Nowadays, there are a large number of nonprofits around the world. No matter these nonprofits are large or small, they all share the same characteristics that are to provide services to people and to help people live better lives. However, during nonprofits’ growth and development, they may face many problems in funds, human resources, managements, policies, etc. To many nonprofits, they are facing two choices. One is to attempt to develop on their own, and the other is to merge with other nonprofits. However, whether or not more nonprofits should merge always remains a controversial question.

Merging is actually an effective and efficient way for nonprofits to better serve the community and realize their missions. Even though people may be concerned that the merger will bring conflicts between the two organizations, a merger can potentially bring more benefits than negative effects as long as the two nonprofits share similar missions and visions. According to Dr. B.J. Bischoff, if two organizations share a close mission, then they have the potential to merge. There have been approximately 1 million nonprofits in the United States so far. Many of those small nonprofits actually provide similar or almost the same services. The record from National Council of Nonprofits indicates that the majority of the nonprofits sector is small- and mid-size organizations; “82.3% of the filing nonprofits have expenditures of less than $1 million.” Therefore, due to these nonprofits’ small sizes, it’s difficult for them to carry out their goals and make a difference. Some of them may even struggle to survive during economic downtowns. As a result, it will be a wise decision for nonprofits with similar missions to merge. In this way, such combined forces after merging will allow nonprofit organizations to enable stronger entities. Thus the merged nonprofit will be able to better serve the people in need. For instance, Shelter Network and InnVision the Way Home are both nonprofits in California providing services and help to homeless people. They merged as one organization, InnVision Shelter Network in July 2012. Because of the merging, InnVision Shelter Network has become one of the largest nonprofits for homeless people in Northern California, and has the ability to help more than 20,000 homeless people every year.

In addition, when a merger takes place, the resources and expertise of the two organizations are shared. During economic downturns, combined funds and resources can help the merged nonprofit find solutions to financial problems. Although people who don’t support nonprofits’ merging may think that it is easier for smaller organizations to reduce cost, actually the resources and funds a small nonprofit has are quite limited in the first place. Without sufficient funds and resources, a nonprofit is unable to provide clients with good services and even finds it hard to survive or grow due to financial difficulty. Besides the financial advantages that come from the merging, the combined human talents and skills among the merged organization will be another beneficial power to help development. With shared operating concepts, administrative strategies as well as expertise, the merged nonprofit can compare and thus figure out a new operation model which will enable them to provide the best services to clients. For example, Minnesota Coalition for the Homeless and the Affirmative Options Coalition merged during the last economic crisis. Due to the terrible economic situation and a rapidly increasing number of poor, the constantly decreased funds could not support the two nonprofit organizations to help the poor. For this reason, they chose to merge. With combined funds and employees, they were able to provide more and better services to support the poor.

Furthermore, merging can also serve as a tool for nonprofits to ease competition. Although some people may consider that competition only exists among for-profits and is not necessary for nonprofits, nonprofits actually face much pressure from competition in terms of acquiring funds and resources, performance, etc. Merging can help nonprofits become more competitive in its field, and thus ease their pressure from competition. Two nonprofits may choose to merge if they “identify critical strengths in differing areas.” As a result of the merger, they can expand their services and improve their skill sets, instead of being limited in only one area. Thus, they will be able to grow more strategically and competitively.

More importantly, as long as a nonprofit starts the process to explore whether it is suitable for merging, it’s quite beneficial for this nonprofit to get a better understanding of itself and thus to enable improvement, even without the decision to actually merge. However, nonprofits which seek to merge should carefully study their own situations, and thus figure out a way to realize best outcomes from the merger.

 

Inside Job is such an inspiring film with so many issues worth thinking hard and doing further research on. Here I just want to share with you some of my takeaways from the film, mainly focusing on the issue of conflict of interest.

First let’s look at some disturbing facts. First, during the late 1990s, many IB promoted risky stocks of Internet companies that appeared to be very uncertain in terms of financial strength, which resulted in law suits and $1.4 billion settlement. Another fact is that famous credit rating agencies such as Moody’s, S&P, and Fitch provided high-risk CDOs with triple-A credit ratings which attracted numerous investors that ended up losing their shirts. Fact number three: very few academic economists foresaw the financial crisis, and even afterward, some continued to argue against reforms. Fact number four: The SEC claimed that Goldman Sachs had misstated and ignored very important facts when selling CDOs to various investors; the case was settled for $550 million but Goldman Sachs did not admit to any wrongdoing.

