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Good Causes Oversold Going Bad

Feel like Being Philanthropic and Want an Effective Alternative to Giving to Institutional Non Profit Organizations? Institutional Non Profit Charity Organizations Can Be Spending as Much as 30 to 50 Percent of What You Give on Professional Job Security, Advertising Expenses and Parties. That is Not Really Charitable and Not Really Not for Profit Lex Loeb Contributor Network . Don't Give to the big established charities and philanthropic outfits with big advertising budgets for wooing your contributions. That is because the vast majority of these outfits may be called non-profits but they are anything but. There are only a few charitable non profits that spend 100 percent of the funding they get on the actual cause advertised. Advertising is expensive and so are the professional job security packages these organizations provide to insiders. You even pay for people to go to fancy parties dinners and to host events. You maybe one of those really stupid fools who falls for the con where you agree to run a 10 mile race and friends of yours pledge cash contributions if you go though with it with the funds dedicated to a listed non profit organization. It is amazing how well that con job seems to work. Your friends maybe giving money to an organization with less than 80 percent efficiency meaning the costs before they do any charitable work is 20 percent of what you give. So why are you volunteering to run ten miles or give your money if the people running the organization are not also volunteering their time and money for free? They are professionals who need to get paid to run these big organizations and some one small ones too but you are the one who is supposed to forge ahead and give till it hurts or volunteer your valuable time. There is almost an imperial element in how some of these non profit foundations are run. It even gets worse when you see the non profit charitable organization being used for facilitation of art and culture in society as if well paid organized armies of professional bureaucrats are somehow required as middlemen for supporting the arts! Forget any guilt you have and don't let anyone shame you for not getting on the non profit charity band wagon. You can be doing more good than you can ever imagine investing for profit instead of giving like a stupid fool. When you see the spectacle of billionaires like Warren Buffet and Bill Gates telling you that you should be giving like they are to big non profit organizations just say no. Certainly they have a lot more control over their charitable and philanthropic organizations then you will have if you don't create your own. You will find that besides the big tax breaks for giving to non profits that charitable and philanthropic trusts tend to have jobs available to billionaires family members. The efficiency of how these big trusts are run is hard to gage because what might seem a 90 percent efficiency rate can be diluted to less than 50% because one charitable trust organization shares funding with another one that shares funding with smaller ones and all of these have expensive advertising budgets, fancy parties and well paid professional non profit workers with the best benefits. The American non profit organization world has become a lucrative chow wagon and food chain that has little or nothing to do with real charity. It looks good because of all the slick ad campaigning but it really seems to be a colossal racket. Harvard University became the poster child for non profit scamming when the schools non profit assets surpassed 30 billion dollars in investments and tuition rose above $60,000 per year per undergraduate. Where is the charity there? Some of us wondered when Alumni would just start realizing that giving to Harvard was about creating a financial empire and not really about anything charitable. Eventually It did dawn on some influential Harvard Alumni that things were out of balance and the school started to subsidize tuition a bit. There are plenty of non profit organizations that are so charitable their bank accounts are bigger than some of the largest corporations and some countries. What is charitable about say an organization holding millions of dollars in the bank when they could actually be investing it in cancer research or actual care for people? Do your own philanthropy. Make your charitable contribution directly. You want an alternative to charitable giving where ten or twenty percent or twice that benefits professional standards of living in a posh organization? Just want to give with no return on your money? Put an ad up online and find some family that can't afford their medical bills from a so called non profit hospital. You can help them out and instantly you can get 100 plus percent efficiency for your donation. You might not get any tax deduction but charity is not about tax deductions. That is not the best way to give but it is truly charitable. The best alternatives can be for your own self interest taking a risk on funding research and development. Did you know that an early investment in NIKE corporation could have benefited you with wild returns at the same time it was a huge investment in transforming the lives of thousands of people in third world countries who suddenly found they could get well paying jobs. You read in the newspapers how horrible NIKE was in creating sweat shops around the world. The reality was quite different. NIKE was a godsend for millions of people around the world because before the so called sweat shops sprung up they were lucky to be working in the fields. NIKE helped create the whole industrial outsourcing phenomenon that has led to success for millions in China, Vietnam and elsewhere. The first NIKE outsourcing factories were in Japan and they were far less charitable than setting up in more third world areas of the world. If you want to invest in world peace and prosperity investing in companies that will be outsourcing factory work could be your best bet and might also be as lucrative as an investment as having invested in NIKE once you knew it was outsourcing labor to third world countries. If America really wants to win the war in Afghanistan it would be bringing sweat shops to the country. One would think the Pentagon might have figured it out by now and would make available decommissioned navy ships to install factories in them to go to distant ports where people could use jobs. Want to do the most you possibly can against Cancer, Heart Disease or any other number of diseases? Don't give to the big name organization instead invest in one or more of hundreds of upstart companies that fund research and development for profit. In the past you could have made good money on your investment and did the most you ever possibly could have done by investing in companies that like Amgen, Genzyme and the Human Genome research companies. Amgen was once a small upstart company. You could have made a fortune or prepared yourself to loose all the money you invested in the venture. Amgen was wildly successful it not only became economically feasible it started to generate substantial cash flow and profits . This was because the company was producing real products that helped to fight cancer that doctors and patients were willing and ready to pay for. The amount of good Amgen has done is proportional to it's growth. You could have easily made ten times your money and done about ten times the amount of good for society as having dumped your money in a non profit charity. You might think Amgen is guilty of being greedy or that its products are somehow defective if you want to so then find something else risky to invest in you could have invested in generic drug manufacturing and made an even bigger fortune. If your charitable goal was to get cheaper medicines to the world that needs them there are still generic drug manufacturing