Skip

Investment Green is People!
March 4, 2010 11:24 AM   Subscribe

Kjerstin Erickson is a 26-year-old Stanford graduate. Would you like to own 6% of her?
posted by william_boot (95 comments total) 7 users marked this as a favorite

 
Only if I get to pick the 6%

*rimshot*
posted by craven_morhead at 11:26 AM on March 4, 2010 [10 favorites]


“So many friends are in the same boat as me — they’re struggling along, wanting to see so much more from their organizations or to let them fly on their own. But it’s hard not being able to get out of the daily grind and raise what you need for payroll,” she said. “The Thrust Fund is appealing because it lets me fast-forward a couple years.”

A couple years headstart, well sure that sounds like a pretty good id

...offering 6 percent of her life’s income for $600,000.

lol
posted by DU at 11:26 AM on March 4, 2010 [5 favorites]


<insert crude comment here>
posted by Bovine Love at 11:28 AM on March 4, 2010 [1 favorite]


Indentured servitude is the new black.
posted by entropicamericana at 11:28 AM on March 4, 2010 [8 favorites]


I'm hope she gets bought out and liquidated by overseas conglomerates.
posted by Damn That Television at 11:29 AM on March 4, 2010 [2 favorites]


That's what I'm hope.
posted by Damn That Television at 11:29 AM on March 4, 2010 [23 favorites]


Does it include the soul? It's a dealbreaker if not.
posted by rtha at 11:31 AM on March 4, 2010 [2 favorites]


craven_morhead: "Only if I get to pick the 6%

*rimshot*
"

I guess you noticed that her promotional photograph poses her with her arms over her head and her wrists crossed.
posted by Joe Beese at 11:31 AM on March 4, 2010


Are there shareholder meetings aka dates? What happens if own a majority share?
posted by meowzilla at 11:31 AM on March 4, 2010 [1 favorite]


A back of the envelope calculation suggests that she would have to earn roughly $250,000 a year after taxes until she turned 65 for an investor to break even, excluding inflation and the opportunity cost of investing elsewhere.

Good luck with that.
posted by Lutoslawski at 11:32 AM on March 4, 2010 [5 favorites]


So her life's income is $10,000,000 (that is to say, assuming there is zero rate of return)? She works until she's 66, let's say, so 40 years...and if I want a 5% return on my investment, she'd have to pay me essentially $4.25M over those 40 years, eh? Did I do that right? So she would have to earn 4.25M * 16.67 + whatever she needs to live off of, call it 100K a year, call it $5M adjusted for low now, higher later. So she would need to earn...$75,000,000 over the next 40 years? $2M a year, in round numbers?

Sign me up, what could go wrong?
posted by maxwelton at 11:32 AM on March 4, 2010


This is a coincidence. I was just reading Kenneth Fearing's "The Big Clock" which uses "Funded Individuals" as an example of a somewhat ridiculous idea the magazine conglomerate in the book is researching.
posted by interplanetjanet at 11:33 AM on March 4, 2010 [1 favorite]


This is kind of interesting for an investment as it automatically hedges itself against inflation. However I do wonder if her creditors might get paranoid about her lifestyle choices and start exerting inappropriate influence.

ring... ring... "Kjerstin, I just saw you in Crackton last Friday... what were you doing there?"

ring... ring... "This is your credit in Amarillo... I heard you were at one of those devil-worshiping Unitarian churches. You know, your future employers might not like to see stuff like that."
posted by crapmatic at 11:33 AM on March 4, 2010


meowzilla, 5.4 million gets you a majority.
posted by craven_morhead at 11:34 AM on March 4, 2010 [1 favorite]


The person that does this once strikes me as the kind of person that would blow through the money early and offer up another 6% a few years down the road. It's just like credit card debt, but without monthly statements.
posted by Slack-a-gogo at 11:35 AM on March 4, 2010 [1 favorite]


This already existed for years, it's called student loans; except they typically take much more of your income.
posted by r_nebblesworthII at 11:35 AM on March 4, 2010 [15 favorites]


I support this, if only for the potentially awesome shareholder meetings.
posted by Sticherbeast at 11:39 AM on March 4, 2010


This already existed for years, it's called student loans; except they typically take much more of your income.

hear hear.
posted by Lutoslawski at 11:39 AM on March 4, 2010 [1 favorite]


The article says she'd have to make $250,000 per year after taxes for the next 39 in order for her investors to make back their investment. So she'd have to average roughly $400k, which means she'd have to outperform the median Stanford grad by about a factor of 4. It seems to me that if she were in a reasonable position to do that well then she wouldn't need $600,000+ in startup funding.
posted by jedicus at 11:39 AM on March 4, 2010 [2 favorites]


is offering 6 percent of her life’s income for $600,000

If she makes 100k/year, 6 percent is 6000 dollars which means it would take 100 years to pay it off without any risk or taking into account to cost of money.

