Notes of Note from John F. Ince

Archive for April, 2011

Standard & Poor’s financial storm warning – The Washington Post

Thank you, Standard  Poor’s.

The rating agency’s warning about the possibility it may downgrade the credit rating of the United States is a welcome wake-up call.

Another one. A few weeks back, Pimco, the world’s biggest bond fund, said it was eliminating its holdings of U.S. government debt.

Then the International Monetary Fund lectured the United States in a tone that sounded more suited to a teetering Third World country than the fund’s largest shareholder. A “credible strategy” to stabilize the U.S. national debt is “urgently needed,” the IMF warned.

Now comes Standard  Poor’s to lower its assessment of U.S. Treasury securities from “stable” to “negative” — meaning at least a one-in-three chance the U.S. debt rating could be lowered within two years.

It cited a “material risk” that there could be no agreement on how to deal with medium- and long-term budget issues by 2013. If nothing happens by then, “this would in our view render the U.S. fiscal profile meaningfully weaker than that of peer ‘AAA’ sovereigns,” SP said.

In other words, our greatest intangible asset — the fact that the United States is viewed as the world’s safest investment — could evaporate. Pffft. Interest rates would rise. The economy would tank. The higher cost of servicing the debt and the accompanying collapse of tax revenue would make it that much harder to escape this decidedly unvirtuous circle.

Truth is, you don’t have to be in the ratings business to see how difficult it will be for the United States to avoid this fate. The dysfunctionality of the political system is evident to any casual newspaper reader.

via Standard & Poor’s financial storm warning – The Washington Post.

Philanthropy and Job Creation …PND

Whether you interpret the jobs report that was released Friday by the Labor Department as promising or disappointing, the fact remains that the country is still mired in a joblessness crisis, with an unemployment rate of close to 9 percent. Amidst the talk of how the job market is faring in the business community, nonprofits in the U.S. are quietly creating jobs by cultivating entrepreneurship, ensuring that new jobs are both environmentally sound and pay a living wage, testing (and proving) the viability of worker-owned businesses, and advocating for the necessity of subsidized employment programs.

The Foundation Center and IssueLab joined together to interview six nonprofit and foundation leaders working on the urgent issue of job creation. Learn more about their unique perspectives on the issue and what they think is missing from the national discourse.

via PhilanTopic.

Impact Investing … What is It?

Social impact investing — a concept frequently raised but not clearly defined or understood — presents a compelling opportunity for foundations and philanthropists to maximize the leverage and impact of their work. Innovative philanthropists with higher risk tolerances such as Pierre Omidyar, Jeff Skoll, and Bob Pattillo, along with leading foundations and social impact funds like the Kellogg Foundation, Calvert Foundation, Acumen Fund, and Bill & Melinda Gates Foundation, are increasingly using social impact investing to expand their influence and introduce market-based solutions to the complex world of social change.

The increased interest of the philanthropic sector in social impact investing is driven in part by the desire of philanthropic funders and private investors to fuel sustainable interventions that address economic inequities and systemic, structural barriers to economic and social development. Leaders in the field believe that traditional charity often meets immediate needs but too often fails to enable people to solve their own problems over the long term. Accordingly, the social impact investment approach aims to catalyze the power of private markets to stimulate long-term social, economic, and environmental solutions.

Definition of Social Impact Investing

To date, no single definition of social impact investing has taken hold. The Global Impact Investing Network, a group of organizations working to strengthen the field of social impact investing, defines it as investments that “aim to solve social or environmental challenges while generating financial profit.” This approach contrasts with “socially responsible investing,” which uses negative screens to avoid investments in companies whose behavior is deemed “bad” or “harmful.”

Ashley Allen, via PND –.