Columbia University Press

Today, we will finish up our week featuring The Robin Hood Rules for Smart Giving, Michael M. Weinstein and Ralph M. Bradburd, with a post explaining what the Robin Hood Foundation is and how it attempts to address the problem of poverty in New York City. (Don’t forget to enter our Goodreads book giveaway for a chance to win a FREE copy!)

The Robin Hood Foundation finds, funds, and partners with programs that have proven they are an effective way to combat poverty in New York City. Robin Hood employs a rigorous system of metrics and third-party evaluation to ensure grantee accountability. The board pays all administrative and fundraising costs, so 100% of donations goes directly to helping New Yorkers in need build better lives. The foundation also works closely with grantees to help make them more effective, ensuring that they will assist even more people.

The Robin Hood Foundation is one of the premier poverty-fighting nonprofit organizations focused on combating poverty in New York. This aim leads the foundation to support more than 200 programs in the city, ranging from education reform to stable housing, from food availability to literacy, and from health insurance and healthcare availability to disaster relief.

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This week our featured book is The Robin Hood Rules for Smart Giving, by Michael M. Weinstein and Ralph M. Bradburd, published by Columbia Business School Publishing, an imprint of Columbia University Press. Enter our Goodreads book giveaway for a chance to win a FREE copy!

Today, we have a couple of videos from the excellent Vimeo channel of the Robin Hood Foundation. In the first video, Michael Weinstein explains the Robin Hood Foundation approach, and in the second, he explains “benefit-cost ratios.”

Our Approach from Robin Hood on Vimeo.

Michael Weinstein Benefit-Cost Video from Robin Hood on Vimeo.

This week our featured book is The Robin Hood Rules for Smart Giving, by Michael M. Weinstein and Ralph M. Bradburd, published by Columbia Business School Publishing, an imprint of Columbia University Press. Enter our Goodreads book giveaway for a chance to win a FREE copy!

Today, we have a guest post from Michael Weinstein, in which he explains how The Robin Hood Foundation decides what to fund when there are so many important programs that need funding.

The Robin Hood Foundation and “Relentless Monetization”
Michael M. Weinstein

We philanthropists face gnarly decisions. To fight poverty, do we train chronically unemployed women to drive commercial trucks or instead pour money into pre-kindergarten programs for poor youngsters? Do we train male ex-offenders to serve as drug-abuse counselors for adolescent boys or fund charter schools? We can’t afford to do everything.

In The Robin Hood Rules for Smart Giving, Ralph Bradburd and I set forth a framework for making the right choices — spending philanthropic dollars with maximum impact.

Our framework, which we dub “relentless monetization,” uses the workhorse of modern economics, benefit-cost analysis, to help funders decide which grants to make. Spending dollars on programs with the highest benefit/cost ratios puts dollars where they do the most good. For example, taking dollars out of one project and spending them on a project whose benefit/cost ratio is twice as high amounts to raising and spending twice as many philanthropic dollars.

The framework does indeed bite hard. Here’s one of many examples.

At the Robin Hood Foundation, we once proudly funded what we saw as the best permanent supportive housing residence in the city. The grantee takes in homeless families, provides them excellent mental-health and other services, and keeps them safely, permanently housed. Using representative numbers, Robin Hood might have spent $300,000 a year to help house 60 families. We say this residence was best because none–not one–of its families returned to the streets. Case closed: great grant.

Or was it? Once our metric algorithms were in place and staff did the arithmetic, the benefit/cost calculation came in low—indeed, very low. Did we immediately pull the plug? No. Perhaps our algorithms were wrong and were missing key benefits. Perhaps our equations were right but our numbers were wrong. We did eventually pull the funding plug, but we did so only after two years of scrutiny. The answer was that permanent supportive housing is a frightfully expensive way to fight poverty. Here, Robin Hood would spend $300,000 a year to save the same 60 families year in and year out. We do that nowhere else. At our schools, the students in the sixth grade change each year. In our carpentry-training program, the trainees change each year. In our micro-lending programs, borrowers change each year.

