2013 Charitable Contributions and a Unique Way to Leverage Dollars for Your Charity

Many of you are aware that I dedicate a portion of my membership income to charitable causes every year. This year’s contributions are made in 2 parts.

1. Charity: Network for Teaching Entrepreneurship

I am continuing to support Network for Teaching Entrepreneurship through my annual contributions. NFTE provides programs for at-risk students from low income communities across the United States to inspire them to stay in school, recognize business opportunities and plan for successful futures. According to them

Our program model is classroom-based with entrepreneurship curricula that teach math and literacy skills in the context of building a business plan. Programs are rigorous, experiential, and vital to students’ futures, and volunteers from local businesses share their expertise in our classrooms. At the end of the course, the students have a chance to compete for seed capital through a series of business plan competitions, from their classroom, to Regionals, to NFTE’s national competition held in New York City.

I have always believed in helping people to discover their own strengths and use them to improve their economic situation as well as benefit the society and their neighborhoods. This “teach them how to fish” model appeals to me. This year’s contribution was made through Network for Good, which is a donor advised fund.

2. Charity: CRY America through Portfolios with Purpose

CRY America (Child Rights and You) advocates for the rights of underserved, underprivileged and abused children in India and US. It is not a charity in traditional sense, it selects and partners with charities and projects already underway at grassroots levels and supports them with funds, volunteers, experience and networks. Again, I do not believe in handing money over in the name of charity. It is better if the situations and conditions are altered to allow the good to flourish, and this is what CRY America does.

CRY America is my charity pick at Portfolios with Purpose. If you have been following my twitter stream, you must have seen me talk about them. You may have also come across PwP on CNBC and other financial media in the last couple of weeks as they have received tremendous coverage this year on the street. As an investor with an interest in supporting causes near and dear to my heart, I find the model that Portfolios with Purpose is pioneering totally unique and completely deserving of all the media attention it is currently receiving.

How it Works

At a very basic level, it is a stock market game. A player picks 5 stocks at the beginning of the year in his/her portfolio. These stocks are tracked in a simulation (so no real money is at stake) and at the end of the year, the players are ranked by the returns they generate in their portfolio.

In PwP version, a player pays to play the game. The entry fees are reasonable, $100 for Novice level, $1000 for Pro and $10,000 for Masters. Majority of us will play at the Novice or Pro level, with Pro level requiring a certain number of years of investing experience. The Masters level is entirely by invitation and includes players such as Einhorn, Greenblatt, Leon Cooperman, Kyle Bass, etc. The entry fees for each level are collected in a pool for that level and at the end of the contest, the chosen charities of the top 3 players in the class get a share of the pool.

Portfolio with Purpose by itself is a tax exempt registered charitable organization. However, apart for the credit card fees charged when you pay your entry fee to play, there are no expenses so far. It is currently being run by an all volunteer team that is fueled by their passion and they do not receive any compensation (I am sure this will have to change in the future for this to sustain). All monies collected go to charities. I have had the opportunity to interact extensively with the PwP team over the last year and also travelled to New York last week (on my own dime) to attend their 2014 Edition launch party. The party was held at NYSE trading floor (paid for by one of the corporate sponsors – I asked) and it was well attended by well known names in investment management and hedge funds and the support was palpable.

As investors, this is a great chance to match your wits with the best known investors for a year as well as an opportunity to contribute to a great charity. If you end up in the top 3, your contribution is leveraged many times over and this is a call option worth your time.

I have signed up to play in the Pro class and will be picking my 5 stocks before Dec 31, 2013 (which is also the deadline to join). My picks in this game will stay private as they will overlap to some extent with my Premium picks. There is a $1 B minimum market cap requirement so only a few of my Premium picks will qualify. I suspect the next few screens I am going to post will generate a few ideas that I will use here and possibly in the VSG portfolio.

Wish me luck, and if you sign up to play, let me know!

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