Marius Čiuželis on Traditional & Alternative investmentsInvestor / Advisor / Social Entrepreneur14 days ago
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Some quotes first: 1. Activist investor Jeff Ubben has left ValueAct Capital, the $16bn hedge fund he founded, to launch a new environmental and social impact investment company. 2. „Companies, as governed today, with investors asking for more current returns and more buybacks and so forth, aren’t working for society or nature,“ he said. „But I have to prove that there’s a return [in long-term impact], because otherwise . . . you’re not really changing anything.“ <..> „Finance is, like, done. Everybody’s bought everybody else with low-cost debt. Everybody’s maximised their margin. They’ve bought all their shares back . . . There’s nothing there. Every industry has about three players.“ 3. Having an impact fund and a traditional fund under the same roof at ValueAct was „confusing“ for investors, Mr Ubben said. Those who opted for the impact vehicle worried they were leaving returns on the table, and those who opted for the flagship fund worried that about being portrayed as environmentally or socially „unconscious“. „I don’t think these two strategies peacefully coexist,“ said Mr Ubben. Second, that was the essence. If RE investments are driven by "location", "location", "location" mantra, then in "ordinary" investing it is not only "return", "return", “return" anymore. I have been following for the last few years already an emerging and quite fast growing trend in hedge funds space to invest if not "for" then at last "with" social and/or environmental impact in mind. And that will benefit all of us. Even those who are far away from investing.
Activist Investor Jeff Ubben Departs ValueAct to Focus on ESG

Marius ČiuželisInvestor / Advisor / Social Entrepreneur
Gabija, ačiū! 👏
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7 investment lessons from Mom. Part 1. When economies and financial markets clearly go separate ways with economies all over the world searching for a bottom while financial markets flirting at their all time highs it's worth to refresh some basic rules how to safeguard your investment portfolio. And who is the best adviser if not... your Mom? I am sure your Mother has a saying, or an answer, for just about everything… as do most mothers. Every answer to the question “Why?” is immediately met with the most intellectual of answers “…because I said so”. Seriously, Mother is a resource of knowledge that serves us well over the years. They may teach us the basic principles to staying safe in the world of financial investments too. Below you will find some basic rules every Mother teaches hers kids: read and re-read them. Then read again. I am sure they will help you to become a better investor. NB The wisdom I'm sharing with you I found and kept for the future needs few years ago while browsing the internet. It was originally written by Lance Roberts, Chief Editor of the “Real Investment Advice” website, however, the link is not working anymore so enjoy it here. It’s a long read but worth your time. 1) Don’t Run With Sharp Objects! It wasn’t hard to understand why she didn’t want me to run with scissors through the house – I just think I did it early on just to watch her panic. However, later in life when I got my first apartment I ran through the entire place with a pair of scissors, left the front door open with the air conditioning on, and turned every light on in the house. That rebellion immediately stopped when I received my first electric bill. Sometime in the early 90’s, the financial markets became a casino as the internet age ignited a whole generation of stock market gamblers who thought they were investors. There is a huge difference between investing and speculating, and knowing the difference is critical to overall success. Investing is backed by a solid investment strategy with defined goals, an accumulation schedule, allocation analysis and, most importantly, a defined sell strategy and risk management plan. Speculation is nothing more than gambling. If you are buying the latest hot stock, chasing stocks that have already moved 100% or more, or just putting money in the market because you think that you “have to”, you are gambling. The most important thing to understand about gambling is success is a function of the probabilities and possibilities of winning or losing on each bet made. In the stock market, investors continue to play the possibilities instead of the probabilities. The trap comes with early success in speculative trading. Success breeds confidence, and confidence breeds ignorance. Most speculative traders tend to “blow themselves up” because of early success in their speculative investing habits. The speculative trader generally fails to hedge against the random events that occur in the financial markets. This is turn results in the trader losing more money than they ever imagined possible. When investing, remember that the odds of making a losing trade increase with the frequency of transactions being made. Just as running with a pair of scissors; do it often enough and eventually you could end up really hurting yourself. What separates a winning investor from a speculative gambler is the ability to admit and correct mistakes when they occur. 