Our point is not to criticize permanent supportive-housing programs. They pursue an inspiring and important mission. But for Robin Hood in particular, the strategy is not cost-effective. We can spend the $300,000 in other ways that lift significantly more poor New Yorkers out of poverty over any defined period.

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This week our featured book is The Robin Hood Rules for Smart Giving, by Michael M. Weinstein and Ralph M. Bradburd, published by Columbia Business School Publishing, an imprint of Columbia University Press. Enter our Goodreads book giveaway for a chance to win a FREE copy!

Today, we have an excerpt from the first chapter of The Robin Hood Rules for Smart Giving: “An Overview of Relentless Monetization.”

The Robin Hood Rules for Smart Giving

“The Robin Hood Rules for Smart Giving is a must read for all ‘do-gooders,’ including the donors who give money and the nonprofits that spend it. The authors have a marvelous way of conveying complex concepts in simple English, including one of the best explanations of benefit-cost analysis that I have ever read. This book is a true gem.” — Sheldon Danziger, University of Michigan

This week our featured book is The Robin Hood Rules for Smart Giving, by Michael M. Weinstein and Ralph M. Bradburd, published by Columbia Business School Publishing, an imprint of Columbia University Press.

Throughout the week, we will be featuring the book and its authors on our blog as well as on our Twitter feed, and on our Facebook page.

We are also offering TWENTY FREE copies of The Robin Hood Rules for Smart Giving through a book giveaway at Goodreads. To enter our book giveaway, simply click here and follow the instructions for entering. The giveaway runs through May 27th, so enter today for your chance to win!

Goodreads Book Giveaway

The Robin Hood Rules for Smart Giving

by Michael M. Weinstein

Giveaway ends May 27, 2013.

See the giveaway details
at Goodreads.

Enter to win

“This is a great book for both non-profit funders and non-profit leaders. The book’s “relentless monetization” concept — if widely deployed — would dramatically boost the impact of the independent sector. Now let’s get right to work and act on this great advice.” — Mark Tercek, President and CEO of the Nature Conservancy

It’s been a good week for Kara Newman (@karanewman), author of The Secret Financial Life of Food: From Commodities Markets to Supermarkets.

A recent review in the Washington Post praised the book for providing “a refreshing and much-needed look” at food as a commodity amid the plethora of other food books.

The review points to Kara Newman’s “engaging observations” about the development of such phenomena as year-round dairy products and the transformation of pepper from a financial instrument of critical value to lowly food stuff. Additionally, Newman’s tracing of the history of commodity tracing is documented “clearly and elegantly.”

In addition to the great review, Newman was also interviewed about the book by Eric LeMay on the New Books Network.

The following post is by Kara Newman, author of The Secret Financial Life of Food: From Commodities Markets to Supermarkets. The post was originally published on the blog A Life of Spice:

Few people can claim to have had a food epiphany while reading Barron’s, but that’s what happened to me. In a roundtable discussion of market experts, after many dry pages about where the S&P 500 Index and gold bullion might end the year, commodities trader Jim Rogers offered this wisdom: “Buy breakfast.”

He was referring to futures contracts sold on frozen orange juice and pork bellies, which he expected to appreciate in value during the coming year). But to me, it was more than an abstract investment idea, and I thought of the cartons of Tropicana and BLTs I’d consumed over the years.

Although I had a vague notion of the agriculture and manufacturing associated with bringing food to the table, never before had I contemplated the secret financial life of my meals.

At the time, I was working as a financial editor for a consulting firm, overseeing a team that churned out daily stock and bond market reports for corporate clients. I was given a new and serendipitous task: write a daily commodities report.

Suddenly, I was hungry on the commodities beat, and I wanted to learn more. I enrolled in a course on derivatives offered by the Futures Industry Institute and taught by a commodities trader. The class was geared toward prepping eager young traders for a certification exam. I opened my coursebook, and flipped past the spiderweb diagrams of hedging strategies to the list of products traded as commodities.

