Two big bailout stories came out today and all day I've been thinking about how both are interlocked. Most of us heard about the declared bankruptcy of GM but it was the tale of AIG* trying to recapture their charitable endowment for executive salaries and bonuses that peaked my interest the most. Fortunately my organization does not receive support of AIG and is not affected but there are dozens who are including Citymeals on Wheels. I think we can all agree that, if true, it is a despicable act of desperation. I am hoping the news reports and blogs are wrong but it got me thinking. Putting that story to one side, what if GM or AIG were treated like a charitable organization, non-profit or not-for-profit company? Would we bail them out? Would we prop up bad management for the sake of the mission? I don't think so.
At the start of this economic downturn many non-profits saw the warning signs, we began to tightening our belts and look at ways to retool and streamline project management systems. The word from many corporate boardrooms was that 'all bets are off' and to set clear guidelines for impact and expenditures. Yet as individual donations began to dry up and CSR departments began to downsize, we heard nothing either candidate to prop up these shortfalls. Knowing there would be no bailout, we became more nimble (we are 9% admin), more open to collaborate and more willing to partner with charities and social entrepreneurs with similar and/or complimentary missions. How much would have we saved if the big three had become the big one in September 2008?
Instead of installing 'a private board' of automobile executives perhaps Obama would be wiser to install successful not-for-profit leaders.
Another alternate plan that was relayed to me by multiple folks via Twitter is to go the whole hog and well beyond the Michael Moore plan. Buy GM completely, turn it into a not-just-for-profit company that builds and delivers an integrated and energy efficient public transportation system (
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*I should note that there are a number of shiny apples in AIGs executive cart. A few months back Jake deSantis resigned from AIG and donated all of his post tax bonus to charity, almost $750K. Here is his letter to Mr. Liddy. Kudos Jake.
Revolutionary breakthroughs will make possible a Self Powered Internal Combustion Engine - SPICE.
A SPICE can be used to power a hybrid. It needs no fuel and will end the need to plug-in, as the engine can run when parked and wirelessly transmit and sell power to the local utility.
The SPICE is powered by hydrinos. One barrel of water can equal several hundred barrels of oil. To learn more about SPICE and hydrinos see: www.chavaenergy.com Look under the heading HOW?
A second breakthrough is the MagGen. These magnetic generators, without moving parts, will replace batteries in electric cars, trucks and buses.
Scientists and engineers will doubt these technologies are possible until they have been validated by Independent Laboratories. That is an important step on the agenda.
Until now, car ownership has been an expense. Payments to car owners driving a hybrid with a SPICE, or powered by MagGen, are likely to be substantial.
When vehicles selling power to the grid fill a parking garage, it will have become a multi-megawatt power plant.
The cost of many vehicles might be paid for by utilities, as they purchase power whenever needed.
The parked cars each become decentralized power plants - a rapid, cost-effective path to a rebirth of the automobile industry.
This can create millions of green jobs!
And also end the need for new nuclear or coal burning power plants.
By the way, non profits are audited every year here in New York. If we had the same rule for banks none of the mess would have happened.
However, governments do not acquire their funds this way. They rely on taxation, which as everyone knows, is not voluntary. So when governments fund things that are non-profitable (which unfortunately is standard procedure) a double-loss to society is incurred:
Not only does the taxpayer have to give up money that he/she would have used in a more beneficial way, but the money itself is allocated by government in a non-resourceful way.
I think non-profits are ok...but they've got to be voluntary.
Government bailouts delayed this process of "creative destruction", making an artificially-animated zombie of GM. Now it's deep in the hole, and will probably be propped up for another decade or two.