2) Look Both Ways Before You Cross The Street. I grew up in a small town so crossing the street wasn’t as dangerous as it is in the city. Nonetheless, I was yanked by the collar more than once as I started to bolt across the street seemingly as anxious to get to the other side as the chicken that we have all heard so much about. It is important to understand that traffic does flow in two directions and if you only look in one direction – sooner or later you are going to get hit. A lot of people want to classify themselves as a “Bull” or a “Bear”. The smart investor doesn’t pick a side; he analyzes both sides to determine what the best course of action in the current market environment is most likely to be. The problem with the proclamation of being a “bull” or a “bear” means that you are not analyzing the other side of the argument and that you become so confident in your position that you tend to forget that “the light at the end of the tunnel…just might be an oncoming train.” It is an important part of your analysis, before you invest in the financial markets, to determine not only “where” but also “when” to invest your assets. 3) Always Wear Clean Underwear In Case You’re In An Accident This was one of my favorite sayings from my mother because I always wondered about the rationality of it. I always figured that even if you were wearing clean underwear prior to an accident; you’re still likely left without clean underwear following it. The first rule of investing is: “You are only wrong – if you stay wrong”. However, being a smart investor means always being prepared in case of an accident. That means quite simply have a mechanism in place to protect you when you are wrong with an investment decision. First of all, you will notice that I said “when you are wrong” in the previous paragraph. You will make wrong decisions, in fact, the majority of the decisions you will make in investing will most likely turn out wrong. However, it is cutting those wrong decisions short, and letting your right decisions continue to work, that will make you profitable over time. Any person that tells you about all the winning trades he has made in the market – is either lying or he hasn’t blown up yet. One of the two will be true – 100% of the time. Understanding the “risk versus reward” trade off of any investment is the beginning step to risk management in your portfolio. Knowing how to mitigate the risk of loss in your holdings is crucial to your long-term survivability in the financial markets.

Justas JanauskasCEO @ Qoorio
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7 investment lessons from Mom. Part 2. 4) If Everyone Jumped Off The Cliff – Would You Do It Too? At one point or another, we have all tried with our Mom’s what every other kid has tried to since the beginning of time – the use of “peer pressure.” I figured if she wouldn’t let me do what I wanted, then surely she would bend to the will of the imaginary masses. She never did. “Peer pressure” is one of the biggest mistakes investors repeatedly make when investing. Chasing the latest “hot stocks” or “investment fads” that are already overvalued and are running up on speculative fervor almost always end in disappointment. In the financial markets, investors get sucked into buying stocks that have already moved significantly off their lows because they are afraid of “missing out.” This is speculating, gambling, guessing, hoping, praying – anything but investing. Generally, by the time the media begins featuring a particular investment, individuals have already missed the major part of the move. By that point, the probabilities of a decline began to outweigh the possibility of further rewards. It is a well-known fact that the market works in what is called a “herd mentality.” Historically, investors all tend to run in one direction at one time until that direction falters, the “herd” then turns and runs in the opposite direction. This continues to the detriment of investor’s returns over long periods and this is also generally why investors wind up buying high and selling low. In order to be a long-term successful investor, you have to understand the “herd mentality” and use it to your benefit – which means getting out from in front of the herd before you are trampled. So, before you chase a stock that has already moved 100% or more – try and figure out where the herd may move to next and “place your bets there.” This takes discipline, patience and a lot of homework – but you will be well rewarded for you efforts in the end. 5) Don’t Talk To Strangers This is just good solid advice all the way around. Turn on the television, anytime of the day or night, and it is the“Stranger’s Parade of Malicious Intent”. I don’t know if it is just me, or the fact the media only broadcast news that reveals the very depths of human sickness and depravity, but sometimes I have to wonder if we are not due for a planetary cleansing through divine intervention. Back to investing – getting your stock tips from strangers is a sure way to lose money in the stock market. Your investing homework should NOT consist of a daily regimen of financial media, followed by a dose of taxi driver