The way I see it is that all those facts are caused by the issue—conflict of interest, which, by definition, means that a person has a private or personal interest which is sufficient to influence the objective exercise of his or her official duties as a professional. The film mentioned four types of people that have such issue – analysts of investment banks, credit rating agencies, academic professionals, and of course, executives in Wall Street.

Analysts in investment banks are greatly motivated to report virtual-high ratings for stocks to attract clients because their firms paid them based on the level of business that they brought to the firms but not on how accurately they rate. This wicked compensation system drives the analysts to focus on creating profitable deals instead of creating safe deals. Moreover, they would rather sacrifice safety in order to bring profitable deals. This phenomenon is hard to change as long as the organizational structure doesn’t change.

The rating agencies are expected to provide unbiased professional opinions about investment. Their words are very important references for investors, so being trustworthy should be their top ethical standard. However, according to some journal articles I read, the rating agencies emphasize heavily on immunity to accountability in their operational ideas. As the excerpts from congressional hearing in the film shows, agencies defend their ratings as simply opinions that should not be relied on. In that case, it is obvious that rating agencies may also prioritize profitability over accuracy. It would appear that they are only interested in trading opinions for money.

Academic conflict of interest comes in a similar way. Many leading economists were paid consulting fees by financial service firms to shape public debate and policy. It is unnecessary for them to be accurate, because “accuracy is not something to expect in this fluctuating market anyway”, so why not just take the money from financial service firms and say what they want to hear? An example from the film would be the report written by Mishkin titled Financial Stability in Iceland, which described the exact opposite side of the truth.

Last but not least, conflict of interest of the executives in Wall Street is a big one. They somehow manipulate the market to their interest so that they could continuously feed their fat wallets, and they could walk away with huge size of bonus when things didn’t go well. Here I will just simply mention their conflict of interest in terms of fiduciary duty. To fulfill such duty, one must put client’s interests first, act in good faith, disclose everything of all materials, remain neutral, and confess if there is a conflict of interest. However, this is only an ethical code but not a requirement, and what’s worse is that, it’s an ethical code that kills income.

In short, humans are greedy. This is an unfortunate but very well-accepted fact. The conservation of resources on the earth decides that when some people get richer, others get worse. With that in mind, my conclusion would be that as long as the conflict of interest exists, which is always true, and as long as it is not regulated by force, which means law that violating will cause huge penalty, investors should always keep in mind that the financial market is full of lies and dark transactions.

 

Three months into 2104, Chinese investors announced they’ve snapped high-tech deals worth more than $6 billion in the U.S. The figure, which is greater than the combined total in the past four years, marks a giant leap in high-tech investments made by private companies from China. But instead of welcoming new jobs and R&D grants, business communities across America are advised to be wary of the innocence of Chinese companies.

A recent report published by The Rhodium Group and Asia Society concludes Chinese buyers may have set out to target high-tech industries in the U.S. While the number of deals has dropped since 2011, the value of China-U.S. high-tech transactions took a jump in the first quarter this year. Overall, Chinese direct investment in the U.S. reached a record high of $14.1 billion last year since taking of in 2008, according to the report.

The boom can be seen across America and in a variety of sectors. A majority of Chinese investors, as graphic below shows, unsurprisingly struck deals with technological communities in California. There was a lot of Chinese money going into IT equipment when Chinese PC maker Lenovo bought IBM’s personal computer business in 2005. But the appetite for software and IT services has prominently grown in the past few years.

Setting numbers aside, a primary issue the report addresses is how to react to the rise of Chinese takeover of “valuable” technological brands made in the U.S. At a conference held in L.A. on Thursday, most bankers and lawyers who helped handle high-tech transactions for their Chinese clients in the past voiced their major concerns: American companies should look out for possible technology theft, and the U.S. government should make efforts to beef up cyber security.

