COVER NOTES
In Other Words:
Getting Profitable
By Lauree Padgett
If cold weather is not your idea of fun, February
can seem like the longest, not the shortest, month
of the year. And if you're suffering from seasonal
affective disorder, you may be feeling a bit like Bill
Murray's character in Groundhog Day: frozen
on the freeway of time with a radio station that only
plays "I Got You, Babe."
But take heart. Whether Punxsutawney Phil sees his
shadow or not, spring is closer than it feels. To jump-start
yourself out of the winter doldrums and get your brain
revved up, here's an in-depth look at a pair of articles
from CyberSkeptic's Guide and Searcher.
Then, in honor of the Oscars' early arrival (the Academy
Awards air Sunday, Feb. 29), grab the remote and some
good munchies, kick the family pet out of the recliner,
pop in a few winning movies (maybe featuring some tropical
locales), and just forget about winter for a few hours.
Around the Market in 80 Clicks
So what do you know about stock markets? If it's
about as much as the former star of Terminator and Kindergarten
Cop knows about governing a state, here's an article
for your reading pleasure: "Keeping Up-to-Date with
Developments in Global Equity Markets," by Crystal
Sharp (CyberSkeptic's Guide, February 2004,
p. 4).
Financial markets are found in every country. To
put it in monetary terms, capitalization of the worldwide
stock market is approaching $35 trillion. Sharp explains, "As
new technology has changed cost structures and ways
of conducting business, international investing has
grown, and the industry is less regulated." She focuses
on some of these changes, specifically on equity markets,
and gives tips on how researchers can keep up with
the issues that affect regulatory, standard-setting,
company, and country research.
Share-holding businesses have been around since knights
were saving damsels in distress. However, share trading
did not become widespread until the Industrial Revolution,
when large amounts of capital were needed to build
factories and infrastructures. Publicly available stocks,
or equities, are seldom bought or sold but are traded
over the counter through brokerage firms. When larger
amounts of capital are desired in the equity market,
a firm will list its shares on a stock exchange to
appeal to a broader shareholder base. Got all that?
While critics compare stock markets to casinos by claiming
that they should be regulated, supporters argue that
stock markets are the most efficient way of bringing
investors and entrepreneurs together.
The use of alternative trading systems (ATS) via
electronic communications networks has been rapidly
increasing, largely due to the Internet. ATS participants
don't have to be members of a stock exchange to trade
listed securities. The listed securities can also be
traded through automatic order-routing systems such
as E-Trade. All major stock exchanges have a Web presence,
and many foreign sites offer an English version. According
to Sharp, "The single biggest issue affecting global
investing is the difference in regulations, disclosure
rules, and accounting standards across jurisdictions."
Anyone new to the investment industry will want to
check out Sharp's in-depth list of sites that cover
regulation and market information, the Federation of
Exchanges, financial research, country reports, and
investor education.
The Nonprofit Phenomenon
Did you know that there are currently more than 1
million nonprofit organizations (NPOs) in the U.S.—even
more than the number of Screen Actors Guild members
who really want to direct? And belying their name,
NPOs are greatly contributing to the economic growth
of the country. As Hazel Cameron reports in "The Nonprofit
Phenomenon: Internet Resources for Nonprofit Organizations" (Searcher,
February 2004, p. 33), nonprofit revenues increased
144 percent between 1997 and 1999. With a much greater
impact on the job force and some money to spend, NPOs
have started showing up on the business radar screen
as potential customers.
A wide range of groups—independent, third-sector,
volunteer, charitable, philanthropic, etc.—can
be classified as NPOs, but most focus on the health,
education, and social services sectors. For an idea
of nonprofits' scope, check out GuideStar (http://www.guidestar.org),
a directory that provides a database of more than 850,000
U.S. nonprofit organizations.
What roles do NPOs play in today's society? Cameron
writes, "Most provide public services; others play
an advocacy role, voicing social, political, environmental,
and community concerns...." NPOs can support the arts
as well as religious, ethnic, social, and recreational
activities. As more and more people are in need of
these types of services, the government is turning
to NPOs to provide additional support. Joint ventures
between NPOs and corporations are also on the rise.
Called "cause marketing," this type of alliance benefits
both partners, especially by bringing much-needed cash
flow to the NPO.
How does the IRS classify a nonprofit? Can nonprofits
lobby? Cameron highlights Web sites that explain how
taxes and politics somewhat limit the activities NPOs
can pursue. As for accountability, she notes, "Historically,
nonprofits have not been subjected to as much public
scrutiny as for-profit institutions." Thanks to Enron
and others, this view is changing. The Independent
Sector portal (http://www.independentsector.org) explains
the ways NPOs are improving corporate governance and
standards. Watchdog groups, such as the Better Business
Bureau Wise Giving Alliance (http://www.give.org),
have sprung up to keep NPOs honest.
Another growing source of information on nonprofits
comes from academia. The Hauser Center for Nonprofit
Organizations
(http://www.kshauser.harvard.edu) and the Literature
of the Nonprofit Sector (http://lnps.fdncenter.org) are just two of the sites Cameron recommends checking out.
On the whole, Cameron gives two thumbs up for the
quality of NPO information that's accessible on the
Web. She concludes that "most sites are comprehensive
and cover most major issues facing the nonprofit sector...."
Forces of Nature
I don't know about Punxsutawney Phil, but I'm ready
to go into hibernation myself. As if freezing temperatures
and gusting winds aren't enough, more snow is allegedly
on the way—but, shhh! don't tell my dad! Guess
the only thing to do is stock up on the bare essentials—Pepsi,
chocolate, Tostitos, and salsa—and plan a Star
Wars (original three, thank you!) marathon. So
until we meet again, may The Force be with you!
Lauree Padgett is Information
Today, Inc.'s manager of editorial services. Her e-mail
address is lpadgett@infotoday.com.
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