Modest Needs

Has someone ever helped you get you out of a hard place with an act of kindness? If so, you should consider passing that gift onto someone else. You can dispense a few $10 bills from your ATM to the homeless in your area; or you can employ this amazing website which does something similar with greater effectiveness.

Modest Needs, a minuscule non-profit, grants modest (under $200) one-time cash gifts to those who require just a little help to get them through a tough time. A need, if honored, is granted within 72 hours, with no strings attached. Modest Needs does this with commendable efficiency via the web (it’s not hard to be broke and still get online), heart-warming sympathy (every request is read by a volunteer), and impressive reach (220 requests granted this year, or 7% of the million dollars sought for). Modest Needs’ entire finances are completely transparent on their website. Since their inception they have spent $0 on fundraising and $0 on advertising. They are astoundingly thrifty (total annual cost to run this charitable operation: $24,000). The rest of the small change they collect goes to those to whom small change can make a big difference. They accept contributions from folks like you. It runs fast all year, not just at Christmas.

The founder Keith Taylor began Modest Needs by giving 10% of his $350 a month earnings as a way to return a no-strings kindness paid to him when he most needed it. He told me, “Those who need help can always ask for it at Modest Needs, absolutely for free. How much money we raise matters less – to me, anyway – than simply providing a vehicle for human kindness.”

It’s quite brilliant. Release a few bucks from your PayPal account. Return a random kindness. Maximize a small gift.

-- KK  

High Tech Start Up

You have a brilliant idea. But for a high tech company to make that idea real is an incredibly complex machine to launch. What you really want is someone who has done this before, someone who can tell you how the bankers really make their money, what dilution means, how to quit your current job ethically, and what you should expect at each stage of “capital development.” What you need is John Nesheim, the guru of high tech startups. He’s been involved with Silicon Valley entrepreneurs for decades and has seen everything. Despite being an engineer, he correctly places great emphasis on the emotional costs (to you) at every stage. This book is the best; it doesn’t hide the nasty side, and it is explicit in an engineer’s way about what you have to do. It’s worth its weight in stocks.

-- KK  

High Tech Start Up
The Complete Handbook for Creating Successful New High Tech Companies
John L. Nesheim
2000, 342 pages

Available from Amazon

Sample Excerpts:

The entrepreneur must realize that the process of raising venture capital never ends. From the first to the last of the fourteen stages of the venture capital formation process.. the CEO is continuously occupied with problems of how to raise the needed capital. Experienced start-up staff members of both successful and unsuccessful companies said the same thing: “You never have enough money, things always take twice as long to do as you think, and there is never enough time to stop raising capital while you focus on running the company.”


Founder CEOs seldom last as employees for more than three years. This is universally lamented by all parties, including the VCs. We will discuss the reasons and cures later in this book. Silicon Valley psychologists report that few founders make it to the IPO without personal emotional trauma.


Get in touch with yourself. That was repeated by many of the people we spoke with. Decide what motivates you: joy of work, love of wealth, the satisfaction of getting further than anyone expected, and so on. And decide what failure means to you, as a person, as a company leader.

Opportunity International

Micro-financing is quite the rage in international circles for one very amazing fact. The payback rate on tiny loans to the workers in developing countries is greater than the payback rate for large loans to their home countries. In other words, from an outright profit perspective, you are better off loaning money to a Bolivian peasant than to the Bolivian government. Furthermore, there is now no doubt that Bolivia itself, and any other country, is much better off if investment goes directly to their poorest citizens than to the government. Several non-profits, starting with the Grameen Bank in Bangladesh, have pioneered micro-credit loans on a large scale and for large investors. I’ve found the easiest way for a helpful citizen to contribute funds to a wide variety of micro-loan programs in different parts of the world is through Opportunity International. Opportunity International has been providing micro loans for 30 years, even before the term microcredit was coined. They work through Trust Banks, groups of 20-30 (mostly women) borrowers who meet weekly for encouragement and to cross-guarantee the loans.

-- KK  

Trickle Up

Rather than dispense loans, Trickle Up issues outright grants, but with strings attached. They provide seed capital and training for micro-enterprise hopefuls. Maybe someone with ambitions for a food stall, or a repair shop. A typical deal is a $100 conditional grant. Unlike in a micro-loan program, grantees don’t have to pay the money back, but they do have to get trained. Grantees must commit a minimum of 250 hours in the first 3 months to their venture, reinvest at least 20% back into it, and keep an account ledger, among other conditions. Last year 10,000 business started via Trickle Up donations, and 30,000 budding entreprenuers benefited from this global program. There is huge emphasis on training for very basic business skills. And follow up expansion grants are offered, too. About 70% of grantees are women.

-- KK  

[Sampa rebuilt her life after rebel attacks by starting a restaurant ]

Die Broke


God punishes one generation when it accepts the undiminished wealth of the previous generation. The way to escape perpetuating generational richity is to die broke. But what about college for my kids, or when I’m sick, old, or retired? This book has answers for you and very specific tactics for the liberation of all from the myth of inheritance.