It read like a menu: The Livestock category, I read, included cattle and hogs (live and the fabled “pork bellies,” fresh or frozen, a commodity now ubiquitous on trendy restaurant menus but which no longer trade). Meanwhile, the Grains sector spanned the range of wheat, soybeans, oats, and corn. And the Softs group referred to cocoa, coffee, sugar, orange juice and, puzzlingly, also cotton and lumber. (I’m deliberately omitting the distinctly non-edible energy and metals sectors, though they are important commodities too.)

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One of the most important voices on Wall Street is Howard Marks of Oaktree Capital Management and author of The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor. As reported by Robert Lenzer at Forbes, Howard Mark’s most recent letter cautions against some of the risks recently being taken in the market of late, behavior that resembles events leading up to the financial meltdown

In Marks’ letter he cites “errors of the herd,” “the brevity of financial memory,” and “the role of cycles and pendulums.”

Lenzer writes:

As Marks so grittily puts it; “The scramble for return has brought elements of pre-crisis behavior very much back to life. Mull that description of the fixed income markets in early 2013 over– and decide what the fallout might be on equities. Just as took place most shockingly in 2008 and early 2009.”

The Economist blog Feast and Famine: Demography and Development recently interviewed Siddharth Kara about his new book Bonded Labor: Tackling the System of Slavery in South Asia .

In the interview Kara explains how people become trapped and exploited in the system of bonded labor in a desperate attempt to get credit:

Bonded labour, or what’s often called debt-bondage, is a form of feudal servitude, where credit is exchanged for pledged labour. The class in power will often coercively extract and extort far more labour out of the debtor than the fair value of the credit they received. Sometimes an entire family can endlessly work off a meagre loan taken years before. More than half of the world’s slaves are bonded labourers and the products made by them permeate the global economy.

Bonded labor is a particular problem in South Asia where there are high rates of poverty and a caste system which allows the unfair system to persist. In addition to the caste system and poverty, bonded labor also continues to exist and grow because of corruption, social apathy, and the fact that it has become part of the global economy. In the following excerpt from the interview, Kara explains how bonded labor has become part of the global economy, though it is often hidden within its complex processes:

Q: Are there any sectors that seem particularly prone to use the products of bonded labour?

A: Well, yeah. Often times the supply chains for these products can be very complex, so sometimes a company that’s importing goods may not realise exactly what’s going on on the far side of their supply chain. The industries that have the highest prevalence included products like rice, tea, coffee, but also things like frozen shrimp and fish, granite for your counter tops, cubic zirconia, hand woven carpets, sporting goods, apparel, the list goes on and on. Construction is another one, including office buildings for international companies, or major road construction and infrastructure projects.

Q: To what extent does bonded labour a problem of globalisation?

A: The global economy is a powerful force [that creates] demand. A company can scour the globe for under-regulated labour markets in order to benefit from cheap wages. Labour is almost always the highest cost component in a business, so if you can minimise or virtually eliminate labour costs you are saving a lot of money. The global economy does look for and demand and feed on these systems, which stimulates their persistence.

We conclude our week-long feature on The Secret Financial Life of Food: From Commodities Markets to Supermarkets, by Kara Newman, with a quiz that tests your knowledge of the finances food (Click here for the answers):

1. Where is the first written reference to the treatment of food as a financial commodity to be traded for future delivery?
a. New York Times
b. The Bible
c. Phoenician clay tablets
d. French newspaper Le Monde

2. Which spice accounts for nearly 35 percent of the world’s spice trade and is the only spice to have been traded on the futures market in the United States?
a. Pepper
b. Salt
c. Paprika
d. Cinnamon

3. Traders in corn futures use a loose formula to determine how much corn they will need in the coming season. According to the rule, feeding it five pounds of corn results in a pig gaining ______ pound(s).
a. Ten
b. Seven
c. Five
d. One

4. Atop the historic Chicago Board of Trade building sits a statue of Ceres, the goddess of what foodstuff that the board was created to trade?
a. Salt
b. Cattle
c. Grain
d. Olives

5. What city never had a grain exchange?
a. Portland, Ore.
b. San Francisco, Calif.
c. Omaha, Neb.
d. Tallahassee, Fla.

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Earlier this Fall, Kara Newman talked with Zester Daily about her new book The Secret Financial Life of Food: From Commodities Markets to Supermarkets.