If she makes 500k/year, 6 percent is 30.000 which means it would take 20 years to pay it off (with no interest.)

On a NPV basis (with any reasonable discount rate) she would have to earn a good bit more than 500k per year every year to pay this off in 20 years.
posted by three blind mice at 11:39 AM on March 4, 2010


I was just reading Kenneth Fearing's "The Big Clock" which uses "Funded Individuals"...

Actually, there was a Heinlein book that mentioned something like this too, in passing. I can't remember if it was Jubal Harshaw, but one of those Wise Old Men said he found medical students, law students, etc and helped them through school with the proviso that they would provide him with free services in perpetuity. That sounded like a good idea. This one sounds like the opening scene of a dystopian novel.
posted by DU at 11:39 AM on March 4, 2010 [3 favorites]


This reminds me of that one seminar I was in where I tried to explain some education spending figures by saying that "slavery solved the human-capital problem."
posted by grobstein at 11:40 AM on March 4, 2010 [2 favorites]


I could probably bundle together a couple of community college types and sell them off at the same risk level I'd get with one Stanford grad, right?
posted by nowoutside at 11:40 AM on March 4, 2010 [27 favorites]


Tell you what, I'm 42 or so, and for $500,000 you can buy 25% of my remaining life's earnings.*

* Note, if I get four investors I'm retiring and my income is going to be measured in beer.
posted by maxwelton at 11:41 AM on March 4, 2010 [5 favorites]


Didn't David Bowie do this, too?
posted by Cool Papa Bell at 11:41 AM on March 4, 2010


I suppose it's occurred to all of us but has just not been said that she likely knows there will be no takers but can still get a lot of press from even presenting the idea.

Much like the stories of the restaurants that sell "$5000 hamburgers," the buyer (if they exist) is usually a friend of the restaurant owner, no cash trades hands, and everyone gets good press. I'm surprised we still find it surprising.
posted by Doug Stewart at 11:41 AM on March 4, 2010 [3 favorites]


I'd buy that for a dollar!
(sorry, couln't resist)
posted by nielm at 11:41 AM on March 4, 2010


No thanks - if I'm dropping 600 large I'd rather not have to wait several years to get fucked.
posted by Inspector.Gadget at 11:42 AM on March 4, 2010 [7 favorites]


This is brilliant. She should be marketing this to the art world simultaneously as a living work of performance art of which you can purchase a share.

In twenty years when it's possible she can clone herself repeatedly and spawn off franchises.
posted by Babblesort at 11:42 AM on March 4, 2010


i'd own her for free if she would accept my rock paper scissors challenge.
posted by the aloha at 11:43 AM on March 4, 2010 [1 favorite]


I should also note I'm not particularly pretty, please don't let this influence whether you invest or not.
posted by maxwelton at 11:45 AM on March 4, 2010


nowoutside: “I could probably bundle together a couple of community college types and sell them off at the same risk level I'd get with one Stanford grad, right?

Well, only if you separate out and sell off the best parts of each one.
posted by Kadin2048 at 11:47 AM on March 4, 2010 [2 favorites]


A lot of these nudge-nudge comments might seem crass and obvious if she hadn't named it the Thrust Fund. Dude, really.

Also:

Didn't David Bowie do this, too?

Yes, Bowie Bonds.
posted by Halloween Jack at 11:47 AM on March 4, 2010 [2 favorites]


So how motivated is a Stanford graduate with $600k vs. one who has no money?
posted by ODiV at 11:47 AM on March 4, 2010 [7 favorites]


I am so hoping that she finds VC stupid enough to take her up on this, dumps the whole 600K into her non-profit, and then works as an elementary school teacher for the rest of her life.
posted by Valet at 11:48 AM on March 4, 2010 [6 favorites]


Kjerstin huh.

