The Definition of “Philanthropist” Extends Far Beyond the Wealthy
“I used to think of philanthropists only as people who give their money,” says Sierra Visher Kroha. “You know, you have so much wealth to give away and that qualifies you for the space, but I’ve been learning over the last few years that the majority of philanthropists and actors in the social change community really think of philanthropists as anyone who is giving themselves or their time or their heart and soul to a social cause and it has nothing to do with the money.” Sierra is the Director of Programs and Operations for San Diego Social Venture Partners, a nonprofit focused on accelerating social change in the local community.
Related: Timeless Wisdom: The Golden Mean
They are part of a global nonprofit network (Social Venture Partners). Their model is to pool the money of local donors and use it to fund social projects within the area. But, it doesn’t stop with the money. Those who donate want to be involved in improving the community. SDSVP facilitates this by educating its donors in determining which causes are best to fund and focusing on a theme for the year. Each year SDSVP and its donor members go through a process where they vet applicants and select one or two new groups to fund and support with their time, volunteer services and organizational resources (such as HR, marketing, management, leadership development, etc.).
Co-Creators of Social Change
This model allows for a variety of benefits, but one of the most important is it dramatically reduces communication barriers. “You’re coming to them as an equal, instead of this funder from across the table,” says Sierra. “You’re co-creators in social change. When you come to them with the right attitude, you bridge that cultural gap that sometimes exists from individuals on the funding side and individuals on the nonprofit side.”
Every year SDSVP selects a different social topic their members would like to learn more about. They bring in experts to speak about the topic, thoroughly define the problem and review nonprofit groups that are dedicated to addressing the problem. Then their members select which nonprofit they’d like to award a grant to.
This year the topic is human trafficking in San Diego. “It really opened my eyes,” says Sierra. “I had no idea it was such a problem before we started researching it. It’s huge in San Diego. It’s also huge in a lot of other places in the US.” Human trafficking is whenever someone exploits another person through the use of force, fraud or coercion to do labor– the two biggest problems are sex trafficking and labor trafficking. Sex trafficking and exploitation is estimated to account for $810 million dollars in revenue per year just in San Diego. “It is the equivalent of what the Padres were sold for in 2012,” Sierra added.
This process of reviewing social issues, vetting nonprofit groups and working with them to bring about change creates a whole new paradigm. Many of the members branch out to address issues they are passionate about on their own. “You are embedded in a community of other like-minded people and it helps you connect to different causes – ones that might be more up your alley. And now you have a toolbox to approach them and contribute more than just writing a check at Christmas and waiting for them to ask you again twelve months later. You can actually be part of making the change.”
Here’s Why Bitcoin Won’t Replace Gold So Easily
What a week it was.
First and foremost, I’d like to acknowledge the horrific mass shooting that occurred in Las Vegas, the deadliest in modern American history. On behalf of everyone at U.S. Global Investors, I extend my sincerest and most heartfelt condolences to the victims and their families.
The memory of the shooting was still fresh in people’s minds during last Tuesday’s Hollywood premiere of Blade Runner 2049, which nixed the usual red carpet and other glitz in light of the tragedy. Before the film, producers shared poignant words, saying that in times such as these, the arts are crucial now more than ever.
I had the distinct privilege to attend the premiere. My good friend Frank Giustra, whose production company Thunderbird Entertainment owns a stake in the Blade Runner franchise, was kind enough to invite me along. Despite the somber mood—a pivotal scene in the film even takes place in an irradiated Las Vegas—I thought Blade Runner 2049 was spectacular. Even if you’re not a fan of the original 1982 film, it’s still worth experiencing in theaters. Hans Zimmer and Benjamin Wallfisch’s synth-heavy score is especially haunting.
CNET recently published an interesting piece examining the accuracy of future tech as depicted in the original Blade Runner, from androids to flying cars to off-world travel read the article here.
Still in the Early Innings of Cryptocurrencies
Speaking of the future, I spoke on the topic of the blockchain last week at the Subscriber Investment Summit in Vancouver. My presentation focused on the future of mining—not just of gold and precious metals but also cryptocurrencies.
Believe it or not, there are upwards of 2,100 digital currencies being traded in the world right now, with a combined market cap of nearly $150 billion, according to Coinranking.com.
