Stakeholders Capital

A Dialogue with a Japanese Business Ethics Teacher, Dr. Yusuke Yamashita

Andrew — Thu, 16 Feb 2012 16:40:09 +0000

We appreciate meeting Dr. Yamashita virtually via Twitter initially and exchanging ideas. We also appreciate Dr. Yamashita communicating with us in English. Thank you Dr. Yamashita, we look forward to continuing this dialogue and having more in the future.

Below is a recent thread regarding our discussion of profit vs. ethics in socially responsible investing – SRI.

Sincerely, Andrew Bellak

Dr. Yusuke Yamashita, Ph.D.(Doctor of Commerce)

Part-time Lecturer of Komazawa University

Former Part-time Lecturer of Nihon University

my twitter address: http://twtr.jp/user/YAMASHITAnoID/follow

Dear Terry Mollner,

Thank you for your email with your valuable opinions and the literature you wrote. I am very pleased to this meaningful exchange of ideas.

I was very thought-provoking with your opinion.

Difference of opinion of you and me, what is the cause? You are a business practitioner of the United States. I am a scholar of Japan. The cause is there. In Japan, many of the management scholars will go on to graduate school directly, after graduating from the university. And, graduate students will be assistant professor or lecturer directly, after completing graduate school. In other words, they become a management scholar without business experience. That is, I think the Japanese management scholar is a trend likely to have extreme theory.

A typical example is me. A scholar like me, think alternatively the relationship between ethics and profit. However, this thinking can not analyze the reality.

It is necessary to consider deeply for this problem.

Thank you.

Sincerely,

Yusuke Yamashita

From: Andrew Bellak [mailto:andrew@stakeholderscapital.com]
Sent: Wednesday, February 15, 2012 1:20 AM
To: Yusuke Yamashita
Subject: Fwd: Yusuke Yamashita – hope this helps…

Dear Professor Yamashita,

I have a reply for you from our partner Terry Mollner, co-founder of the Calvert Social Investment Funds below. We are pleased to have this international exchange of ideas.

You mentioning Immanuel Kant made me think of Nicholas Nassim Taleb and his 2 books Fooled by Randomness and Black Swan. Taleb calls himself an empirical skeptic. This is an overlap of philosophy, mathematics, and the markets. Ethics are not mentioned specifically.

I found this interesting piece online from a gentleman named Gary North which analyzes the merits of Taleb’s assertions.

Enjoy, I hope it is interesting to you.

http://www.lewrockwell.com/north/north516.html

Thank you,
Andrew Bellak

——– Original Message ——–

Subject:	Yusuke Yamashita – hope this helps…
Date:	Tue, 14 Feb 2012 10:45:43 -0500
From:	Terry Mollner
To:	andrew@stakeholderscapital.com
CC:	TERRY MOLLNER

Mr. Yamashita,

My name is Terry Mollner. I am partners with Andrew Bellak in StakeHolders Capital, Inc. I am also one of the pioneers of socially responsible investing from the 1970s and a member of the board of Calvert social Investment funds in the USA.

From the beginning we have not seen this as a black and white issue. At our mutual fund we set standards for performance by a company in each social area and only invest in companies that meet or exceed those standards. If someone is doing something clearly non ethical, we do not invest in them. However, that is seldom a clear case. Is not paying your employees a livable wage unethical? According to my values it is unethical. However, we cannot make the world the way we want it to be and must live inside it as it is. Therefore, we invest in companies that do not pay a livable wage while at the same time we lobby and promote paying livable wages in our activism activities.

So it is a standards issue. We have over 30 people working at our firm evaluating companies on their social performance to determine that they meet our standards which are not the highest, as are my personal standards, but are somewhere that is moving the society significantly forward. I think this is the best short answer I can give you.

We do believe, and believe we have proven over nearly 30 years that you can make the same financial return investing socially responsibly. We give up some potential profit, for instance for not investing in oil producers, while we make additional profit by not investing in companies that get themselves into serious trouble, both with the law and the public.

Hope this helps you.

You may also be interested in my new book, The Love Skill: We Are Mastering the 7 Layers of Human Maturation. Here is the first chapter.

On 2/6/2012 11:51 AM, Dr. Yamashita wrote:

February 7,2012

Dear Andrew Bellak,

Hello.