How much for just the 'j'?
posted by delmoi at 11:55 AM on March 4, 2010 [2 favorites]


I'm trying to figure out the ramifications of her inevitable bankruptcy and whether or not the investors will try to be listed as secured creditors, and what part of her they will claim as security.
posted by norm at 11:57 AM on March 4, 2010


How much for just the 'j'?

$20, same as.... never mind.
posted by Dr-Baa at 11:58 AM on March 4, 2010 [3 favorites]


We should hook her up with that Susan bobblehead person, she's definitely going to need a personal assistant to manage the $600k.
posted by Dr Dracator at 12:01 PM on March 4, 2010


Didn't David Bowie do this, too?

Dress up as a woman and pose for pictures, yes. Though he did it for record covers.
posted by Blazecock Pileon at 12:04 PM on March 4, 2010 [11 favorites]


This is incredibly cool and I wish I'd thought of it.

I am so hoping that she finds VC stupid enough to take her up on this, dumps the whole 600K into her non-profit, and then works as an elementary school teacher for the rest of her life.

If it was me, the instrument would be structured so as to diminish this risk. How to do that is an interesting problem. The obvious approaches are probably 13th Amendment-barred. (Speculatively) maybe you would negotiate for some default triggers that give you the power to convert to high priority debt if she's not meeting some kind of anti-waste benchmarks.
posted by grobstein at 12:06 PM on March 4, 2010


If only I wasn't already heavily invested in 20x200 prints.
posted by box at 12:09 PM on March 4, 2010


$600K? Hell, I'd offer 25-50% of my lifetime income for that chunk of change. Assuming I didn't have to pay taxes on it, that's 15 years of work-free income at $40,000/year, 20 years at $30K, or 25 years at $24K. Tax-free. Not even counting interest/investment returns.

Let's just say the odds are high that if someone offered me $600,000 for 50% of my lifetime income, there's a strong possibility they'd be receiving 50% of 0 dollars. Of course, that might explain why I don't have angel investors beating down my door with offers.
posted by explosion at 12:14 PM on March 4, 2010 [1 favorite]


It doesn't surprise me that the person behind this is a Stanford graduate. A perfect Stanfordite boondoggle.
posted by blucevalo at 12:18 PM on March 4, 2010 [2 favorites]


Someone who knows more about the tax code may have a different opinion, but I think depending on how this is structured, the $600k would either be income (taxed, and at a higher rate than your $30k/yr) or as a gift, which surprise surprise, is taxed as income to the recipient. Not much of a tax shelter here, though to be fair I learned just enough tax to get through the exam.
posted by craven_morhead at 12:18 PM on March 4, 2010


Someone who knows more about the tax code may have a different opinion, but I think depending on how this is structured, the $600k would either be income (taxed, and at a higher rate than your $30k/yr) or as a gift, which surprise surprise, is taxed as income to the recipient. Not much of a tax shelter here, though to be fair I learned just enough tax to get through the exam.

You're right and that would be horrible (I don't think gifts are taxed as income to the recipient, but a gift of that size presumably would be taxed -- there's a little bit of confusion because the gift and estate taxes are crazy right now).

Presumably you would try to characterize this as a contribution of capital instead (which would be untaxed). You might create a separate entity which owns the income stream somehow, and then characterize the $600k as a Section 351 transaction.
posted by grobstein at 12:23 PM on March 4, 2010 [1 favorite]


not legal advice, just rank speculation.
posted by grobstein at 12:24 PM on March 4, 2010


I am so hoping that she finds VC stupid enough to take her up on this, dumps the whole 600K into her non-profit, and then works as an elementary school teacher for the rest of her life.

This. Otherwise, the person who makes this investment is providing a financial incentive to take a bright (if crazy) young professional out of meaningful work and move them into money-making. Which can also be meaningful but isn't.
posted by gurple at 12:28 PM on March 4, 2010 [1 favorite]


You all laugh, but what if you'd invested $600,000 in Bill Gates before he dropped out of college?
posted by blue_beetle at 12:32 PM on March 4, 2010 [2 favorites]


Yes, there are people who go on to earn enough that this investment, made in them, would pay off.

And yet, it's still a phenomenally stupid investment.
posted by kenko at 12:34 PM on March 4, 2010


BIG SPENDERS IF YOU'RE READING THIS I OFFER YOU A SHARE OF ME FOR ONLY $100,000

Here's what you get:

- Rights to have me follow you around from time to time and when you say something witty I go "Ha ha ha, nice."

