Foundations manage a huge selection of vast amounts of dollars, but most hold very stringently to using no more than 5 percent of their investment profits for philanthropic purposes. Current practice is to create a high wall between a foundation’s investment arm and its own program activities. More than one program officer has been told that he / she doesn’t have a prayer of influencing a foundation’s investment practices.
But does that has to be the case? What if foundations invested this money in such activities as Program Related Investments (PRIs), or created something new like “nonprofit investment bonds,” or began a financing program for nonprofit organizations with scalable financial types of sustainability? Many nonprofit organizations have the capability of growing their scope and impact but are hindered by the systematic lack of investment capital. Foundations have the potential to do more to move forward philanthropy and meet up with the needs of communities today. Small changes in basis investment methods can unleash new resources that could reinforce nonprofits and offer a return on investment for foundations’ investment managers.
Today you have biotech, Silicon Valley, e-commerce companies: they’re all coming for us. EuromoneyYou’ve been the most successful bank or investment company for quite a while. How can you avoid complacency? JD Because our meetings concentrate on what we do incorrect. But we all worry about the risk of complacency. We talk about it a lot, in every town hall.
We always ask why weren’t we faster with this, why didn’t we do better on that. A plane was delivered by us weight of our visitors to China to see their leading companies. They came back motivated: just a little scared, but motivated to do more and quicker. Euromoney Are you a little scared? JD Yes, but I’ve been that way always. Just how many times have I experienced it, seen companies blow and terrible things happen or your competition eat your lunch time up. You’ve got Silicon Valley putting tens of billions a year into biotech and then you’ve got the big technology companies.
They’re to arrive some fashion. It might not be a frontal challenge, however they all desire to be in payments, each of them want to hold money. Euromoney However they don’t desire to be regulated as banks. JD not – and that may be a safety Maybe. But our management team does not rely on that. Because you can white-label a bank or investment company.
And someone will attempt and do that. Euromoney How did you switch Bank or investment company One and JPMorgan Chase into the world’s biggest bank or investment company by market cap? JD When you go through the Bank One/JPMorgan Chase deal there are three things to consider. One was price. Which has to make sense for both ongoing celebrations, but put that aside.
The second thing is exactly what I call the commercial business reasoning. Neither bank or investment company was doing great. We both had credit card issuers that I’d say were third rate. So whenever we put them together, we had a more effective third-rate credit card issuer. 2 million and were making zero.
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So, you’d much bigger consumer and got to consolidate now. In cash management, it was quite similar thing. In asset management, JPMorgan was much bigger, but Bank or investment company One also got a pretty neat asset management business. JPMorgan’s private bank was much bigger. Bank or investment company One’s fit right into it. 500 million a year in fixed income sales and trading, because you could really focus on FX, swaps, and bond underwriting in places where no one else did it.
Bank or investment company One had an enormous corporate client base with big credit publicity. I said if we bring these banks collectively, we can reduce our credit exposure and bring a lot more JPMorgan investment bankers to that big client base. Bank One had a great middle-market franchise in the Mid-West; JPMorgan Run after got a great one in New Texas and York.
So, there was huge business logic. And third is the ability to execute. You might have pointed out that the same day Bill and I announced the deal we also announced the management team. In a merger Usually, the two edges wait, try, and pick and choose. But we began from day one with weekly and regular monthly conferences on tech, or, systems integration, expenses.