Over the past decade, the Foundation's low rate of return on investments has been dismal and embarassing, in part because it reflects poor choices in the use of donors' money and sets a terrible example. The ease with which the Foundation can raise funds is simply not compatible with purchasing 1.5% certificates of deposit on which bankers easily earn 10% or more that we could earn by cutting out the banking middlemen. It's time to set a better example.
Please see pages 9 and especially 10 the Audit Report released in October: https://wikimediafoundation.org/wiki/File:Wikimedia_Foundation_Audit_Report_...
In particular, Foundation investments increased from $38 million in June 2015 to $54 million in 2016, and investment income increased from $445,000 to $813,000.
1. Why is Foundation, which presumably has the benefit of the most brilliant volunteer minds in the world, during years of record high stock market prices, with income so secure that detractors have to beg every year on this list for fundraising to be halted when it reaches its goal, only earning 1.5% interest for its donors?
2. Are there any practical reasons not to liquidate 90% of the Foundation's stock, bond, fund, and REIT investments over the next quarter and deposit the balance in a top-5 nonprofit foundation endowment-grade fund? E.g.: https://institutional.vanguard.com/VGApp/iip/site/institutional/clientsoluti...
3. How does the Foundation intend to convince donors that the endowment is a good idea when investment stewardship is so poor?
4. What proportion is invested in fossil fuel interests?
5. Should we divest from fossil fuel interests?
6. Does the Foundation have any strategic investments in sustainable technologies such as wind and solar power, power-to-gas, gas-to-liquids, underground compressed air and pumped hydro power storage, and composite lumber?
7. Should we divest from interests opposed to single payer health care?
8. Should we divest from interests in support of the payroll tax?
9. Should we divest from educational interests which have not shown a firm commitment to public school class size reduction?
10. Should we divest from interests opposed to increasing public school teacher salaries?
We can offset mutual fund holding investments in such interests with short sales (while there is a risk with doing so, that risk can be completely offset with limit orders.)
Best regards, Jim Salsman
I personally invest in stuff that gives 1.5% to 1.7% returns (the Canadian government mostly). If that is what the foundation is getting it sounds reasonable to me.
Some "bankers" do really well as they have inside details / are building the financial instruments that they are betting against.
Why is it assumed we should be investing in stocks? And where is the evidence that "brilliant minds" do better at stocks than random chance?
The endowment is under separate management from the WMF, with the people running the endowment specialized in that area.
James
On Mon, Dec 12, 2016 at 11:27 AM, James Salsman jsalsman@gmail.com wrote:
Over the past decade, the Foundation's low rate of return on investments has been dismal and embarassing, in part because it reflects poor choices in the use of donors' money and sets a terrible example. The ease with which the Foundation can raise funds is simply not compatible with purchasing 1.5% certificates of deposit on which bankers easily earn 10% or more that we could earn by cutting out the banking middlemen. It's time to set a better example.
Please see pages 9 and especially 10 the Audit Report released in October: https://wikimediafoundation.org/wiki/File:Wikimedia_ Foundation_Audit_Report_-_FY15-16.pdf
In particular, Foundation investments increased from $38 million in June 2015 to $54 million in 2016, and investment income increased from $445,000 to $813,000.
- Why is Foundation, which presumably has the benefit of the most
brilliant volunteer minds in the world, during years of record high stock market prices, with income so secure that detractors have to beg every year on this list for fundraising to be halted when it reaches its goal, only earning 1.5% interest for its donors?
- Are there any practical reasons not to liquidate 90% of the
Foundation's stock, bond, fund, and REIT investments over the next quarter and deposit the balance in a top-5 nonprofit foundation endowment-grade fund? E.g.: https://institutional.vanguard.com/VGApp/iip/site/ institutional/clientsolutions/endowmentfoundation
- How does the Foundation intend to convince donors that the
endowment is a good idea when investment stewardship is so poor?
What proportion is invested in fossil fuel interests?
Should we divest from fossil fuel interests?
Does the Foundation have any strategic investments in sustainable
technologies such as wind and solar power, power-to-gas, gas-to-liquids, underground compressed air and pumped hydro power storage, and composite lumber?