Obviously not all of these cryptos will survive. We’re still in the early innings. Last month I compared this exciting new digital world to the earliest days of the dotcom era, and just as there were winners and losers then, so too will there be winners and losers today. Although bitcoin and Ethereum appear to be the frontrunners right now, recall that only 20 years ago AOL and Yahoo! were poised to dominate the internet. How times have changed!
It will be interesting to see which coins emerge as the “Amazon” and “Google” of cryptocurrencies.
For now, Ethereum has some huge backers. The Enterprise Ethereum Alliance (EEA), according to its website, seeks to “learn from and build upon the only smart contract supporting blockchain currently running in real-world production—Ethereum.” The EEA includes several big-name financial and tech firms such as Credit Suisse, Intel, Microsoft and JPMorgan Chase, whose own CEO, Jamie Dimon, knocked cryptos a couple of weeks ago.
To learn more about the blockchain and cryptocurrencies, watch this engaging two-minute video.
Will Bitcoin Replace Gold?
Lately I’ve been seeing more and more headlines asking whether cryptos are “killing” gold. Would the gold price be higher today if massive amounts of money weren’t flowing into bitcoin? Both assets, after all, are sometimes favored as safe havens. They’re decentralized and accepted all over the world, 24 hours a day. Transactions are anonymous. Supply is limited.
But I don’t think for a second that cryptocurrencies will ever replace gold, for a number of reasons. For one, cryptos are strictly forms of currency, whereas gold has many other time-tested applications, from jewelry to dentistry to electronics.
Unlike cryptos, gold doesn’t require electricity to trade. This makes it especially useful in situations such as hurricane-ravished Puerto Rico, where 95 percent of people are reportedly still without power. Right now the island’s economy is cash-only. If you have gold jewelry or coins, they can be converted into cash—all without electricity or WiFi.
Finally, gold remains one of the most liquid assets, traded daily in well-established exchanges all around the globe. Every day, some £13.8 billion, or $18 billion, worth of physical gold are traded in London alone, according to the London Bullion Market Association (LBMA). The cryptocurrency market, although expanding rapidly, is not quite there yet.
I will admit, though, that bitcoin is energizing some investors, especially millennials, in ways that gold might have a hard time doing. The proof is all over the internet. You can find a number of TED Talks on bitcoin, cryptocurrencies and the blockchain, but to my knowledge, none is available on gold investing. YouTube is likewise bursting at the seams with videos on cryptos.
Bitcoin is up 350 percent for the year, Ethereum an unbelievable 3,600 percent. Gold, meanwhile, is up around 10 percent. Producers, as measured by the NYSE Arca Gold Miners Index, have gained 11.5 percent in 2017, 23 percent since its 52-week low in December 2016.
Look Past the Negativity to Find the Good News
The news is filled with negative headlines, and sometimes it’s challenging to stay positive. Take Friday’s jobs report. It showed that the U.S. lost 33,000 jobs in September, the first month in seven years that this happened. A weak report was expected because of Hurricane Irma, but no one could have guessed the losses would be this deep.
The jobs report wasn’t all bad news, however. For one, the decline is very likely temporary. Beyond that, a record 4.88 million Americans who were previously sitting out of the labor force found work last month. This helped the unemployment rate fall to 4.2 percent, a 16-year low.
There’s more that supports a stronger U.S. economy. As I shared with you last week, the Manufacturing ISM Purchasing Managers’ Index (PMI) rose to a 13-year high in September, indicating rapid expansion in the manufacturing industry. Factory orders were up during the month. Auto sales were up. Oil has stayed in the relatively low $50-a-barrel range, which is good for transportation and industrials, especially airlines. Small-cap stocks, as measured by the Russell 2000 Index, continue to climb above their 50-day and 200-day moving averages as excitement over tax reform intensifies.
These are among the reasons why I remain bullish.
One final note: Speaking on tax reform, Warren Buffett told CNBC last week that he’s waiting to sell assets until he knows the plan will go through. “I would feel kind of silly if I realized $1 billion worth of gains and paid $350 million in tax on it if I just waited a few months and would have paid $250 million,” he said.
It’s a fair comment, and I imagine other like-minded, forward-thinking investors, buyers and sellers will also wait to make huge transactions if they can help it. Tax reform isn’t a done deal, but I think it has a much better chance of being signed into law than a health care overhaul.
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