tips, capped off with a financial advisor’s sales pitch. In order to be successful in the long-run, you must understand the principals of investing and the catalysts which will make that investment profitable in the future. Remember, when you invest into a company you are buying a piece of that company and its business plan. You are placing your hard earned dollars into the belief the individuals managing the company have your best interests at heart. The hope is they will operate in such a manner as to make your investment more valuable so that it may be sold to someone else for a profit. This is also the very embodiment of the “Greater Fool Theory,” which states that there will always be someone willing to buy an investment at an ever higher price. However, in the end, there is always someone left “holding the bag”, the trick is making sure that it isn’t you. Also, you need to be aware that when getting advice from the investment bank experts who tell you about a company that you should buy – they already own it – and most likely they will be the ones selling their shares to you. 6) You Either Need To “Do It” (polite version) Or Get Off The Pot! When I was growing up I hated to do my homework, which is ironic, since I now do more homework now than I ever dreamed of in my younger days. Since I did not like doing homework – school projects were almost never started until the night before they were due. I was the king of procrastination. My Mom was always there to help, giving me a hand and an ear full of motherly advice, usually consisting of a lot of“because I told you so…” I find it interesting that many investors tend to watch stocks for a very long period of time, never acting on their analysis, buy rather idly watching as their instinct proves correct and the stock rises in price. The investor then feels that he missed his entry point and decides to wait, hoping the stock will go back down one more time so that he can get in. The stock continues to rise, the investor continues to watch becoming more and more frustrated until he finally capitulates on his emotion and buys the investment near the top. Procrastination, on the way up and on the way down, are harbingers of emotional duress derived from the loss of opportunity or the destruction of capital. However, if you do your homework and can build a case for the purchase, don’t procrastinate. If you miss your opportunity for the right entry into the position – don’t chase it. Leave it alone and come back another day when the Price Is Right. 7) Don’t Play With It – You’ll Go Blind Well…do I really need to go into this one? All I know for sure is that I am not blind today. What I will never know for sure is whether she believed it; or if was just meant to scare the hell out of me. When you invest into the financial markets it is very easy to lose sight of what your intentions were in the first place. Getting caught up in the hype, getting sucked in by the emotions of fear and greed, and generally being confused by the multitude of options available, causes you to lose your focus on the very basic principle that you started with – growing your small pile of money into a much larger one. Conclusion: There is obviously a lot more to managing your own portfolio than just the principles that we learned from our Mothers. However, this is a start in the right direction, and if you don’t believe me – just ask your Mother.

Marija MireckaitėPhotographer. Curious person.
I don't know anything about investing, but you truly have a gift of presenting a complicated topic in such an understandable manner. Keep up the amazing insights!
Life Settlements help Family Offices meet their socially responsible investment goals. Family Offices who haven’t considered them as such should adjust their thinking about this uncorrelated asset class. I am in Life Settlements space since 2012. There were no a single year for dissapointment so far neither it is expected to come. Pls find below and article by our US partner how and why Life Settlements and Socially Responsible Investing go hand-to-hand.

Marius Čiuželis on Traditional & Alternative investmentsInvestor / Advisor / Social Entrepreneur15 days ago
The super-rich will dedicate some $50 trillion to sustainable investments in coming years and blue chip Wall Street firms like Goldman Sachs and Carlyle Group are lining up to meet the demand. Corporations worldwide are cutting their carbon footprints and in the background bold-faced investors such as Norway’s $1 trillion pension fund and $7 trillion in assets BlackRock are putting the screws on carbon-emitters. These are exciting times for the green movement. Boston-based hedge fund manager James Jampel, of $460 million in assets HITE Hedge Asset Management, has a simple way to play the green arms race. He’s betting against the entire carbon industry, which he believes is in chronic decline much like whip-and-buggy-makers at the dawn of the auto age, or Sears amid the rise of Amazon and Eastman Kodak when the electronic camera went mainstream. Basically, the writing’s on the wall for oilmen.
A Different Kind Of Green Investing: Meet The Carbon Skeptic Hedge Fund That’s Up 32% In 2020

Fatima KhechaiMindset coach & Branding consultant
And I man ready for it!