In the interview Newman explains commodities markets and futures trading and how it affects the price of food on your plate. She also considers the recent scare over bacon shortage due to the end of trading in pork belly futures. Looking at other recent developments, she examines the ways in which farmer’s markets and the trend to eating locally allows people to “opt out” of the pricing set by commodities markets.

Newman is also a well-known writer on alcohol and spirits and she is also asked about the growing whiskey futures market and the role of Chinese consumers in affecting the French wine industry:

Although coffee beans have a long history of formal trade in the U.S., potables such as wine and whiskey are still in their trading infancy. Bordeaux futures are nothing new, but wine funds certainly are, and we’re starting to hear rumblings about the nascent “whiskey-investment” industry, although it doesn’t seem to have developed much traction yet.

Growing interest in both products from newly affluent drinkers in China and elsewhere surely have created a market that’s ripe for trading. Particularly where wine is concerned, it has all the elements of uncertain supply and fluctuating demand. That includes the investment manager’s observation that many Chinese drinkers are purchasing wine to consume now, rather than to age — a trend that has the potential to impact supply down the road for older vintages, which could lead to higher prices — if what’s in the bottle is good, of course! Regardless of what’s being traded or how, though, it still comes down to basic supply and demand.

It is hard not to consider the topic food commodities without thinking of Trading Places (see clip below), which Kara Newman references in her new book The Secret Financial Life of Food: From Commodities Markets to Supermarkets.

In The Secret Financial Life of Food, Newman centers her history on corn and its transformation into a ubiquitous commodity, and she uses oats, wheat, and rye to recast America’s westward expansion and the Industrial Revolution. She discusses the effects of such mega-corporations as Starbucks and McDonalds on futures markets, and she considers burgeoning markets, particularly “super soybeans,” which could scramble the landscape of food finance. She argues that the ingredients of American power and culture, and the making of the modern world, can be found in the history of food commodities exchange.

Meanwhile, in the following clip, Randolph and Mortimer Duke (played by Don Ameche and Ralph Bellamy) explain to Billy Ray Valentine (played by Eddie Murphy) how their commodity brokerage works. While the nuances and history are better described in Newman’s work, starting with this clip provides the perfect entree to The Secret Financial Life of Food (and how often can we relate one of our books to an Eddie Murphy movie?)

The following post is by Kara Newman, author of The Secret Financial Life of Food: From Commodities Markets to Supermarkets

My new book, The Secret Financial Life of Food, focuses on the history of agricultural commodities, including the personalities and stories behind the contracts and how that has impacted what trades today.

However, the questions I’ve been asked most often center around the future of these commodities. What might be next? Keeping in mind that I’m neither an economist nor a fortune teller – just a food writer with an affection for culinary history – I’ll do my best to peer into my crystal ball to find some answers. What I do know is this: just as food traditions will continue to evolve, so will the commodities markets.

Prediction #1: If U.S. exchanges introduce new food-based contracts, they will reflect a global perspective – not American-only eating habits. Several chapters in my book focus on how certain contracts flamed out in spectacular fashion due to scandal (onion futures) or petered out when they no longer were needed (pork bellies). But won’t we ever see any new contracts start up?

I predict yes – but they’ll center around foods consumed by global populations. Just like the market for soybeans has flourished as global populations consume soybeans in any number of forms, next up might be the fledgling apple juice concentrate market – a product increasingly made and consumed outside of the U.S. Some of my other picks for potential food-based futures contracts that might one day soon trade on American exchanges: canola and/or olive oil, both of which already trade on other bourses; sheep and/or lambs (a pilot pricing program already is underway), and although this is a long shot, grapes or grape juice concentrate, representing the third most-produced fruit worldwide.