I was fortunate to get to know you on Twitter. And I’m proud to be able to interact with you.

First of all, please forgive me that it is not good that I write an English sentence.

I will introduce self again. I am a scholar of Management,CSR,and Business Ethics.

I am a part-time lecturer of Komazawa University in Tokyo, Japan.

And, I am a Kantian.

I would like to ask you about the concept of SRI. The following, I wrote my opinion and questions. Please give me your answer and Impressions.

What is SRI’s importance?

SRI is the ethical investment for the safe investment for investors?

In other words, When the conflict between ethics and profit, SRI choose which of these two? Of course, ethics and profit are met together is the best. But sometimes, must choose only one of these two.

In that case, ethics is priority? so, do not mind even if it means to be a loss to investors?

Cause such extreme question because I am Kantian.

I think the selection will change depending on the values of the fund manager of SRI. So, Consequentialist (such as Milton Friedman or Jeremy Bentham) choose the profit. Non-Consequentialist (such as Kant or me) choose the ethics.

However, SRI is an investment. In other words, profit is required. As a result, SRI will give priority to profits. I think the realization of corporate ethics by SRI, there is a limit.

Questions and my opinion is over. Please give me your answer and Impressions.

Please give your reply. Thank you.

With warmest regards,

Yusuke Yamashita, Ph.D.(Doctor of Commerce)

Part-time Lecturer of Komazawa University

Former Part-time Lecturer of Nihon University

Partner Terry Mollner named to Top 100 Thought Leaders in Trustworthy Business Behavior 2012 by Trust Across America

Andrew — Fri, 13 Jan 2012 21:49:35 +0000

“Purpose

While there are many “top” lists and awards, none specifically address trustworthy business behavior – perhaps because the word “trust” presents a definitional challenge. For three years Trust Across America has been working with a growing team of experts to study, define and quantify trustworthy business behavior. While our research is nowhere near complete, we know that an organization cannot be deemed trustworthy without a culture that embraces the following characteristics: Financial stability and strength, Accounting conservativeness, Corporate integrity, Transparency, Sustainability and long-term Reputation preservation. . . ”

More information and full list of recipients at this link: http://trustacrossamerica.com/offerings-thought-leaders.shtml

StakeHolders Capital partner Terry Mollner is #60 in alphabetical order.

CONGRATULATIONS TERRY!

Thank you Trust Across America.

NYTimes Opinion The Myth of Japan’s Failure By EAMONN FINGLETON Published: January 6, 2012 and Paul Krugman’s response

Andrew — Fri, 13 Jan 2012 18:43:35 +0000

NYTimes Opinion

The Myth of Japan’s Failure

By EAMONN FINGLETON

Published: January 6, 2012

Tokyo

Enlarge This Image

Kosuke Okahara for The New York Times

The fashionable Shibuya neighborhood in Tokyo.

Multimedia

Graphic

What ‘Lost Decade’?

Times Topic: Japan — Earthquake, Tsunami and Nuclear Crisis (2011)

DESPITE some small signs of optimism about the United States economy, unemployment is still high, and the country seems stalled. . . .”

To read full article, click this link: http://www.nytimes.com/2012/01/08/opinion/sunday/the-true-story-of-japans-economic-success.html?_r=2&ref=general&src=me&pagewanted=all

January 9, 2012, 9:30 am

Japan, Reconsidered

A number of readers have asked me for an evaluation of Eamonn Fingleton’s article about Japan. Is Japan doing as well as he says?

Well, no — but his point about the overstatement of Japan’s decline is right. . . .” Full article here: http://krugman.blogs.nytimes.com/2012/01/09/japan-reconsidered-2/?scp=3&sq=japan&st=cse

A Manifesto for Sustainable Capitalism – How businesses can embrace environmental, social and governance metrics. Wall Street Journal Opinion by Al ore and David Blood

Andrew — Mon, 19 Dec 2011 20:25:32 +0000

This op-ed piece by former vice-president Al Gore and his investment firm colleague, David Blood from December 14th 2011, is thought provoking and there were 700 comments on the Wall Street Journal site.

Of note is when they turn a frequent question around:

“Those who advocate sustainable capitalism are often challenged to spell out why sustainability adds value. Yet the question that should be asked instead is: “Why does an absence of sustainability not damage companies, investors and society at large?” From BP to Lehman Brothers, there is a long list of examples proving that it does.”