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During my professional career as a wealth manager I had a privilege to work with the first and second generation of wealth creators. We discussed quite many angles of their wealth starting from the sources of accumulation to expected or targeted investment performance, however, one theme was extremely rare. It is succession planning. Succession planning is a process. It's not like flipping on a light switch, or even changing a light bulb one time and then ignoring it. Succession planning is, you might say, a full contact sport, because it requires the current leadership of an enterprise to really roll up their sleeves and dig into the details of the business. The purpose of the effort is to thoughtfully identify and develop a comprehensive strategy for the transition of management, ownership, and control of a family enterprise, but unfortunately many families don't focus on succession planning proactively. They treat it reactively once a triggering event has already occurred, such as the death of the family patriarch or the retirement of a family business CEO. It's worth for families to think of succession planning as beginning much, much further out than that triggering event, because the trigger isn't when you plan, it's when the plan you have gets implemented, and its effectiveness is tested. The plan is what you develop before during calmer times. For business owners that haven't yet started succession planning, what is the first question they need to consider when thinking about eventual succession? The first question is always the same, and that is, what is your goal for undertaking the succession planning in the first place? In other words, what direction are you headed in? Fundamentally, family owned businesses can be transitioned in really only a handful of ways. First, you can pass on a business to the younger generations in the family, thereby creating or continuing a multigeneration family business. Second, you can sell the business either through a private sale or listing it on a public exchange, so basically realizing liquidity while transferring ownership and control outside the family. Finally, there are some hybrid options, which sometimes might include something like transferring ownership to key employees or the like, but basically, those are most fundamentally the end results here. So, next, though, it's important to assemble a team because succession planning is multidisciplinary, and you're going to need multidisciplinary expertise, and then thinking about your team, you might draw upon key employees or existing family or business advisors, members of the family or external advisors who specially work with families on transition and governance, but consider though that eventually you'll need your plan to include a variety of important elements including business, estate planning and wealth or liquidity management issues. So, entering these questions alone and what direction you're heading in, and who do you want to serve on your team can often take quite a bit of time, and families need to think about their goals and flesh these questions out more fully long before they knock into their attorney's office to draft a new operating agreement or trust structure. Those goals are the driver or the foundation of everything else, and it's worth taking time to get that part right. From what size on and type of business is it worth it or needed to do a succession plan? If the goal of succession planning is to ensure a smooth transition from one generation to the next, then any business, regardless of the size of the type that has that goal in mind, should engage in succession planning. Really, the size of the business, the value of the business, and even the industry that the business operates in is largely irrelevant for this purpose. It has everything to do with the family. How transparency and communication comes into the process? Is everyone involved? Communication is absolutely fundamental to this process. In study after study, the key characteristics of families who have successfully maintained family wealth for three generations or more, it boils down to three things, and those are communication, organization, and a shared set of beliefs or values, and interestingly, demonstrating those three traits is even more predictive for maintaining family wealth successfully than it is employing strategies for tax minimization or maximizing investment returns. This is not to say that you must be fully transparent about your questions or concerns for future succession from day one - pitting children against one another is not an effective plan for identifying a CEO. Instead, by failing to communicate with interested parties, or choosing perhaps to involve only those who are employed by the family business in family meetings, is a recipe for discontentment and discord among those who are excluded, and eventually, that dynamic paves the way for potential litigation among family members in the future. What about family philanthropy? How does it play a role in the succession planning process? Family philanthropy is one of the best ways to engage younger generations. Those who work in philanthropy like to say that philanthropy are your values and actions. So, what better way to teach your children or grandchildren what you believe in than by actually acting on those values together through shared philanthropy? Even if they're too young to hold a decision-making power, why not allow them to listen into the meetings where grant-making decisions are made. As an example, a family may allow the youngest generation to actually recommend nominal sized grants at one of their meetings. Family may challenge the children, as young as 10 years old, to come up with a cause that each of them cared about. The ideas might go to wanting them to give to their local school, supporting animals, which is of course very popular among young kids, and actually then helping to improve a local park. The kids then gain a deep sense of satisfaction from this process and feel more closely connected to the family’s philanthropy, and the parents end up learning something about their children and about how they perceive the world, so it’s truly a win-win.
