Five charities to invest in

Published: Monday, January 19, 2004 at 6:01 a.m.
Last Modified: Monday, January 19, 2004 at 3:00 a.m.
The Motley Fool is raising money for five unusual charities in our seventh annual charity drive. Nominated by our readers online, they're truly "Foolanthropic." That is, they create sustainable solutions, their missions are epic in scope, and their beneficiaries participate in their own aid. Please meet some wonderful organizations:
  • America's Second Harvest (800-771-2303, www.second feeds 23 million Americans annually through food banks and food-rescue programs. It also operates Community Kitchens, where underemployed people learn food-service job skills and prepare meals for the hungry.
    n Ashoka (703-527-8300, ext. 256, finds practical visionaries with world-changing ideas and offers them a modest living stipend for three years, freeing them to work full time implementing their innovative solutions. Ashoka's social entrepreneurs have, for example, brought electricity to millions in rural Brazil, revolutionized India's elementary school curriculum and preserved endangered grassland in South Africa.
  • Grameen Foundation USA (202-628-3560, ext. 114, www. supports microfinance programs that lend money to the poorest of the poor in the United States and developing countries so they can start small businesses and lift themselves out of poverty with dignity. Even small donations can transform lives, and the money is re-lent over and over again.
  • Heifer International (800-422-0474, gives economic survival to poor families worldwide by providing livestock and training, enabling them to improve their health, earn money, educate their children and preserve their environment. Recipients give their animals' first female offspring to other needy people, continuing a chain of sharing, community building and self-reliance from Appalachia to Zambia.
  • Lifewater International (888-543-3426, trains teams worldwide to drill and maintain water wells for themselves, donating materials and the volunteered time of North American professionals. More than 2 billion people have no adequate access to safe drinking water and good sanitation.
    Learn more about these fascinating organizations and how to support them at www. or via the contact information above. You can also send checks made out to any of the charities above (NOT to Foolanthropy, please) to us at: Foolanthropy, c/o The Motley Fool, 123 N. Pitt St., Alexandria, VA 22314. We'll forward checks.

    Gift-card caveats

    Did you receive a gift card over the holidays? It might end up worth less than the plastic it's made from if you wait too long to use it. The value can start to plummet as soon as six months after it was purchased. Bank of America charges a $2.50 monthly maintenance fee after six months. Wal-Mart levies $1 per month after 24 months of card inactivity.
    Bah humbug, indeed. Worse, many recipients leave cash on the table. According to Consumer Reports' research, consumers fail to redeem about 10 percent of the money on gift cards. With gift-card sales expected to exceed $45 billion this year, that means more than $4 billion will likely go up in smoke. Actually, it will fatten the wallets of happy retailers.
    Here are a few tips to get the most out of that gift card:
  • Read the fine print, and look for expiration dates and fees, such as ones charged for inactivity or checking your balance. Some banks also charge a fee when the card is issued.
  • Treat your cards like cash. If you lose one, you may be out the entire value. But many national retailers will replace a lost card (for a fee, of course) if you can document the card's purchase and provide the ID number. That's why Consumer Reports recommends that you keep the receipt, and write down all pertinent information.


    Why do companies bother splitting their shares? They get money from their stock only when it's issued (such as from an IPO), not from splitting it.
    V.O., St. Louis


    Stock splits are in many ways pointless, but companies often think that a lower price will entice more investors. Investors should realize, though, that if a stock is trading at a steep price, they can just buy fewer shares of it. A $3,000 investment might be 50 shares of a $60 stock or 200 shares of a $15 stock. Fifty shares can double in value just as quickly as 200 shares can.
    Investors get excited about stock splits because they like the idea of owning more shares. Resist that mentality. A split is really just like getting four quarters for your dollar - the value of your holdings doesn't change.
    n n n


    What's the best number of stocks to own?

    S.D., Huntsville, Ala.


    There's no one-size-fits-all answer. Ideally, your money should be concentrated on your best ideas - the companies you think hold the most promise. If you think a certain 10 companies are likely to increase your wealth the most, why spread your limited funds over an additional 10 or 20 (or more) less auspicious firms?
    Spread yourself too thin, and it becomes hard to keep up with all your holdings, which you should aim to do at least every quarter. (Less often can be OK with some established, stable blue chips.) If you have 25 companies in your portfolio, that means 100 quarterly reports. Yikes.
    Focusing your money on too few stocks is extra risky, though. You stand to gain or lose a lot. For most people, eight to 15 companies is a good total to shoot for.
    Send questions and comments for The Motley Fool to
    SMARTEST INVESTMENT A number of years ago, my next-door neighbor was in a group starting a local bank. So as a favor, I gave her $1,000 for 100 shares. Over time, nothing much happened, but then the bank began merging with other banks and the stock was split several times. It has now become 440 shares of U.S. Bancorp, worth more than $10,000. Better yet, I receive a dividend check for about $90 each quarter, so every three years or so, I get my original investment back. I guess it's really my luckiest investment instead of my smartest.
    The Fool responds: Lucky or smart, good for you! Many people have made some good money investing in small banks that get gobbled up, and banks sometimes pay solid dividends. Still, as you hinted, to do well you should take the time to learn more before investing - about the banking industry in general and about the bank(s) you're considering plunking money into in particular.
    MONDAY, JANUARY 19, 2004 Comics 7D Television 6D
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