The article is a reasonable length and worth a read.

http://online.wsj.com/article/SB10001424052970203430404577092682864215896.html?mod=djemEditorialPage_h

MA Secretary Galvin Announces Changes to the Homestead Protection Law (2011)

Andrew — Thu, 15 Dec 2011 20:35:13 +0000

Secretary Galvin [of MA] Announces Changes to the Homestead Protection Law

This is important if you would like to have protection for your home from creditors if you are sued or need to file for bankruptcy. Homestead laws vary by state so please double check this information with an attorney. Filing fees with the registry of deeds are reasonable and you only need to do it once.

Here is the text from the Sec. of Commonwealth’s website:

“Chapter 395 of the Acts of 2010, an Act Relative to the Estate of Homestead, revises and replaces the provisions of the Massachusetts homestead protection law, General Laws Chapter 188. An overview of the new Homestead reform legislation, effective on March 16, 2011, is provided in Secretary’s Galvin’s Homestead Act Questions and Answers pamphlet.

If you filed a homestead declaration prior to March 16, 2011, your $500,000 protection will continue to apply. There is no need to re-file your homestead protections due to these statutory changes. The new law creates an automatic $125,000 protection on homes that do not have a homestead declaration filed at the Registry of Deeds in order to safeguard deposits and situations where a declaration may be incorrectly filed. Homestead protections now extend to pre-existing debts and the proceeds of a sale or insurance coverage.

Trusts are now eligible for homestead protections. For those individuals over the age of 62 (elderly) or legally disabled, the new law now expressly states that a homestead may be filed on each individual’s behalf and the aggregate protection increases to $1 million. Homestead declarations filed on manufactured homes must now be filed at the local Registry of Deeds, not the town offices.

If you are purchasing your new principal residence, your closing attorney must provide you, as a mortgagor, with notice of your right to declare a homestead protection. At that time, you will be asked to acknowledge receipt of this notice in writing.

If you have any further questions or concerns about how the Registry of Deeds can assist you in filing a declaration of Homestead, please do not hesitate to contact the Registry of Deeds office directly. We are here to serve you.

This information is not designed to provide any legal advice or address the practical effect of a claim of Homestead. As in all areas of the law, to fully understand what your rights are you should consult an attorney of your choice.”

http://www.sec.state.ma.us/rod/rodhom/homidx.htm

Slow Food, Slow $, SLOW LIVING Summit, June 1-3, Brattleboro, VT

Andrew — Fri, 18 Mar 2011 12:15:15 +0000

We are helping to spread the word about the June 1-3 SLOW LIVING SUMMIT in Brattleboro.

It will focus on topics of social and economic sustainability with the goal of exploring ways to build healthy, thriving local economies while encouraging, mentoring and supporting a new generation of activists, entrepreneurs and engaged citizens.

The conference tracks should resonate with our audience — they are: food and agriculture; energy and resources; economic issues (business, finances and entrepreneurship); education for sustainability; and quality of life. In the breakout sessions, conferees can learn about diverse topics such as using technology for sustainability, reinventing agriculture, community-scaled renewable energy systems, and how to tap sources of funding for sustainable enterprises.

Speakers, so far, include Sen. Bernie Sanders, environmentalist Bill McKibben, Gardener’s Supply Will Raap, Sustainable South Bronx’s Majora Carter, Stonyfield’s Gary Hirshberg, Trusteeship.org’s / Calvert CSIF & Foundation / StakeHolders Capital’s Terry Mollner, Google’s Matt Dunne, Slow Food’s Josh Viertel, and Vermont Sec. of Ag. Chuck Ross.

Additional information and registration links can be found at www.strollingoftheheifers.com.

Full disclosure: Terry Mollner is helping to organize this event, will be speaking, and our firm is a sponsor.

Barron’s article rebuttal – “CSR? SRI is more mature now” by Terry Mollner

Andrew — Wed, 02 Mar 2011 20:16:17 +0000

Do We Want to Be Fully Mature People
or Immature People?

Here is what is often hard for people to understand about “corporate social responsibility”: there are levels of maturity of being a human being. Our priority determines the level at which we are operating. Why? Because our priority determines everything else we do and we cannot escape having a priority.