Marius Čiuželis on Traditional & Alternative investmentsInvestor / Advisor / Social Entrepreneur30 days ago
Is the term 'private banking' a thing of the past? The blurring of the lines and business models between the different types of wealth management firms raises important questions over whether 'private banking' is still relevant. Should we stop using it altogether? What does a 50-year old Swiss client adviser from UBS Wealth Management have in common with a 25-year old relationship manager from the VIP offering of a Lithuanian retail bank? In theory, very little. Yet in the way their respective institutions market each of them, and in the eyes of many newly-wealthy individuals, they are both ‘private bankers’. Although a slightly extreme example, this highlights a pressing question which shouldn’t be ignored any longer – what does ‘private banking’ actually mean? Surely there needs to be a clearer and more accurate definition of private banking in today’s environment? And how this differs from ‘wealth management’. After all, many HNW individuals still don’t know what a private bank should really stand for. Various types of organisations – not just private banks – are trying to service HNW customers. These include insurance companies, IFAs, multi-family offices, independent (or external) asset managers, just to name a few. And the existence of multiple providers is a good thing in terms of broader customer choice. The flipside is that it leads to greater confusion in the mind of a customer about who offers what, why and how. Some organisations have been called private banks for over 100 years, throughout which they have served wealthy family’s interests in Europe, the US and Asia. They use well-trained, experienced RMs to tailor centralised investment themes and other solutions to individual client preferences. At the other extreme, some local retail banks have set up ‘private banking’ divisions that are staffed by young, inexperienced salespeople, employed to sell a handful of high-margin funds. Both types of institution can call what they do private banking, employing RMs as client managers. Yet their approaches, and the resulting client experience, are poles apart. In the meantime, the current uncertainty leads to an understanding of what a private bank is and what it is supposed to do. Most organisations are then tarred with the same brush by the clients they serve and are trying to attract. Arguably, the concept even becomes irrelevant. The challenge has also come from those local retail banks carving out an offering targeting HNW clients exclusively. They tend to describe what they do as ‘private banking’ because they think the term possesses cachet. Yet while some clients value quality brands, they are not short-sighted or easily fooled. If self-described private banks don’t offer the substance of quality advice and service they claim in their marketing brochures, they are unlikely to retain much client business. Private banking is certainly less ‘private’ these days than it ever used to be. The compliance spotlight that has started to shine ever-brighter in the wake of the 2008 financial crisis and the race among governments to re-fill their coffers is only likely to further sharpen. The allure of ‘secrecy’ which once surrounded private banking is gone, with the most credible institutions going to great lengths to ensure client assets and any new accounts are from legitimate sources and have valid objectives for needing a private bank. At the same time, the drive towards greater fee transparency and the elimination of retrocessions over time should encourage true private banks to reinforce the value of their discretionary offering. The purpose of private banking should be simple: to offer relationship-based advice and tailored financial solutions to meet specific client needs. With HNW clients becoming increasingly global, this advice needs to be offered on an increasingly international basis, and increasingly through digital means. Banks that employ professionals who are dedicated to getting to know their clients, and then meeting their financial needs in a product-agnostic, transparent manner can rightfully point to their credentials as a private bank. And they can demonstrate the differences they offer. Either way, client education has to play a key role. People who think a private banker just processes transaction orders have the wrong understanding. But if they understand what they can and cannot get from their private bank, everyone will benefit.
The recent spike in Tesla share price clearly broke investors into two different camps. The ones believe Tesla’s valuation is based on technology, “new normal” mindset, while the others notice only “mania” behaviour and for them stock price crash is just inevitable. Disregarding which camp you support more below you will find some ideas for rational investor in irrational markets. “The market can stay irrational longer than you can stay solvent." ~ John Maynard Keynes When the investor herd is irrational, where does that leave the rational investor? Perhaps broke. But there is hope for rationality! The good news is that, in capital markets and in life, irrationality tends to be a short-term phenomenon, while rationality ultimately defines (and eventually wins in) the long term. For a rational investor to survive and thrive in an irrational market, there are a few universal truths to remember and practice. Here's what to keep in mind:
Rational Investing in an Irrational Market
The world has gone crazy: Kodak stock went up by 2300% just to lose 80% of it in the next few days 😱 Kodak shares in just 2 days rose from $ 2.62 to $ 33.2. At its peak, the price reached almost $ 60 and the company's capitalization increased from $ 115 million to $ 4.5 billion. This happened after the news about the receipt from the US authorities of a loan in the amount of $ 765 million to create a production of ingredients for medicines against COVID-19. At the moment, Kodak does not have pharmaceutical equipment, qualified specialists and what else is needed there to produce drugs. There is only a loan, but such a reason is enough for people to buy shares. And, of course, they will not remember the Kodak bankruptcy in 2012 and their attempt to hype the ICO in January 2018. Then, the company's shares rose by 300% from $ 3.15 to $ 11.9, but then something went wrong ...