The big-ticket sales capture a shift in China’s economic ambition and could be a prelude to the country’s departure from being a global manufacturer. But being on a learning curve doesn’t mean the nation’s transition must be an evil breed. In nature, purchasing IBM’s personal computer business was no different from Facebook’s buying WhatsApp: both indicate the parent company sees some value in the subsidiary, and pays money to learn from it. It is fair bargain as long as both sides shake hands on the price.

The $6-million deals made in the first quarter include three major components: Lenovo, after it purchased IBM’s PC business years ago, is spending another $2.3 billion buying a server unit of IBM. Earlier, it purchased Motorola Mobility from Google for $2.91 billion. China’s Wanxiang Group took in luxury carmaker Fisker in February.

They all have eye-popping price tags, but the health of the three subsidiaries show Chinese buyers are tasked with turning failing American brands around before they move on to harness, if any, new technologies. Fisker had been in huge financial loss and filed for bankruptcy when Asian buyers emerged at the end of last year. Google paid $12.5 billion for the acquisition of Motorola Mobility to obtain the patents it needed to ward off lawsuits from Apple (and they weren’t accused of technology theft), and dumped the “perpetual money-loser” a year later. IBM’s PC unit was, again, losing money when Lenovo bought it in 2005, yet the latter has come back for more. The low-end server business Lenovo is taking from IBM has posted seven quarters of losses.

To the other end, The Committee on Foreign Investment in the United States (CFIUS) has guarded national security well. It guarded it so well that Chinese telecommunication giants had to shift their U.S. business from installing network equipment to selling smartphones to survive in the U.S. market.

In 2011, Huawei Technologies Co., China’s biggest network equipment maker, was barred from participating in building a nationwide emergency network. A year later, the U.S. House Intelligence Committee chairman discouraged U.S. companies from doing business with Huawei and ZTE Corp, for fear of intellectual-property theft and spying. The Committee also noted in a report that CFIUS “must block acquisitions, takeovers, or mergers involving Huawei and ZTE given the threat to U.S. national security interests.”

From selling handsets, ZTE had a market share of 6 percent in the U.S. last year. The CEO of ZTE’s U.S. division touted the company’s decision to drop network business in the U.S. “a strategic move” and “an adaptation to America’s legal framework.”

The second-largest telecommunication manufacturer in China has opened 14 offices and five R&D centers in the U.S. It hires about 380 local employees. It has invested $350 million in its U.S. business. It remains at the mercy of geopolitics.

TOMS Shoes first surfaced 7 years ago with a new responsible and sustainable business model: Buy One Give One (BOGO) – when you buy a pair of shoes TOMS gives a pair to a poor child in an underdeveloped country.

Blake Mycoskie, founder and CEO of the company, first came up with the idea in Argentina when he realized barefoot children, who accounted for over fifty percent of the children, weren’t allowed to go to school. Mycoskie contacte a local shoemaker in Argentina and ordered a few hundred pairs to sell, with BOGO model in mind, in his hometown Los Angeles. Soon, the shoes became a phenomenon, a movement some call it. It’s one of those companies that has a positive image in almost all consumers minds, and the first that comes to mind when thinking about socially conscious purchases.

In 2011, after selling millions of pairs of shoes, the company branched out to eyewear, promising to give out one glass in the developing world for every purchase. Last month, the company announced they’re expanding into the coffee market – Mycoskie stated that for each coffee bag purchased ($12 per bag), they will give a week of clean water to someone in need. Their new product will be available for purchase on their website, café, and Wholefoods stores nationwide.

Although the coffee market is a very crowded one today, Mycoskie says that they picked up on the current trend in America of artisanal coffee roasters, and argues that they will have a better hand since people feel better about themselves with purchasing from a business with BOGO model. He believes that “the same conscious consumers that love his slip-ons will dig his beans.”

However, TOMS Shoes has been the target of a backlash from consumers and philanthropists who criticize the company’s business model for not being helpful in the long run. Now with their new venture, they are sure to receive more criticism from the same people claiming that the giving people a fish and teaching them to fish are two different things and the latter is more effective in the longer run.