Professor Tibor R. Machan recently wrote an article for the Other Voices column in Barron’s with the title “Profit: the Right Standard for Business.”

http://online.barrons.com/article/SB50001424052970204856804576035903879544160.html

What he wrote was not wrong; it was just immature. We have matured beyond his assumption that each person is an island and, therefore, each individual human being naturally gives highest priority to bodily self-interest.

We are all in this together. Throughout history the essence of moral behavior has been defined as giving priority to us all; immorality has been defined as giving priority to anything else. The one place most of us experience what we might call a “local morality” is in the family.

When two people marry and have children, their “definition of self” naturally expands to be “the family.” Thus, their “highest priority” also naturally expands to be what is best for “the family.” Our highest priority is always the result of what we define as “self.”

Jesus, by the way, used this natural expansion of our “self-definition” when we have a family to explain how fully mature people define “self” as “all that is.” He used this natural process to define not only “moral behavior” as “fully mature behavior” but to also point out that it is what gives us the “experience” of happiness. In one interpretation, “God” (all that is) was the “Father” in his use of the family as his metaphor, the “sons” were the children who were at different stages of maturity, and the “wholely spirit” was the “experience” of the “state of grace” when the parents and children reach full human maturity and “together freely choose to define self as all that is.” They then naturally and effortlessly give priority to “the common good of us all,” moral behavior, and consistently experience among themselves the most enjoyable experience possible: happiness.

We are not born with the skill of self-consciousness. It is a skill. We learn it in stages: one layer at a time and each layer builds on the one before it. There are three dimensions to the skill of self-consciousness that need to be mastered to reach full human maturity: the recognition of differences, the recognition of time and space, and the recognition of the oneness of nature. Professor Machan’s thinking reveals that, like many of us today, he has only mastered the first two layers as skills. Therefore, he thinks he is only his body. He does not recognize that his body is fully interconnected with and inseparable from everything else.

As long as he thinks it is the highest layer of maturity to identify “self” as “my body,” he will think anything other than giving priority to the self-interest of his body is naïve or idealistic. Ignorant of the third dimension of the skill of self-consciousness, he will be blind to the fact that this is immoral behavior. He will also interpret the corporation’s contract with the state to be that the corporation’s priority is the bodily self-interest of its shareholders.

No legislature can pass a law for people to be moral. Those on both the political left (communism-socialism) and political right (theocracy) who have tried have failed because the higher layers of maturity build on individual freedom; they do not take it away. There is no paternalism at the higher layers. Moral behavior is a free choice as a result of maturity. Legislatures can only pass laws that encourage it; they cannot legislate people to freely choose moral behavior. It is up to human beings and corporations to decide if they want to be moral or not and nothing the state has done is stopping them. It is solely the freely chosen priority in their decisions. Naturally, not only will all support them in doing so, in appreciation all will run to help them. This is extremely good for business, especially in an information age when privacy is history.

Professor Machan is operating at what I call the “teenage” or “adult” layer of maturity in mastering this skill.

A “baby” does not have the skill of language or self-consciousness. Therefore, it does not have the ability to take the world apart and value some parts more than others. A baby is in an “unconscious state of oneness with all things”: he or she experiences everything as another part of its “self.” A “toddler” discovers differences, like mommy-no mammy, but doesn’t understand time and space and needs what he or she needs immediately. A “child” has learned a language (separate parts – time and space), he or she has identified self as the body, and the highest priority at all times is now “wants”: I am here and the candy is on the table and I want it. A “teenager” discovers free choice: he or she can create the multiple-choice questions rather than only choose an option in those of others. An “adult” has learned that the most important free choice is his or her “beliefs” because they are freely obeyed. What I call “an elder” has discovered the third dimension of self-consciousness: the universe is one indivisible whole and freely chooses to have it be his or her fundamental belief. The result is to freely choose moral behavior. The highest layer of maturity, what I call “the mature elder,” is when we prioritizing these layers of maturity as they have been mastered and turn them into a habit so “the effortless experience at all times” is happiness, the state of grace, enlightenment, etc. This is the natural state of the baby only now with the mature skill of self-consciousness.