- When you ask "Am I losing my hair?" I playfully let my fingers dawdle upon your shoulder and whisper "Not where it counts"

- I make a mean omelet

- Do you have a dog? I will pet that dog and maybe take it for a walk

- You know that old fence that needs painting in the backyard, well I will say "Aw forget about that old fence let's eat some olives" (NOTE: YOU MUST PROVIDE THE OLIVES)

- maybe a jumping contest of some sort

THINK ABOUT IT. MY STOCK EXCHANGE NAME IS GREG

posted by Greg Nog at 12:38 PM on March 4, 2010 [65 favorites]


So she's looking for a person with lots of money who is also bad at math. There aren't a lot of those, save perhaps some celebrities and lottery winners.
posted by davejay at 12:40 PM on March 4, 2010


Metafilter: not legal advice, just rank speculation.
posted by backseatpilot at 12:40 PM on March 4, 2010


You all laugh, but what if you'd invested $600,000 in Bill Gates before he dropped out of college?

My parents have invested a significant amount of cash in me, but I think they've realized their mistake by now.
posted by Think_Long at 12:40 PM on March 4, 2010 [13 favorites]


Back of the envelope calculation. 6% of her looks like about 7 pounds. If she starts really pigging out soon, I could double that investment in a year.
posted by dances_with_sneetches at 12:51 PM on March 4, 2010 [1 favorite]


You all laugh, but what if you'd invested $600,000 in Bill Gates before he dropped out of college?

If you knew Bill Gates was going to be a success, you could simply have invested in Microsoft when it went public, it's gone up 28,298%. So $600k invested in MSFT in '86 would therefore be worth $169,788 today, but that's not counting dividends.

If you'd sold your stock in '99 it would have been worth $350 million.

---

As far as the tax issue is concerned, couldn't you just structure this as a loan?
posted by delmoi at 12:54 PM on March 4, 2010


Er, I mean $169,788,000 today, for $600k invested in MS in '86.
posted by delmoi at 12:56 PM on March 4, 2010


As far as the tax issue is concerned, couldn't you just structure this as a loan?

The income stream looks like profit participation, which (I think) is a feature of equity in tax. Debt-equity characterization in tax looks through the form to the economic substance of a transaction (I think), so simply saying this was a loan is unlikely to change how it is treated for tax purposes.
posted by grobstein at 1:00 PM on March 4, 2010


As far as the tax issue is concerned, couldn't you just structure this as a loan?

Aren't there laws against open-ended loans in order to prevent indentured servitude?

I know they have the buy-out clause in their thrust fund and all, but I don't quite grasp where this is and isn't illegal.
posted by Think_Long at 1:00 PM on March 4, 2010


I'd buy it.
posted by swift at 1:03 PM on March 4, 2010


Board of Director Meeting Minutes
Kjerstin Erickson, LLC

Board Members: geoff.
Quorum? Yes

Other's present: No
Proceedings:
- Meeting called to order at 3PM, 3/4/2010

Chief Executive's Report:
- Recommends having another party where Kjerstin's hot friend, Alice, shows up.
- Asserts that we must persuade Kjerstin to deliver more reports to her hot friend on how cool we are, how we have good taste in music, and how we're totally not creepy.
- Belief that next quarter results on hooking up with one of Kjerstin's other hot friends, or even the okay one who seems kind of clingy, are much better now that we have obtained capital funds for the purchase of a really nice 3-series.

Long Term Capital Committee's Report:
- Strong long-term growth in acquiring a boyfriend or girlfriend with significant cash reserves and with 50% liquidation options at 10-year, 20-year milestone.
- Short term, high yielding but low quality acquisition will be difficult in current climate.
- Recommendation against expanding into Law School market in the belief that market has dried up in 3 to 7 year outlook.

Finance Department Report:
- Immediate move to exit whatever the hell the African housing thing you're doing is and totally getting a job at Facebook.

Other Business:
- Direct Kjerstin to stop calling back Paul, he's a complete loser who only got a job at that hedge fund because his uncle works there and his continued instance that he is a "bear" that "does well in a down market" just really irritates us.