In 2013 two former interns, Lauren Ballinger at W magazine, and Matthew Leib at The New Yorker, sued Conde Nast for violating federal and state labor laws. Conde Nast, one of the most prestigious publishing houses in the country, owns more than 25 publications, including Vogue, Vanity Fair, The New Yorker, and GQ.

With the economy still in a slow pace, it is no surprise that internships nowadays don’t pay much, or any money. Most internship advertisements clearly state that they won’t be paying and that the internship is only available for school credit. The two Conde Nast interns were paid “$12 a day for shifts that last 12 hours or more,” which accounts to less than $1 an hour – way below the minimum wage. While industry officials claim that a Conde Nast internship is one of the most prestigious one in publishing that opens many doors, the publishing house has decided to end its internship program after the lawsuit was filed.

The problem with most internships today is that they require long hours, hard work, and little money, claiming that the internship is an invaluable experience. This, in return, creates a privileged candidate pool for these internship programs since not many students can afford living in a big city without any earnings. These internships are only available to those whose parents are able to support their stay, like the daughter of Arianna Huffington, or TV stars Lauren Conrad and Whitney Port. As a “former intern told The New York Times that if she didn’t have her parent’s financial support, she “absolutely” could not have accepted the internship.”

The purpose of the lawsuits filed against Conde Nast is to make minimum wage internships a law. However, with the economy still running slow, and publishing suffering, this seems like a stretch. Yes, the ending of the internship program might open up more entry-level positions – but there’s also the possibility that it might not. Frances Bridges of Forbes came up with a better idea. She stated that with long hours at Conde Nast interns weren’t able to get a second job and “that was the flow with the program.” She claims that if  “Conde Nast had decreased the intern’s hours, but paid the same, small stipend, it would have increased the amount the interns earned an hour, and would have opened up their evenings, allowing them to hold a second job.”

The publishing house decided to settle the lawsuit last week, but they didn’t say what their next move would be about the internship program. Applicants say that there weren’t any more openings in entry-level positions either compared to the previous years. I think this is correlated with the slow economy and the crisis publishing houses are dealing with in the past few years. Clearly, they don’t have enough money to hire more, and that’s why they were abusing the interns – but now that that door is closed, they need to come up with a plan B in order to both attract new talent and get the job done.

“We’ll eradicate Twitter. I don’t care what the international community says. Everyone will witness the power of the Turkish Republic.” These were the words of Turkish PM Erdogan right before banning Twitter a in late March. A few days later, in an attempt to stop leaks of recordings that linked him in a huge money laundering scandal, he also blocked YouTube. His intentions were simple, there was an election coming up (last Sunday), and he wanted to block media channels to prevent more recordings being leaked, and to ensure his party will succeed once again in the elections.

Although both bans were eventually lifted by the ruling of Turkey’s Constitutional Court, the illegally blocked freedom brought question marks to minds. Could Erdogan ban Facebook, Google, and eventually the Internet all together if he thought they were a threat to his power? What would then happen to the economic market in which many foreign investors depend upon?

Until Gezi Park protests this past summer, Turkey had a growing economy and was considered one of the most stable growing markets. However, it all started to fall apart on June, and nowadays Turkey’s currency has lost a third of its value.

In the recent years, Turkey had seen a great development in entrepreneurial ecosystem, but this too has changed with the unstable market. Investors are slowly withdrawing their money, as they feel more and more anxious about the unstable Turkish government. Also, since most entrepreneurial efforts rely on Internet and freedom of expression, with social media bans and Internet blocking, investors feel like Turkey is not the promising future economy anymore. “Sevin Ekinci, a Turkish economist who regularly consults foreigners looking to invest in Turkey, said that if she was a foreign investor, she wouldn’t put her money into a company here.”

Although Erdogan’s government was very pro technology throughout his rule, with President Abdullah Gul courting Twitter and Microsoft on a visit to Silicon Valley in 2012, his current strategy of blocking technology to protect himself and to silence those who are against his power is scaring off investors, and thus threatening the Turkish economy.

 

Could jersey prices really be the issue? Or is there more at play?

 Controversy arose earlier this week on Monday when England revealed their jerseys for the upcoming World Cup. The jerseys, it turned out, cost a surprising 90 pounds (150 US Dollars) and caused a frenzy from not just the English media, but for the British Prime Minister David Cameron as well.