outfits that have explosive growth. You could have invested in some big ones overseas in places like India and Israel and made a stunning amount of money doing good! Your money would have been dead the minute you gave it to some stupid listed charity! Those are not the only alternatives. High risk intelligent investments are a much better alternative to charity. The secret is also wanting to be successful which means paying attention not just to the research and development prospects of the companies involved but in their early ability to generate cash instead of becoming a chuck wagon for employees. You can find brand new entrepreneurial investments that may have a real future including electric cars manufacturing, geothermal energy companies, gene therapy companies, new materials companies. The trick to picking companies is to get quality. There are lots of duds that will go nowhere and become a complete waste of your capital. To filter out the duds you don't buy at the initial public offering but wait to see which companies actually have growth prospects. You look for companies that bigger corporations are taking positions in because they are watching the course of the research closer than you can. If you invest in a complete dud and loose all your money , like a non profit organization contribution, you can deduct your loss from your income on your taxes. Want to invest in the arts and culture? You can still invest directly in artists and performing arts productions. To invest in an individual artist you can but the work from the artist and if you are lucky you might have also got an investment worth money in the future or at least something decorative you want to live with. No one should invest in art because they want to make money on it but because one want to be a patron of a type of art one wants to live with. Artists don't want charity they want patrons. The non profit art organizations want charity. How much charitable funding does something like ballet need? If they can't sell enough tickets to pay for their productions does it need charitable funding? Maybe it is not really art or cultural if it lacks patronage? There was a time when buying Microsoft shares could have been your own personal philanthropic project. There was a time when you saw Microsoft trading as a small cap company their mission was to bring computers into everyones home and life. If you read the companies financial statements it was a small cap company riding on a dream and it also started to have revenues and positive cash flow. I found it listed and graded as a company with fair risk at one point having a high price to earnings ratio of 25%. Buying some Microsoft shares back then when there were no home computers would have done more for society than killing your money giving it to any charity. Investing for profit offers more opportunities to change the world in a positive way than any of the non profit offerings. Instead of dropping fifty bucks into a dead money pool save your money and eventually invest a thousand dollars or more in the dreams of entrepreneurs with pure profit motives. Yes you can loose your money but that is charitable and philanthropic if you bet on the best of the dreams. The honesty of the for profit corporation in paying big benefits to management and employees is better than giving to a non profit that serves the same exact purpose without any cut of those profits going to benefit you. The reality of the real success in investing as a form of charity and philanthropy goes beyond Adam Smith's Invisible hand because at this point with the all the evidence we have the invisible hand is so predictable that it almost becomes visible. Your visible hand of giving to recognized charity organizations is a like a hand seen burning money or throwing it down into a dark hole in the ground. The invisible hand of seeking a direct profit motive on the understanding that if something does become profitable it must be beneficial to society then you have to wonder why we have this political favoritism slanted to burning money and throwing it down into dark holes in the ground. Politicians attack the companies that make the most money doing the most good trying to get a cut of their profits in higher taxes and do everything they can to foster the most corrupt and wasteful non profit organizations as if you are too stupid to only judge books by their covers. The invisible hand is so successful that the charitable industry targets the big successful enterprises that have changed the world the most and the politicians want to take their cut too as by always making villains out of them. Getting requests in the mail to give to the nature conservancy or the sierra club? Save your money buy property and maintain it its natural state. It came out that the Nature Conservancy was developing condos on donated golden Walden pond land and that just threw any concept of charity out the window. Giving money to the sierra club is blowing your money on high priced lawyers who want to make your heating bills, water bill and food bills go up to levels where you really can't afford to give them anything. Want to invest in the environment plant a couple of native or rare trees on around your home or if you feel concerned about the hysteria of global warming invest in alternative industries. Invest in fish farming and if you think the world is being over fished. Don't listen to the prevailing nonsense. Invest in nuclear power if you are concerned with carbon in the atmosphere but only invest in the viable companies that are developing a real economically feasible alternative. Don't invest in tax credit energy scams or in burying carbon dioxide where government funding will be required to fund the operation. Believe in recycling you can invest in a company like Schnitzer Steel which has been profitable for a long time doing that. Better yet find smaller companies that are doing what Schnitzer steel does profitably that Schnitzer corp might eventually buy to expand their operations. Funding the invisible hand is always going to be a better idea than putting money as a hand out to hands that are out. When you save your money and put it to use profitably eventually you will have a lot more money to continue being charitable with in the future. No professional charitable workers is going to be better than you in being charitable. What happened to the charitable hospitals in America? Did you know that most hospitals in the USA were founded as charitable organizations. How many hospitals today are truly not for profit? Have you gotten a hospital bill recently? The hospital bills send out eye sore bills in over charges regularly to help compensate them for Medicare and Medicare that don't pay their costs. You would think that hospitals would be aloud to go in dept and stay in debt because they were truly charities. If you really feel like being charitable get together with your church and fraternal organizations and found and fund a real charitable hospital or clinic. You can afford to create a small community clinic by just funding a single doctor. You can create a subsidized clinic where patients only pay half the total cost because you prepay for the doctor, supplies and equipment. More of that kind of charitable giving is better than phony "health care insurance" offered by phony non -profit companies like the blue cross blue shield types that have actually become for profit companies. You can donate money for scholarships that go directly to young doctors in exchange for their working in your clinics later on at a lower salary base. Think outside the box and it will reward you and society and don't turn your money into dead money putting it down a hole. Either give money away directly because you like what it pays for or use let it be guided by the invisible hand where there is a direct profit motive. . Close

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