- Meeting is adjourned at 3:15PM
posted by geoff. at 1:25 PM on March 4, 2010 [12 favorites]


I'd put that.
posted by Mental Wimp at 1:36 PM on March 4, 2010 [1 favorite]


I'd offer her the same deal I've offered everyone else in her position: a low stress, short hours internship, comes with a good lunch, not much cash, genuine attempt to further her career with introductions and the revealing of certain trade secrets. If she gets in a real pickle, there may be an emergency small wad of cash, and possibly even a crash pad if she gets stuck between living spaces. In exchange, I'll take a lifetime of loyal friendship, and the pride of watching her do well later in life.
posted by StickyCarpet at 1:42 PM on March 4, 2010 [2 favorites]


I bet with the $600K I could then convince 30 other people to sell me 1% of their future earnings for about $20K a pop.
posted by mach at 1:56 PM on March 4, 2010


> Actually, there was a Heinlein book that mentioned something like this too, in passing.

It's in Mary Doria Russell's The Sparrow, as well.
posted by The corpse in the library at 2:07 PM on March 4, 2010


I bet with the $600K I could then convince 30 other people to sell me 1% of their future earnings for about $20K a pop.

Or just invest in a credit card company.
posted by delmoi at 2:18 PM on March 4, 2010


Greg Nog says: When you ask "Am I losing my hair?" I playfully let my fingers dawdle upon your shoulder and whisper "Not where it counts"

I don't even know what this means. But I know it's magical.
posted by dnesan at 2:18 PM on March 4, 2010


Well that's a whole new spin on "DO YOU WANT A PIECE OF ME?!?"
posted by mazola at 2:36 PM on March 4, 2010


Yeah, that Thrust Fund business makes me suspect that this is fake.
posted by Maias at 2:39 PM on March 4, 2010


Actually, there was a Heinlein book that mentioned something like this too, in passing.

It's in Mary Doria Russell's The Sparrow, as well.


I'm going to have to read all books that have this as a plot device. Sort of a book group theme.
posted by interplanetjanet at 2:42 PM on March 4, 2010 [1 favorite]


But Furst couldn’t get over the uncomfortable idea that such a contract equated to indentured servitude. So he structured a buyout clause in the agreement that lets the investee repay a multiple of the initial amount if they want to exit the agreement. If they decide to buy themselves out in less than three years, he’ll ask for three times the investment. But if they wait, the multiple rises with every year until it reaches a maximum of ten times the initial amount.


I'm just going to let that speak for itself.
posted by djgh at 2:45 PM on March 4, 2010


Yeah djgh, that did not make sense to me. Here's what I don't get: if the penalty for exiting the deal for the investee is so disproportionately high, how is that not the equivalent of enslavement? Is that not exactly what indentured servitude is - impossibly high payoffs?

It's like the only possibility they have allowed for is extreme success. If the investee gets rich really quickly, they can pay off the loan with 3x initial investment. If they don't get rich until a few years later, it will only cost them 10x initial investment. What happens if they don't get rich at all? It's pretty hubristic to not allow for failure. Am I missing something?
posted by Think_Long at 2:54 PM on March 4, 2010


*sigh* OK does this include her marriage prospects or if she starts selling her eggs? Calling it a thrust fund implies all sort of relationship potentials as part of her earnings and when she divorces, does the investor get a piece of that too?
posted by jadepearl at 3:01 PM on March 4, 2010


I had this EXACT idea a few year ago but decided it was too much of a bad sci-fi novel idea. IN THE FUTURE EVEN PEOPLE ARE CORPORATIONS
posted by GilloD at 3:05 PM on March 4, 2010


NOTE: YOU MUST PROVIDE THE OLIVES

That's it-- deal's off.
posted by Fuzzy Monster at 3:23 PM on March 4, 2010


This idea isn't entirely crazy for an investor if you spread the risk out over, say, the entire Stanford class. The main issue is it's a form of indentured servitude; either th at or the incentives between the investor and the asset are all misaligned.

The Bowie Bonds aren't quite the same thing: they were collateralized by Bowie's royalty portfolio, not his personal earnings. I wonder how they worked out? There's a lot of stories about how in 2004 things were looking grim, but I haven't seen any updates since then. The issues were bought up by Prudential and were a 10 year note issued in 1997. How well did they end up paying out?
posted by Nelson at 3:30 PM on March 4, 2010


Would a shareholder also get 3% of her children?
posted by NikitaNikita at 3:30 PM on March 4, 2010


or as a gift, which surprise surprise, is taxed as income to the recipient.

This is completely wrong. There's no chance the IRS would regard this situation as a gift, of course, but even leaving that aside it is completely wrong. Gifts are never taxed as income for the recipient. Hell, gifts are never taxed at all for the recipient.

I guess you noticed that her promotional photograph poses her with her arms over her head and her wrists crossed.