-- KK  

Die Broke
A Radical Four-Part Financial Plan
Stephen M. Pollan and Mark Levine
1997, 305 pages

Available from Amazon

Sample Excerpts:

You are not a corporation – you are a human being. Your money shouldn’t outlive you. You should exit life as you came into it: penniless. Your assets are resources to be used, for your own benefit and for the benefit of those you love. Every dollar that’s left in your bank account after you die is a dollar you wasted. Use your resources to help people now when you know they need it, when it will do the most good, rather than hoping they’ll be helped when you’re dead. The last check you write should be to your undertaker — and it should bounce.
Inheritance is a terribly inefficient way to pass wealth to others.
You need to shift to a more flexible view of work and career, one that abandons the ultimatum of retirement – a false choice between full-time and no time. Similarly you need to shift to a less rigid approach to earned income. No longer can you look at your earned income as continually increasing up until age sixty-five, at which pint it will stop entirely. From now on you need to approach earned income as you do unearned income. It may grow, it may be stagnant, or it may decrease, all depending on market conditions and your own choices.
The best metaphor I can think of for today’s pursuit of retirement is of a mass of lemmings busily struggling up a steep cliff and then jumping off the cliff into the abyss.
Dying broke means living well.

Fidelity Charitable Gift Fund

The only sane antidote to massive wealth is massive philanthropy. But giving is a habit that is best begun before you are loaded; the great philanthropist Carneige began when he was making a few dollars per week. Indeed, some of the most influential funding in history has been small, but creative, grants.

You can write a check any time the spirit moves you, but like all things in life, they are tools that can improve your aim. One tool of philanthropy is a personal foundation. A foundation gives you flexibility and can increase the amount you can give. However you can spend half your fortune — no matter its size — creating and maintaining a foundation, or you can do it the easy way, a way that is suitable to middle class assets.

The Fidelity Charitable Gift Fund provides most of the functions you, a non-tycoon, might want from a personal foundation. Best of all, it requires a minimum of “only” $5,000.

Here’s how it works:

You deposit your contribution in Fidelity Charitable Gift Fund which in turn invests the amount in one of their mutual fund pools. You get to choose the level of risk/payback you want for your money, but Fidelity chooses and runs the fund. Whenever you want to make a donation, you tell Fidelity, and as long as it is a tax-deductible outfit (it can’t be an individual), they send ‘em a check. You can do this online with a very graceful and easy interface; it even remembers all the details of your frequent grantees, so you just need to click.

The main advantages are four:

1) The money grows. Like a real foundation, your money is invested, and the returns on those investments are reinvested and further enlarge your fund for giving. Depending on what percentage you disperse each year, the total can accumulate significantly. (Fidelity suggests you give at least 5% of your fund each year.)

2) You can gift stock (or securities) directly to the fund. When highly appreciated stock (as in a boom), is cashed out it triggers huge capital gains tax for the owners. With a personal foundation you can donate the stock without cashing it. The Fidelity Gift Fund account is credited with the high value of the stock at market value, but the giver (you) doesn’t have to pay for the huge gains, because those gains are now the gains of a non-profit fund. You receive the normal charitable giving tax deduction for the market value of the stock. You can do the same with ordinary stock investments. Say you were lucky enough to buy 20 shares of Amazon when it was at $20 per share. Say when Amazon hit $200 per share, you decided you wanted to do something creative and meaningful with your small fortune of $4,000. You bestow the Gift Fund with the 20 shares of Amazon, which then credits your philanthropic account with $4,000. But instead of having to pay a capital gains tax on $3,600 ($4,000 minus $400, your cost), you get a tax deduction on $4,000. That $4,000 can then amplify further (see point 1). A common tactic for Gift Fund users is to donate their highest flying, most inflated stocks for maximum philanthropic joy and smallest capital gains pain.

3) It’s free. Well, almost free. Fidelity charges the usual industry standard of any mutual fund (less than 1%), but this is far less than hiring a personal fund manager, or even setting up a private foundation yourself.

4) You get to name your foundation anything you want. Having a foundation of your own focuses attention on keeping it full, and encourages discipline in giving it away.

Because accounts within the Gift Fund are so easy to set up they are often used for giving circles. A giving circle is a group of friends or advocates who decide to combine their resources to fund a cause. They create a virtual foundation without the usual expense and work of setting up a bona-fide non-profit (which is needed to receive funds, but not give them) and collectively research and debate who/where/how to fund their mission.

The Gift Fund is so useful for givers of more modest means that is has drawn in about $2.5 billion dollars, making the collective Fidelity Charitable Gift Fund the third largest public foundation in the US, and the number one foundation in total amount of money dispensed last year. Of course it is not really one foundation, but 27,000 small foundations, many of them pioneering creative philanthropy. You don’t have to fund the opera and hospitals. As an example, here are some donations clients of the Gift Fund recently made:

* Support for a historic preservation speaking tour
* Rebuilding a scout camp destroyed by fire
* Support for an archeological dig in a national park
* Support for Native American students majoring in science
* Supplying an animal shelter with an examination table and equipment
* Support for a summer theater

My experience with the Gift Fund has been great. It was simple to set up, with a minimum of paperwork, and when it comes time to make a donation, the effort is pretty painless. Having a convenient do-it-yourself vehicle, with tax breaks, and investment upside, has encouraged our giving.

-- KK  

Giving Account
Fidelity Investments