Kodak Stock Price Crashed 43% Today, Is There An Opportunity Here?
Marius Čiuželis on Traditional & Alternative investmentsInvestor / Advisor / Social Entrepreneur7 days ago
US stock valuations and Fed Balance sheet. Now it’s perfectly clear who drives the rally. Chart from Reuters

Jonathan CairnsCopy writing and editing, lyrics, poems, trying to give up driving
Thank you, nothing like astrolog... Sorry... Economics to make a guy feel dumb!
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Marius Čiuželis on Traditional & Alternative investmentsInvestor / Advisor / Social Entrepreneur11 days ago
Gold bull and bear markets. If this is any guidance, the gold bugs will have a big party. Source: Mark Valek Incrementum AG
So you want to be a successful investor ? It is possible. And doable. Quite easy to be honest. You only need some discipline, common sense, couple of hundred euros every month and 20-30 years. That‘s it. Problem that most new investors face is dullness. Investing is boring. You only have to make one or two transactions every month. For 20 years. And that is it. That is all what it takes to become a successful retail investor. But you want to do more, don’t you ? You want to trade stocks and currencies, invest in the hottest IPOs and ICOs, ride all the waves, short corporate fuck ups and do all the other cool stuff. Everyone wants that. But, at least based on academic and field research, by doing all this you will most likely hurt yourself financially (and emotionally). According to number of studies, activity in financial markets, at least for retail investors, has a high inverse correlation with success. This means that the more active retail investor is, the less he is expected to make over long periods of time. Its up to you to decide whether you want to have some fun or make money. You can either have an expensive hobby called trading or buy a sweater vest, make that one transaction every month and see your portfolio grow. Both routes have their own benefits. Just clearly understand your goals before going down one of them. Investing is simple. It just takes lots of time and discipline.

Mangirdas AdomaitisArtificial inteligence, Data science
Tautvydas what about passive investing while stock picking? Or does stock picking imply high activity?
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What is the Spectrum of Impact Investing Approaches? Given the field’s growth and increased number of actors, the last ten years have also seen a proliferation of definitions and terminology related to impact investing. In fact, strong opinions prevail regarding whether or not the term “impact investing” is the best to capture this field. While some prefer mission-related investing or sustainable/responsible investing, still impact investing is most commonly used. Rather than arguing about the terms, let's discuss three approaches and one overarching strategy to describe impact investor practices. Depending on who you are—and your goals and capacity—you may have the resources and willingness for some but not all of these approaches. See the image of the home as a good metaphor for describing these approaches to managing and being accountable for your assets. Clean Up: This approach reflects the belief that your assets should align with your values, and by holding or divesting specific assets you can increase that alignment and express your values. For example: Clean and remove toxins. Renovate: In this approach, you select assets based on specific investment criteria that define eligible and ineligible investments with the goal of incorporating the positive and negative externalities into your investment decision. For example: Paint your house. Add a Room: By picking a specific theme, you are using your capital to drive the generation of a specific environmental or social impact. For example: Add a new addition to your house. Manage and Measure: This overarching strategy is to continuously measure and manage the positive and negative impact of your assets and respond to new data and events. You will track the emergence of new environmental and social movements, as they become impact investment products. For example: Maintain and repair your roof.
Rockefeller Philanthropy Advisors yesterday published its handbook for impact investors, a refresh of a guide they first published ten years ago, a lifetime ago in impact investing. It is a comprehensive (182 pages) guide to the nuts and bolts of impact investing, with some help from a 45-year old avatar investor named Sophia. With so many people now trying to get themselves oriented in investing their money for social and environmental impact, it is excellent to have a fully updated primer for beginners, and a reference book for the more experienced. The Handbook is available (for free) at:
I dont know her personally yet (unfortunately) but the interview is just another source for inspiration and a clear proof social impact investing is an area where you can profit and make sizable returns.
How One Female Investor Breaks The Rules And Thrives
"The industry has increasingly focused on meaningless, unaudited environmental, social and governance scores. Investing based on categories linked to the UN sustainable development goals is useless, because they do not show whether the money is doing any good." "We need to refocus on people and their suffering. If we truly care about the families <...> we should ask them directly what they want and whether these services have had any effect."