I actually did notice this and I'm having trouble coming up with a non-creepy interpretation of that photo. I assume it has something to do with the tattoos or whatever she's got on her wrists (they're too small to make out) but it just looks like she's offering to have her wrists tied.
posted by Justinian at 4:45 PM on March 4, 2010


Starting nonprofits now is like what starting internet companies were like back then. It's as though we're supposed to be so very impressed that they start a nonprofit in college and give themselves a title, and either through trust funds or parental contributions, these so-called wunderkinds float their nonprofits. DC is full of them.

BTW, is it okay to install your relatives on your Board of Directors if you have a 501(c)(3) status? Her mom is on the Board too.

I'd be more impressed if she'd bought and started running a McDonald's at a young age. She's lucky she's so attractive that the media will pick up this story in a heartbeat. She went to Stanford (brains! though it looks like all of her family attended/attends Stanford), she's pretty (so blonde! and Scandanavian!), and she's so altruistic (a person with a big and warm heart in this gritty world taking her brains and beauty to Africa, awww). Like a beautiful superheroine, she's going to stop the cycle of war and poverty in Africa.

And now she's going to let newspapers run sexy pictures of her with tantalizing headlines. All to stop war and poverty in Africa.
posted by anniecat at 4:47 PM on March 4, 2010 [1 favorite]


Has anybody else looked at this nonprofit's 2006 990 on Guidestar and found it really weird? Her salary is $70. Her mother is listed as "Director" and made a $30,000 loan for the nonprofit to meet program expenses in 2006. And her name doesn't have a "j" in it on the IRS forms.

I'm not sure she's going to want the attention she's hankering for for her org.
posted by anniecat at 4:57 PM on March 4, 2010 [1 favorite]


I can't get past the wrists. What is on her wrists
posted by danb at 4:58 PM on March 4, 2010 [1 favorite]


Okay, in the interests of science I took a closer look and I think it says "BE love" on her left wrists and "ONE life" on her right, although "life" could be wrong as that one is hard to make out.

Which is way too Travis Bickle for me, so I'm going to go right back to the "this is how I like to be tied" theory.
posted by Justinian at 5:02 PM on March 4, 2010


What do you see yourself doing in 5, 10, or 20 years?
In 5 years, I see myself being midway into the build-out of a social enterprise company – currently I'm interested in the intersection of entrepreneurship, trauma rehabilitation and recovery, and alternative approaches to health and wellness. In 10 or 20 years, who knows! The only thing I'm really certain about is that I want to always be my own boss.


It's really hard to invest in someone, even if you just want to help a good cause, if they admit to being completely aimless. Kjerstin should probably not go to a venture capitalist and admit that she has no clue what she wants to do with the money they might give her. It takes a lot of money to "comfortably establish" a charity, but I guess that depends on what your definition of comfortable is.
posted by anniecat at 5:25 PM on March 4, 2010


They just don't make Stanford graduates like the used to...
posted by empty vessel at 6:02 PM on March 4, 2010 [1 favorite]


How Richard Posner-esque.
posted by thelastenglishmajor at 6:09 PM on March 4, 2010


I heard of people doing this 10 years ago. Whats the news?
Here is an example of a German student, 4 years ago.
posted by yoyo_nyc at 6:29 PM on March 4, 2010


"The only thing I'm really certain about is that I want to always be my own boss."

I'd submit:
1. If you accept a $600,000 investment, you are not your own boss anymore. The investor is your boss.

2. If you have no interested in ever working for others, you're probably not a very sound investment.
posted by mpbx at 6:42 PM on March 4, 2010


Ugggghhh. Stanfordddddd. Stop ittttt.

It seems like every time I am visiting anyone up there I go out for breakfast and while I'm trying to enjoy my meal I overhear some goddamn young person talking about this kind of idea over eggs like it's the most genius thing anyone has ever thought of. I hate Palo Alto.
posted by little light-giver at 8:53 PM on March 4, 2010 [2 favorites]


Re: FORGE

1) It's sketch that the most recent 990 they have uploaded on guidestar is from 2006. It's especially bothersome that she touts this idea of 'radical transparency,' but can't even manage to get a recent tax filing on the public forum.

2) I could very well be missing something, but according to the 06 990, FORGE doesn't have any employee compensation, but they have a large field staff?