Should we divest from interests opposed to single payer health care?
Should we divest from interests in support of the payroll tax?
Should we divest from educational interests which have not shown a
firm commitment to public school class size reduction?
- Should we divest from interests opposed to increasing public
school teacher salaries?
We can offset mutual fund holding investments in such interests with short sales (while there is a risk with doing so, that risk can be completely offset with limit orders.)
Best regards, Jim Salsman
Wikimedia-l mailing list, guidelines at: https://meta.wikimedia.org/ wiki/Mailing_lists/Guidelines New messages to: Wikimedia-l@lists.wikimedia.org Unsubscribe: https://lists.wikimedia.org/mailman/listinfo/wikimedia-l, mailto:wikimedia-l-request@lists.wikimedia.org?subject=unsubscribe
10% would imply a pretty high risk or a strategy which is not compatible WMF's values.
3-4% would balance risks with profits, there are pretty safe senior bonds with a 2-3% yield which could balance some less-than-best rated bond giving up to 6%. Anyway WMF's mission imply low risks in investments plus avoiding "speculating".
Maybe it would be worth thinking about investing extra funds in countries were they are being originating/they are likely to be spent. For instance, if ESAMS fees are given in Euros it might be possible to use donation in Euros, being "parked" in Euro bonds, to pay them, without pay for exchange, money transfer but, above all, avoiding exchange rate fluctuations-related risks.
Vito
2016-12-12 20:12 GMT+01:00 James Heilman jmh649@gmail.com:
I personally invest in stuff that gives 1.5% to 1.7% returns (the Canadian government mostly). If that is what the foundation is getting it sounds reasonable to me.
Some "bankers" do really well as they have inside details / are building the financial instruments that they are betting against.
Why is it assumed we should be investing in stocks? And where is the evidence that "brilliant minds" do better at stocks than random chance?
The endowment is under separate management from the WMF, with the people running the endowment specialized in that area.
James
On Mon, Dec 12, 2016 at 11:27 AM, James Salsman jsalsman@gmail.com wrote:
Over the past decade, the Foundation's low rate of return on investments has been dismal and embarassing, in part because it reflects poor choices in the use of donors' money and sets a terrible example. The ease with which the Foundation can raise funds is simply not compatible with purchasing 1.5% certificates of deposit on which bankers easily earn 10% or more that we could earn by cutting out the banking middlemen. It's time to set a better example.
Please see pages 9 and especially 10 the Audit Report released in
October:
https://wikimediafoundation.org/wiki/File:Wikimedia_ Foundation_Audit_Report_-_FY15-16.pdf
In particular, Foundation investments increased from $38 million in June 2015 to $54 million in 2016, and investment income increased from $445,000 to $813,000.
- Why is Foundation, which presumably has the benefit of the most
brilliant volunteer minds in the world, during years of record high stock market prices, with income so secure that detractors have to beg every year on this list for fundraising to be halted when it reaches its goal, only earning 1.5% interest for its donors?
- Are there any practical reasons not to liquidate 90% of the
Foundation's stock, bond, fund, and REIT investments over the next quarter and deposit the balance in a top-5 nonprofit foundation endowment-grade fund? E.g.: https://institutional.vanguard.com/VGApp/iip/site/ institutional/clientsolutions/endowmentfoundation
- How does the Foundation intend to convince donors that the
endowment is a good idea when investment stewardship is so poor?
What proportion is invested in fossil fuel interests?
Should we divest from fossil fuel interests?
Does the Foundation have any strategic investments in sustainable
technologies such as wind and solar power, power-to-gas, gas-to-liquids, underground compressed air and pumped hydro power storage, and composite lumber?
Should we divest from interests opposed to single payer health care?
Should we divest from interests in support of the payroll tax?
Should we divest from educational interests which have not shown a
firm commitment to public school class size reduction?
- Should we divest from interests opposed to increasing public
school teacher salaries?
We can offset mutual fund holding investments in such interests with short sales (while there is a risk with doing so, that risk can be completely offset with limit orders.)
Best regards, Jim Salsman
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-- James Heilman MD, CCFP-EM, Wikipedian
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