Many have called the jerseys (which Nike manufactured) a rip off. Citizens of England are calling for boycotts and sports minister Helen Grant has asked Nike to lower the prices of the jerseys.

Cameron himself pointed out the stigma that it will have on the parents. “Parents are under enormous pressure to buy the latest kit and we shouldn’t be taken advantage of,” he said in a Reuters article.

But amidst all the controversy and the media speculation, a few things stick out more than others.

For one, Nike is not doing anything new when it comes to the skyrocketing prices of jerseys. Soccer has grown popular with each passing year and more importantly, it is slowly becoming popular in the United States. The big demand of jerseys from fans all over the world calls for higher prices for the merchandise and with more call for the merchandise comes more demand for better quality.

 Both elements go hand in hand. It is the same dilemma that other companies such as Adidas are also facing and competition just amps up the prices even more. That is how supply and demand works for items within the marketplace.

But it is not the prices of the jerseys that is the important subject.

Another important aspect of this controversy is Nike and England’s Football Association’s reasoning for the high prices. According to a comment made by both the FA and Nike, the jerseys have climacool ventilation holes designed in them to better accommodate the weather the players will face during their time in Brazil.

Once again, this becomes a discussion about FIFA’s choices when it comes to host nations. Joseph Blatter and company always make it a point to say that the choices made when it comes to host nations focuses on countries that deserve to have soccer impact their citizens.

“This is the development of football and don’t speak about money. This has nothing to do with money, as it had nothing to do with money here in Africa. It has to do with the development of the game,” he said back in 2010 during the host bids for the 2018 and 2022 World Cups in Qatar and Russia.

He went on to defend this by mentioning the great impact the World Cup had on South Africa earlier in 2010. About $100 million legacy fund went to South Africa and $20 million of that had already been used to build a new South African Football Association headquarters and stated the rest would go to “social and community projects.”

He failed to mention the $3.5 billion FIFA made that year as well.

Brazil’s weather condition is not the only thing players will have to look forward to when they arrive to host nation later this year.

Political and social conflicts are still taking place–much of it involving the unequal disparity of money within the society.

FIFA’s next two host nations, Russia and Qatar, are also facing their own crises at the moment. Russia with its very public situation about the Ukraine and Qatar with both its strict drinking and anti-homosexual laws has many people questioning the role of money when it comes to “the beautiful game.”

Even more worrisome is the fact that two migrant workers died in Qatar on the building sites of the 2022 stadiums there (the same situation that is going on in Brazil). The “little man” in society continues talked about but not focused on in these conversations.

Which brings us back to England’s World Cup jerseys. If so much speculation is about Nike’s jerseys because of the climacool adjustments made to it for Brazil, what about the World Cup being moved to the Winter because Qatar’s summers are known to rise as high as 104 degrees Fahrenheit?

How expensive will those jerseys be? Does that really matter? Or is “the beautiful game” just getting very ugly?

On Wednesday, March 27^th, the Chicago district of the National Labor Relations Board (NLRB) ruled that Northwestern players, led by former Northwestern Quarterback Kain Colter, qualify as employees of the university and can unionize. The decision, at first glance, might seem like a big win for collegiate athletes and their battle for compensation. But unionizing collegiate athletics is layered with multiple issues ranging from the differences between private and public institutions, tax issues and vast economic implications.

Jay Bilas, an ESPN College Basketball analyst, former Duke basketball player and lawyer argues that the NLRB’s decision won’t affect anything in the short term, as the decision of whether collegiate athletes can unionize will, ultimately, end up in federal courts if it’s able to pass the national NLRB. But scandal has surrounded the NCAA since its formation more than a century ago, and now, more than ever, athletes, administrators and fans sense a momentum of change.

In 2013, the NCAA March Madness Tournament brought in more than $1.1 billion in television advertising revenue, $55 million more than the NFL Playoffs and $223 million more than the NBA Playoffs, according to ESPN. Student-athletes do not recoup any of that revenue, besides an athletic scholarship that ranges between $5,000-$65,000 per year. In 2008, the athletic programs at Alabama, Texas, Ohio State, Florida and Tennessee each made more than $100 million in total revenue. Alabama’s Head Football Coach, Nick Saban, is the highest paid public employee in the State of Alabama and makes at least $7 million per year, which is more than the salaries of all the head football coaches in the Mid-American Conference combined.