3) The only expenses claimed on the 990 are from her mother Karen, a Board member. While it isn't inherently wrong or unethical to have relatives on the board of your 501c3, it is kind of weird when they appear to be the only one claiming expenses, especially since the biggest chunk of expenses was for travel. Travel, in the annual budget of the org, is nearly as much as the largest expense - supplies. I just think it's weird that the org portends to rebuild communities in Africa, and their second largest expense is travel (and I know the dollar stretches far in Africa).

4) And yeah, looks like her Mom floated the org, at least in 2006, with a 30K, 0.0% interest loan.

5) It's also a little strange that their sole source of revenue is 'direct public support,' totaling close to 300k, and it's unspecified. They only spent 2k on fundraising - I mean, damn, that's quite a return.

6) Also weird about the $70 salary thing.

In any case, I'm not saying that there is anything illegal, or even definitively unethical, going on - but at the very least, they don't seem to be financially viable or have a capacity for growth, they don't represent themselves well, they fiscal policies are probably a little on the slack side, and I would think at least twice before donating any money to FORGE, especially if I wanted my hard-earned charity dollars to be impactful (and by 'would think twice' I really mean would never consider giving them a dime, and would greatly discourage others from doing so as well).
posted by Lutoslawski at 11:31 PM on March 4, 2010 [4 favorites]


I was thinking about this a while ago, as a possible dystopian futuristic scenario. In it, personal securitisation would become routine, with almost all young people selling shares in themselves to pay for their education, and the more successful ones buying themselves back over the first few working decades of their lives. If you lost majority ownership of yourself, you lost the right to make life decisions; your owners, seeking to maximise your profits (as opposed to your psychological wellbeing or self-actualisation) could decide that you were more optimally placed working in some highly profitable shithole somewhere. The only safeguard built into this system was that you always retained a small stake in yourself (about 3%) and thus your owners couldn't liquidate you for organs.

This was in the context of a possible cyberpunkesque scifi story concept; the story started with the heroine, a 49% self-owned technological troubleshooter and graduate of an elite (and expensive) school getting out of bed and checking her stock ownership online, finding that it was safely fragmented (i.e., no one boss to tell her what to do) but that some unknown holding company had appeared as her tenth biggest owner. By the afternoon, she'd receive a call from them, who had bought out the other owners, consolidated 51% of her, terminated her present employment and lease and ordered her to immediately proceed on an exotic and dangerous mission requiring her specialist skills to find/recover some McGuffin. The rest of the story never got written, or even sketched out.
posted by acb at 7:50 AM on March 5, 2010 [3 favorites]


So would I have to buy you to finish the story, or...
posted by ODiV at 7:55 AM on March 5, 2010


It's also a little strange that their sole source of revenue is 'direct public support,' totaling close to 300k, and it's unspecified. They only spent 2k on fundraising - I mean, damn, that's quite a return.

That is a really striking figure to me too, and I can't find any annual reports to look at.

I don't have access to the 990, so I can't see about the employee compensation. However, in the 'Executive Summary' they say that in 2007, their budget was ~$400k, and 95% of that went directly to 'Program Expenses'. They had 162 field staff and only 3 domestic staff - my guess is they wrap all of their field staff salaries into the program budget. Would that explain the lack of documentation on the 990?
posted by Think_Long at 8:30 AM on March 5, 2010


Here's a direct link to the 2006 990. (through guidestar, but you should be able to access it - also, I haven't trudged through the other 990's, because I'm not sure yet how much I care, so I'm judging only on the grounds of this one - most recent - filing).

According to the 06 990, they had about 240k in program service expenses - but in Part II they don't list any money going to staff compensation - either directors/managers or other employees. This does strike me as odd.

It's also odd that they raised almost 300k in 'direct public support' - which gave them about a 40K excess for the year, so why the 30k loan? (I realize this could have been a timing thing...but...it's still strange).
posted by Lutoslawski at 9:33 AM on March 5, 2010


huh, that is weird. Organizational foibles I suppose.
posted by Think_Long at 10:59 AM on March 5, 2010


I had this EXACT idea a few year ago but decided it was too much of a bad sci-fi novel idea. IN THE FUTURE EVEN PEOPLE ARE CORPORATIONS

i didn't watch it, but i think hal hartley's the girl from monday was based on this premise :P

cheers!
posted by kliuless at 8:53 AM on March 7, 2010


« Older Zakumi's game is Fair Play   |   Go on, us! Newer »


This thread has been archived and is closed to new comments



Post