Corporate social responsibility (CSR) started out, I will admit and I know because I was one of the early pioneers of it, as an adult layer reaction against other people operating at the adult layer of maturity. We both still thought our natural highest priority was our bodies. At that time we did not understand that we couldn’t avoid giving priority to priorities because the universe is one indivisible whole. So we naively focused on the secondary priorities of companies: we demanded that companies care more about the employees, the community, and the environment. CSR is now maturing. It is now focusing on the highest priority of companies and insisting that the freely chosen highest priority of all people and organizations be the common good of us all, not the shareholders, the employees, the community, the environment, or any “part” of the universe. Professor Machan still thinks it is about who decides where the profits go. It is an answer to the question, “What kind of people do we want to be?” Fully mature people or immature people.

Terry Mollner is Chair of StakeHolders Capital, Inc, a socially responsible asset management firm in Amherst, MA, and of The Love Skill Foundation. He is also one of the founders of the Calvert Social Investment Funds and a member of the board of Ben & Jerry’s Homemade, Inc.

Cool list of Impact Investing / SRI related websites – 200+ entries!

Andrew — Tue, 04 Jan 2011 01:30:07 +0000

http://www.ned.com/group/seeb/ws/social_entrepreneur_funding/

Social Entrepreneur, Social Enterprise and Social Innovation Sources of Funding

A list of 202 social entrepreneur, social enterprise and social innovation funding sources (#socent). The most comprehensive list anywhere as far as I know. By all means if you see something missing, please hit edit above and add to it (you need to be a member of ned.com to edit this page, it takes just a few seconds to join)…

Venture philanthropy, seed stage investing for social entrepreneurs, early stage investing for social innovation

Crowdsourced Funding, Crowdfunding, and Peer-to-Peer Microfinance

Social Entrepreneur & Innovation Friendly Foundations

Top SE College Programs

Social Entrepreneur & Innovation Prize/Awards

Search Tools for Grant Funding

Crowdsourced Funding for Musicians & Bands 

http://www.artistshare.com/

http://www.bandstocks.com/

http://www.feedthemuse.net/

http://www.pledgemusic.com/

http://www.sellaband.com/

http://www.slicethepie.com/

http://www.criterionventures.com /

http://smeforum2010.org/

http://www.socialinvest.org/

http://www.vc4africa.com/

http://www.opencapitaladvisors.c om

Page name: social entrepreneur funding
Last editor: Golden Mean Capital (0)
Date: Fri, 31 Dec 2010 12:21:50 PST
Tags: funding socialenterprise venturecapital
Feedback score: 0

Mission Markets and it’s CEO Mike Van Patten featured in this Impact Investing article (full disclosure, Bellaks are investors in Mission Markets.)

Andrew — Tue, 14 Dec 2010 11:59:54 +0000

Investment Insights

Jeff Benjamin

Archives » Contact » View Bio »

http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20101205/REG/312059990

Impact investing is poised to experience growth surge

Market brings together advisers and clients with enterprises that aim to make a concrete contribution to global change

Recommend (2)

By Jeff Benjamin

December 5, 2010 6:01 am ET

With an insider trading probe sweeping across the financial services industry and a multibillion-dollar sovereign-debt crisis unfolding in Europe, investors might find the feel-good idea of impact investing appealing right about now.

Impact investing refers to a small but growing group of public and private funds that finance a specific cause or enterprise, including microfinance, technology, sustainable agriculture and community development. And while such investments aren’t charitable contributions — though they do have multiyear lockup periods and annual returns in the low single digits — they attract investors of a certain philanthropic ilk.

All in all, the strategy is less about big returns and more about doing the right thing.

“This is for the kind of person who prefers to lend money to a small business that is going to do something with the money, rather than just give it to a big Wall Street bank,” said Ron Cordes, founder of Impact Assets Global 50, an organization that introduces foundations and asset managers to opportunities in the impact-investing space.

The statement might seem jarring when you consider that he also is co-chairman of Genworth Financial Wealth Management Inc., which has more than $25 billion on its third-party asset management platform.

It is Genworth’s model of bringing together investment products for financial advisers and brokerage representatives that Mr. Cordes is intent on building in the impact-investing sector.

Certainly, there is demand for impact investing. According to a report last week from JPMorgan Chase & Co. and the Rockefeller Foundation, the amount of money likely to be sunk into impact investments ranges between $400 billion and $1 trillion. The report estimates a profit potential of between $183 billion and $667 billion over 10 years in five impact investing categories: urban housing, access to clean water, maternal health, education and microfinance.

