pic by bradhallart 

If there every were financial institutions that deserved some positive sentiment it is the Community Banks and Credit Unions in the thousand communities throughout the United States.  These past few years have only reinforced their importance and underscored that their mission of a financial institution serving their community is the right one. 

It would seem to imply that financial reform should make large financial institutions accountable to those communities in which they reside. 

It would seem to show government that not having loose underwriting standards does not prevent home ownership.  It is really about knowing your customer and the community in which they live.  A computer or person acting like a robot processing paper is not the means to serve a community and build a strong financial institution.

So I congratulate the Community Bank and Credit Unions for not only providing its members with sound financial products but for providing better financial information as well. 

 Pic by shorrbrad

Any time there is a prohibition against a government entity from entering into a business sector it reminds me of self dealing.  This prohibition is not like those patents that provide for so many years without competition to allow for a business to cover their costs of bringing to market the product. 

A fundamental right for communities to have access to affordable electricity, cable, Internet, and phone should automatically require the abolishing nationwide of any law that prevents local governments or cooperatives  from building an infrastructure when the private sector will not. 

If Congress is serious about creating opportunities for growth then it will take the hand cuffs off any entity that can create that opportunity. 

Should nonprofit organizations take risks with their endowment or risk creating an endowment? 

Endowments are constructed to provide a predictable and stable set of returns that will provide additional funds for operating expenses and preserve the purchasing power of the organization’s funds on an annual basis.  The approved wealth management company should provide custom portfolio management to the nonprofit through the procured money management service based on the risk/return profile of the client.  The portfolio should focus on asset allocation and risk-adjusted market performance that protects the principle and grows the assets.

The wealth management company may be able to set up or connect the nonprofit to a sister company to set up retirement plans for the employees.  In the process the wealth management company can manage these assets as well. 

Photo by:  epicharmus

The nonprofit Woodmen of the World, a financial services group has filed a lawsuit against U.S. Bank National Association for $29.7 million in investments it claims U.S. Bank lost.  Woodmen has accused U.S. bank of breach of contract, gross negligence, breach of fiduciary duty, fraudulent misrepresentation and fraudulent concealment.  It is alleged that a portion of Woodmen’s money was invested in high risk securities, which were not doing as well as U.S. Bank led them to believe.  According to the Associated Press, these high risk securities were mortgage-backed securities which have been at the center of our countries financial troubles.To read the rest of this article, please follow the hyperlink to the Avvo web-page.

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Eight credit unions in Michigan for residents only have come up with a unique idea to promote savings and added a little chance. Open a certificate of deposit of $25 of more and get a raffle ticket.  It gives the account holder a chance at winning a prize of $400 for the month and enters them in an annual $100,000 drawing.   The certificate of deposit is federally insured.   Over a 25 week period it motivated individuals to save over $3 million.  

Now that’s a group of banks who have found a way to increase value for its members.  More money to loan its members and an increased savings rate during a recession. 

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In 2007 $92.3 billion was spent on gambling and $57.4 billion saved.   A combined total of $149.7 billion.  According to the National Center for Educations Statistics in 2007 8,986,150 undergraduates were attending a 4 year college and it is expected they will have an average cumulative debt of $12,750.   A cost of approximate $114.6 billion. 

College debt is unhealthy for the economy and is approaching a rate of return that many are finding not worth it.  Most colleges and universities are nonprofits and their pricing is approaching a rate that is not sustainable. 

State run education systems are showing to be the best value for the dollar.   Congress should create a gambling and savings opportunity for individuals to bet on the future of students succeeding from a college degree they obtain at a public college.  The return on investment looks a lot brighter when graduating from these public colleges. 

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Congress is famous for complaining and playing political games with important decisions. In the meantime, businesses spend millions to support foreign countries due to US reliance on foreign oil.

Nonprofits do not need to wait for Congress to begin to lower its energy costs.  Nonprofits should look to foundations and individuals to support the one time cost of installing alternative systems and end up saving in their operating costs.

In the states of California and Massachusetts there is the option to go solar and not have to buy the system.  Thereby, lowering the costs to a few thousand to have installed.

Another option for nonprofits is to think more about establishing cooperatives to lower their energy costs.  Bulk purchasing and implementing a plan energy conservation program as a group will save tens of thousands of dollars when done in conjunction with others.

In a sampling of providers in any particular zip code there seems to be a sufficient number of organizations in any geographic area to make this work.

pic by J Garrettley

Just when you think it is safe to start investing again, there are more surprises.  The Feds agreed with banks to withhold from people who have borrowed money under Tarp, or how one ranked under the Stress tests.  It took a court order to release some of the information.  Now there is another way to beat the small organization or individual investor with high-frequency trading.  It is a technique where lots of trades are executed and canceled in seconds to get a pulse of what is going on in the market to find the best deals and make money.  First, I would ask how many organizations or individuals have the ability to execute and cancel trades in seconds.  Second,  the argument that it makes a more efficient market, I find false since it makes money for a chosen few.  The financial markets need to be open and transparent at all times to be trustworthy.  If the market place can not be regulated appropriately then just maybe it is time to stop certain functions from occurring.  It might be radical for some but it is better than having others make money on the small businesses and individuals.

I guess it is time organizations and individuals create their own heroes to look out for their interest.  I nominate Mickey!!!

 From the Wall Street Journal:

Would people feel more secure about the possible health care overhaul if non-profit companies provided the health insurance rather than the government? When this fall comes around there will be a final vote whether or not to pass the health bill proposed by the Obama administration. Personally, I want to see less government interaction as opposed to more government interaction.

 Let us know your opinions on this topic.

Regarding an Article from the Wall Street Journal:

Wasn’t one of the major selling points for the stimulus package to help people who were falling behind in their mortgage payments? Apperently some of the major banks didnt receive the memo until last month. And even when they did get the memo, the time it takes to get your mortgage modified may take three months if not longer. Congress’ new plan for modifying mortgages Doesnt seem to be much of a relief, seems more like of a headache at the moment.