The NCAA argues that amateurism and money are mutually exclusive. But collegiate athletes, especially in sports that turn a profit, such as football and men’s basketball, continue to challenge that notion. However, the NLRB decision could have unexpected tax implications and throttle the momentum. The motion put forth by Northwestern players and their lawyers argued that athletes received compensation in the form of a scholarship making them employees of the university. If the scholarship were deemed as taxable income in federal courts, an athlete would have to pay at least $15,000 in federal taxes on a $61,000 per year scholarship. In addition, this particular ruling only serves private universities, because the NLRB does not govern labor matters at public institutions. A majority of the top performing Division I collegiate athletic programs are public universities, including all five of the universities that exceeded $100 million in total revenue in 2008.

If collegiate athletes were ever able to unionize, the NCAA would deem them ineligible for receiving compensation for play. And the NCAA has always been happy with taking the easy way out and promoting inertia. But the answer to paying collegiate athletes is simple and not as convoluted as the NCAA makes it seem. To pay athletes, universities could utilize a free-market approach, as it’s worked well for the rest of us. Like any other contract, the player and university could negotiate terms, require a player to stay for three or four years, introduce non-compete and behavioral clauses and detail a performance clause that highlights performance goals on the football field or basketball court and in the classroom. Smart minds can dictate how change can be effective and efficient and satisfy the needs of all parties involved, but asking fat cats to stop eating and make room at the dinner table, might be a little harder.

Sources: ESPN, NPR, SBNATION, ESPN

 

As a premier sportswear brand, Lululemon is known for its high-end, innovative athletic apparels that are designed specifically for yoga practice. During the recent years, its product types have expanded into a variety of technical athletic apparels for different sports.

In the United States, participation in sports has been constantly increasing slight during the past few years, and is expected to continue such slow growth, at a rate of 0.5 percent, until 2018. Even during the economic recession, sports participation increased as people used sports activities to kill their time. As a healthy alternative exercise method as well as a convenient individualized fitness activity, yoga practice has gained rising interest from sports participants over the years and is one of the major sports activities that were responsible for most of the increase in the overall sports participation within the United States. Additionally, participation in yoga practice will see strong growth in the near future as a result of people’s increasing perception that physical activities like yoga will lead to an overall healthier lifestyle. According to the latest study conducted by Yoga Journal in 2012, approximately 20.4 million Americans practice yoga, while the number was only 15.8 million based on the study in 2008. As a result, yoga practitioners in the United States now spend over $ 10.3 billion every year for yoga products and services. This is a major opportunity for Lululemon, as it is known for its innovative, high-quality yoga apparels, which is on greatly increasing demand due to the trends in the industry and marketplace.

However, despite the opportunities in the marketplace, Lululemon has faced many challenges, especially in terms of increasing competition, both domestically and overseas. For instance, Nike is the biggest and one of the most famous sportswear brands in the world, offering high-end, high-quality sports apparels to its customers, just like Lululemon does. However, with a dominant place as well as a much wider reach in the market, Nike had earned $6.3 billion in sales in 2012, while Lululemon earned $1 billion during the same year. Unlike Nike, Lululemon enjoys its reputation and popularity mainly in the United States and Canada, and even though it offers a variety of technical athletic apparels for different sports, it still mainly focuses on the niche market for yoga fashion.

Considering Lululemon’s situation and the trends in the sportswear industry, another opportunity for Lululemon is that it may want to expand its business focus more into the global market. With only a few physical stores in countries other than the United States and Canada, Lululemon should consider having more physical locations set up globally, as well as provide easier access to online shopping, like better shipping and payment policies, for customers around the world. Moreover, besides its popular yoga apparels, Lululemon can expand its products lines and provide customers with more innovative, high-quality yoga practice equipment, like yoga mats and balls. As indicated by the IBISWorld Industry Report, even though there is strong competition, including overseas competition, in the market, sales of athletic equipment will continue growing in the following periods, especially for popular sports activities like yoga.