The idea that $600 turns into $960, is odd, if you are talking about how feeding the homeless, or something similar, would add real value onto a tax "donation/investment".

The oddity comes from the concept that feeding the homeless (as in, being a fully functioning, profitable, soup kitchen. Whatever that would look like) can somehow add a 60% value over two years onto the value of the "stock/donation/investment". It is easy to see, if the "non-profit" is something like SAM, Vera Project, PBS, or some other agency that has a hard, tangible, and very financially reportable revenue stream. A stream which is not donor based, but product based. So gains in value could be possible.


I would hope though, that if this sort of "stock" was being issued, private trading companies would be prohibited by law from making any profit from the buying/selling of the stock. Too much public money is already dispersed through quasi-government agencies who "whet their beaks" through fees. Fees which are recorded as profit in the real for-profit sense, but the money was not earned, it came directly from the government to distribute and they took some off the top, as it were. Hopefully all gains would go back to the "stocks" owner and non-profit compan. But that is not the climate of government we live in, so I am very suspicious.

Posted by phenics | November 15, 2006 4:47 PM
5

It's an interesting concept, but I would guess that the costs associated with rating/buying/selling DD shares would more than outweigh the additional benefit that it would bring to the nonprofits.

Also, if you assume that there is a fixed number of dollars that will be donated each year, there would be the potential that this program would concentrate donations in the more palatable nonprofits (Habitat, etc.), at the expense of other very worthy nonprofits that may be less likely to receive a high rating (needle exchanges, chronic public inebriate housing agencies, etc.).

However if the program actually managed to grow the net (after transaction costs) "pie" of donations - it might be worth it.

Posted by Paul | November 15, 2006 5:21 PM

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