It’s not such a far leap to wonder if a fully global marketplace, trading fully global food-based futures contracts, might be an option in the not-so-distant future.

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This week CNN’s Freedom Project: Ending Modern-Day Slavery has been featuring posts and videos by Siddharth Kara, author of Bonded Labor: Tackling the System of Slavery in South Asia.

On Monday, he looked at bonded labor in Nepal and the ways in which the system has an impact around the world:

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In addition to exploring the system of bonded labor and the lives of those who suffer under it, Siddharth Kara offers ways in which it can be ended. (For a description of the system of bonded, read an excerpt from the introduction.) In Bonded Labor: Tackling the System of Slavery in South Asia, Kara offers ten initiatives to address the forces that promote bonded labor.

These include: legal reform (increase in minimum wages, redesign of land rights, etc.); transnational slavery intervention forces that frees bonded laborers and detains offenders; fast-track courts; elevated scaling and effectiveness of select government antipoverty programs; expanded and free rural education; rural integration and dissemination efforts, including distribution of mobile devices; rapid-response environmental disaster teams focused on alleviating immediate economic and healthcare needs in disaster areas; educational campaigns focused on alleviating social and systemic biases against subordinated castes and ethnic groups.

Kara also describes ways in which individuals can join the fight against bonded labor:

1. Learn about the issue: Read this book and share it with others who are interested in learning more about bonded labor or child labor in South Asia.

2. Financial support: Each of the NGOs discussed in this book is working mightily to tackle various aspects of bonded labor in South Asia. More important, they are reputable and responsible. Any financial or volunteer support you can offer is of tremendous benefit to their efforts.

3. Contact lawmakers: For those of you not living in South Asia, do not forget that you purchase products every day that are potentially touched by bonded and child labor in South Asia. Demand that your lawmakers do more to ensure that corporations do their part to certify that their supply chains are not tainted by these exploitations. For those of you living in South Asia, do all of this and add to it direct campaigns to your lawmakers to ensure that they combat bonded labor more effectively, employing the kind of initiatives described in this book.

4. Contact corporations: any company that sources raw materials or low-end labor in South Asia must be pressured to investigate and certify that their supply chains are free of slave labor of any kind; consumers must also demand that companies whose products they purchase ensure that this kind of investigation and certification becomes a regular aspect of their operating model.

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Critics have praised Siddharth Kara, author of Sex Trafficking: Inside the Business of Modern Slavery and Bonded Labor: Tackling the System of Slavery in South Asia, for his integration of investigative narrative journalism and clear-sighted economic analysis. In this post, we highlight some of his estimates of the extent of bonded labor in South Asia, based on his research and careful analysis as well as some statistics he cites. Kara argues that knowing and understanding the numbers and economics of slavery is crucial in devising measures to end it:

* Total number of slaves in the world: 28.4-32.6 million
* Bonded laborers in South Asia (2011): 15-18 million
* Annual Revenues from Global Slave Labor: $164.7 Billion
* % of the Pakistan population who are bonded laborers: 1.3%
* Weighted avg. annual revenues per slave (sex work): $48,010
* Annual Return on Investment for forced labor: 398%
* People living on less than $1.25 per day in India: 437 million
* Total number of bonded laborers in India: 10.7-12.7 million

For his most recent book, Bonded Labor: Tackling the System of Slavery in South Asia, Siddharth Kara is based on his extensive travels to the region. In a running series on CNN’s Freedom Project: Ending Modern-Day Slavery, Kara discussed what he discovered.

In the following video, he discusses the sex trade in Nepal. (For more posts from Siddharth Kara):

“Siddharth Kara’s exploration of bonded labor in South Asia is perhaps the most ambitious and reasoned treatment of this form of slavery in the modern era…. This is a must read for all that want to better understand the trajectory of the global economy and its influence and impact on labor.” — Randy Newcomb, President/CEO, Humanity United

This week our featured book is Bonded Labor: Tackling the System of Slavery in South Asia by Siddharth Kara

Throughout the week we will highlight aspects of Bonded Labor: Tackling the System of Slavery in South Asia and we are offering a FREE copy of the book to one winner.