Such high-dollar estimates should lead to better access to impact-investing products and possibly even registered mutual funds down the road.

To that end, Mr. Cordes is building a database of the largest asset managers in impact investing. The objective is to launch a platform within the next few months that will offer advisers, wealthy individuals and institutions an opportunity to get into fixed-income and equity impact investments.

The nearly 300 companies that will make up the database include Developing World Markets, which has $600 million worth of debt and equity microfinance investments in developing markets; E+Co, which manages a $40 million debt fund that invests in clean-energy projects in developing markets; and Root Capital, which manages a $50 million loan portfolio of short-term working capital to small farms in the developing world.

Microfinance, often considered the primary on-ramp to impact investing, has a variety of ways in which an investor can participate, including loans of a few hundred dollars channeled from an individual investor.

In order to make impact investing feasible for the affluent investors deemed most interested and capable of participating, the market is developing some access points.

Mission Markets Inc., for example, has built a database of $300 million worth of offerings across 13 investments for wealthy investors.

Launched in July, the platform offers private-placement investments in specific companies that fit the impact-investing category.

The platform is restricted to accredited investors, minimums start at about $25,000 and regulatory restrictions prohibit Mission Markets from identifying specific investments.

“There is a demand and the space is growing,” said Michael Van Patten, founder and chief executive of Mission Markets.

“We’re seeing a macro shift away from the way people think about their investments. When you have a catastrophic financial event, people look more closely at what they’re investing in.”

Mr. Cordes said that he thinks that the Mission Markets platform will serve as an investment resource for the asset managers on his Global 50 platform, which will also be restricted to investors who meet certain net-worth and income requirements.

Although experts don’t expect to see an impact-investing registered mutual fund in the immediate future, the retail-class investor is being considered, according to Mr. Van Patten. He said that he hopes to roll out some state-regulated products for smaller investors early next year.

Once Mr. Cordes has his platform up and running, he plans to work on developing a donor-advised fund that will allow impact investing, as well as a menu of multimanager off-the-shelf products.

Questions, observations, stock tips? E-mail Jeff Benjamin at jbenjamin@investmentnews.com.

How 529 plans affect financial aid from the NY State Plan

Andrew — Sat, 11 Dec 2010 19:48:21 +0000

Many parents want to be able to fund their kids dream school. Many also wonder that if they save a fair amount in a state 529 plan how it will affect their chances for financial aid.

The short answer is so far, minimally.

The NY State plan recently explained this in one of their periodic emails to clients.

“How 529 plans affect financial aid

The amount of federal financial aid a college student receives is influenced by his or her participation in a 529 college savings plan.

Who owns the 529 account makes a big difference:

* 529 plans held by parents or dependent students – 5.64% of parental assets contributed to a 529 plan are considered available to pay for college. Therefore, a $10,000 investment will reduce eligibility for financial aid by $564 a year. If the account is owned by a dependent student, the assets will be treated at the parental rate.
* 529 plans held by independent students – 20% of an independent student’s assets are considered available to pay for college. Therefore, a $10,000 investment will reduce eligibility for financial aid by $2,000 a year.
* 529 plans held by grandparents and other relatives/friends – These assets aren’t counted in financial aid calculations because they aren’t owned by the student or the parents; however, a student may have to report distributions received from the account as income for these purposes.

From a federal financial aid standpoint, it’s more advantageous to use parental assets rather than student assets. Keeping this in mind, parents who have saved money in their child’s name using a traditional UGMA or UTMA account should consider liquidating the account and rolling the money over into the custodial version of a 529 college savings plan.

Note also that colleges and universities may apply their own criteria to determine eligibility for financial aid from the educational institution. This may actually constitute a larger portion of the student’s total financial aid package than the federal financial aid portion.

And remember, most financial aid comes in the form of loans, not grants, and must eventually be repaid.

For complete information about financial aid eligibility, you should consult with a financial aid professional and/or the state or educational institution offering a particular financial aid program, since rules and regulations often change.”

https://uii.nysaves.s.upromise.com/content/4th_quarter.html#how_529_plans

In another post, we’ll explain the penalties if one does not end up using the 529 assets for school.