Towards a Hippocratic oath for impact investing
Philanthropy vs Corporate Social Respondibility While both philanthropy and corporate social responsibility (CSR) have the potential to be very effective and are indeed relied upon by those in the charity and not-for-profit sectors, they are very different. The differences between the two can be measured in the return that flows back to the giver. Businesses who engage with the charity sector like to believe that they are doing more than just donating a portion of their net profit to their chosen charity, and in effect have a corporate social responsibility program in place. Truth be known, many businesses who believe they are engaged in CSR, are really only engaged in corporate philanthropy. What is the difference between the two? Philanthropy is often defined as using wealth to bring about social change. A ‘philanthropist’ is a bit like a venture capitalist in the not-for-profit sector; they make a decision to invest a portion of their wealth to bring about social change in something they believe in. There may be an investment of their time and knowledge, but more often than not, the support is financial. The philanthropists desire to participate beyond that can vary, but often they are happy to support from an at arms length. While they will likely seek to find out the impact their funds have achieved for the charity, they will usually not get involved beyond that. For businesses of all sizes that engage in CSR (this domain is not limited to corporate enterprises as the name might suggest), it is in their interest to be involved beyond simply giving money. If a business can turn their CSR into a profit centre, then they are more likely to deepen their engagement, stay strong during hard economic times, and—as they see their CSR have a positive impact upon their own business—give more. A CSR program that is built on the back of a shared experience—wherein there has been the opportunity to engage with a charity beyond a monetary transaction—is likely to return business benefits such as improved morale, increased staff retention, status as an employer of choice, attracting new business, and differentiation from competitors. These benefits are seldom achieved through the donation of money and money alone. If corporate CSR program is limited to the CEO greenlighting donation request received, then in fact it’s not a CSR program, but rather corporate philanthropy. Neither are wrong and one is not better than the other, but if a business engages in a more engaged form of giving with clear objectives in terms of KPIs and ROI from the program, all of those involved will benefit, and therein lies the magic.
Establishing a Family Philanthropy Program It’s not necessary for a family to have a private foundation to establish a family philanthropy program. Studies have shown that individuals receive many of the same benefits from charitable giving regardless of the amount of money that they actually give. Before engaging in family philanthropy, it’s important for the elder generation to first facilitate a family meeting, which should include a meaningful discussion about philanthropy with the entire family—ideally, one where each member of the family proactively participates. Research has shown that: (1) conversations between parents and children about charity have a greater positive impact on children than parents simply serving as a silent role model through their own philanthropic activity; and (2) talking about charity is equally effective regardless of a parent’s income level or a child’s gender, race and age. With the additional help of a neutral professional facilitator, this family meeting also could benefit from the inclusion of effective communication exercises as well as the use of tools to help the family members discover their common values and vision. To maintain a strong family philanthropy program over time, the program should have the following four components: 1. Philanthropic projects should be chosen based on shared family values. 2. Family members should proactively participate in shared decision making. 3. Results should be reviewed and successes should be measured and evaluated. 4. The family should continually learn from experience in order to improve in the future. Children can become part of a family philanthropy program as young as five years old and can begin to play a deeper role with respect to the actual administration and investments of the family philanthropy program before they’re teenagers. The family members could set standards for performance to accompany each grant given as part of the family philanthropy program, and selected charities that attain those standards might be allocated more funds in future years. Each child is capable of proposing and advocating a grant request, which could include site visits to the proposed grantee or even interviews. A family philanthropy program could even require each participant to make some type of personal investment in any organization that will be receiving funds, such as actively volunteering with the organization or making a small personal gift along with the larger donation from the family philanthropy program. As part of the family philanthropy program, each younger family member might be given a relatively small amount to donate to charity on their own, and then a separate larger amount may be set aside for all of the younger family members (for example, siblings or cousins) to give away as a collective unit, in which case they will be required to discuss and agree together on the organization receiving the donation. Many organizations encourage children’s participation in philanthropic activities and would welcome the younger members to visit their facilities and even volunteer, which is often a terrific way to unite family members as they work together toward a common goal. For more substantial donations, particularly ones in which the family name will be recognized, involving the whole family can help instill a sense of pride in the family legacy. As long as the elder generation is not asserting too much oversight or control over the program, family philanthropy almost always is an extremely positive experience for the younger generation.
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