To enter our book giveaway, simply e-mail pl2164@columbia.edu with your name and address. We will randomly select one winner on Friday at 1:00 pm. Good luck and spread the word!

For more on the book: read an excerpt from the introduction, Read and watch Siddharth Kara’s reports for CNN’s Freedom Project, follow Siddharth Kara on Twitter

“We have a nasty habit of destroying whatever doesn’t have a dollar sign in front of it. We need to recognize the value of natural assets beyond those that are easily monetized.” — Geoffrey Heal

The Rio+20 United Nations Conference on Sustainable Development took place last week in Brazil, offering a multinational forum for discussion on two themes: “(a) a green economy in the context of sustainable development poverty eradication; and (b) the institutional framework for sustainable development.” Geoffrey Heal, Donald C. Waite III Professor of Social Enterprise at Columbia Business School and author of When Principles Pay, Environmental Markets, and the forthcoming Whole Earth Economics among other works, gave the conference’s keynote address, which is now available via the Columbia Business School Ideas at Work page.

In his address, Heal claims that the multitude of man-made threats to our environment are “irrevocably changing the world around us for the worse, and in ways that will impose huge economic costs.” However, he offers hope for those who despair of our ability to solve these problems:

We have a tendency to throw up our hands in despair at these problems — they seem so all-encompassing and threatening, and so difficult to address. In fact this is wrong. All these problems are manifestations of a few easily remedied shortcomings in our economic system.

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We conclude our week-long focus on The Economists’ Voice 2.0: The Financial Crisis, Health Care Reform, and More, edited by Joseph Stiglitz and Aaron Edlin with an essay Paul N. Courant, an economist and dean of libraries at the University of Michigan.

In his essay, “The Stakes in the Google Books Settlement,” Paul Courant examines the implications of the recent settlement to allow Google to digitize books. Here is an excerpt from that article:

“In contrast, scuttling of the settlement or greatly limiting the volume of works to be covered would put us back to where we started—the only people with good access to the scholarly and cultural record of the twentieth century would be those with physical access to re­search libraries, and even for them, that literature would be more difficult to access than most works published before or since.”—Paul Courant

Basically the proposed settlement would create a market in elec­tronically available copies of out-of- print works that are plausibly in copyright. Google would provide free browsing access (usually 20 percent of a book would be viewable in a given search) and would sell permanent online access to complete versions on behalf of itself and a newly created Book Rights Registry (BRR) that would represent the interests of rights holders of works subject to the settlement. Google would also sell site licenses to institutions such as colleges and uni­versities, enabling students and employees of those institutions to have access to the collections in much the same way that they now have access to electronic journals and databases purchased by their li­braries. Google would obtain 37 percent of the revenue from both the retail product and the site license, with the rest to be distributed to rights holders.

The obvious benefit of the settlement is that it provides electronic access to many millions of works at one fell swoop, saving the trans­actions costs that would be involved if Google, libraries, and others seeking to provide access to the scanned works had to negotiate work by work and rights holder by rights holder, assuming that rights hold­ers could be found. The ability to search simultaneously the collec­tions of the world’s great research libraries, to browse those collections, and to be able to purchase immediate electronic access provides un­calculated, but almost certainly large, consumer surplus.

The settlement would also permit academic libraries and their universities, at least after a time, to save a great deal of money and space, as the necessity of holding extensively duplicated print collec­tions would be eliminated. Moreover, the settlement includes the orphan (foundling) works, removing the risks that would otherwise attend to displaying works where rights are unknown and adding to the value that would be available to students, professors, and other users of Google’s newly created giant electronic bookstore. Inclusion of the orphan works is essential to creating an effective product for the academic market, because without them neither Google nor any­one else could risk putting collections online without costly establish­ment of rights (or the lack thereof) book by book, and the resulting collection of out-of-print works would be seriously incomplete. One can never conclusively prove a book to be orphaned. There is always the possibility that a rights holder will materialize, with a lawyer not far behind.

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