Year: 2009

I’ve written about begging before.  As long term readers can probably guess, I’m fairly opposed to it (heck, I’ll even tell people off for begging in “World of Warcraft”).  Aggressive panhandlers are one thing, but at least their actions are usually motivated by a personal and immediate need.  Others have actually chosen begging as a career, and often make very good salaries doing so (or managing other people who do it on their behalf).

The brother of a family friend does fund raising for universities.  He basically hooks up with a school, and is given the mandate to boost donations from alumni.  He’s paid 10% of whatever he raises for the school (and is given a staff to help him with marketing, calling alumni, etc).  This can certainly rub people the wrong way (when they make a donation, they probably don’t realize that 10%+ is being taken off of the top to pay this guy), but from the university’s perspective, they’re way ahead (even after giving him his cut) if he can dramatically increase the donations.

At the beginning of the year Michael O’Mahoney left his job as the head of the “Sick Kids” fundraising arm, a position which paid $624,103 in salary and benefits.  Anyone who has spent time downtown in Toronto has seen the Sick Kid canvassers, who flank a sidewalk in pairs making it impossible to walk past without being solicited from one of them.  It’s pretty had to get angry at people fund raising for children who are ill, and to their credit they aren’t pushy at all, but it’s always bothered me that these young kids are being paid to shake down pedestrians.  Friends have insisted to me that they’re volunteers, not paid employees, but after I looked into it (I asked them on the street and looked on-line) it became quite clear that they are paid – currently starting at $12 / hour.

It has been so successful that recently the Red Cross has adopted a similar campaign here in KW (shaking down employees outside of RIM).  I suspect in the current economic climate, a number of students would be tempted to do this as a summer job – $12 / hour is a lot better than they’d be earning at fast food or doing yard work.

When I was a child my mother used to go door-to-door collecting for the CNIB (her grandmother was blind and glaucoma runs in the family).  This was begging as well, but I feel more comfortable with her doing this as a volunteer than someone being paid to do so. Even if someone supports being paid to fund raise, should people be getting rich doing so? (as in the case with 10% of school donations or an annual salary that’s more than 1/2 a million dollars).  I’m pretty sure this would bother many donors.

One of my math teachers in high school (a raging Scot) ranted one time about how he wouldn’t let his daughter participate in school fund raising activities because he didn’t want her “begging from the neighbours”.  The same guy compared an annual all-school hockey tournament to Nazi Germany, so at the time I thought he was a few cards short of a deck.  As I’ve gotten older, I’ve come to appreciate his perspective, and I think I’d be reluctant to allow my children to participate for the same reasons.

A friend of mine donated to Sick Kids the first time he encountered them on the street.  After he gave them $20, he was subjected to a continuous stream of requests for more money (phone calls, letters, etc).  He figures they quickly burned through the $20 trying to get more money out of him and he eventually insisted they take him off of all their lists as he was sick of being disturbed (and has said he’ll never donate to them again).

In late 2006 a scandal erupted with the Canadian arm of Mothers Against Drunk Driving that they were using almost all the funds raised to pay salaries and fuel additional fund raising activities with very little going to actually combat drunk driving.  My experience with non-profits has sadly been that this isn’t terribly unusual.  Good intentions are considered worth as much as actually accomplishing something.

“The Road to Hell: The Ravaging Effects of Foreign Aid and International Charity” by Michael Maren is an amazing book that details his desperate attempts to do good work in Africa, while being confronted with the reality that his work either was ineffective or actually harmful to the people he wanted to help (and was subverted for the benefit of those in power at the NPOs and in the African nations).

Do you donate money to charitable causes?  If you do, how do you ensure that your donation will be used effectively?  How do you pick where to donate?  Do you think it is reasonable for people to be paid for fund raising?

I received notice in the mail recently that the RBC 1% rebate has been paid out in all our 4 accounts that I moved their last year to take advantage of their 1% rebate deal.  Basically the offer was that if you transferred any money from other brokerages to RBC they would pay you 1% of the value of the assets.  Of course you had to wait for the money – I didn’t receive mine until June of this year so they make sure you can’t just transfer the money, get the rebate and transfer out which makes sense.  I only wish they had paid the 1% on current asset value and not the value as of last year which was lower.  Given that the transfer involved about 2-3 hours work in total, it was well worth the effort.

Now that the rebate has been paid I can either stay with RBC (not!) or switch back to Questrade discount brokerage since I rather like them.

Did anyone else take advantage of this deal?  Are you staying with RBC or switching to another discount broker?

If you are planning to move back to Questrade then read about the Returning to Questrade deal on transfer fees.

As a quick clarification, the “relationships” in this title refers to any people who have an ongoing association with each other, not exclusively romantic relationships.

Thicken My Wallet recently wrote a great post on negotiation which addresses negotiation where you have an ongoing relationship with the other party.  Most of my negotiation posts have dealt with “one off” transactions where you never expect to do business with the person again.  It’s definitely a different game when you keep interacting after the deal is done.

In game theory, they take a mathematical approach to strategic situations (where your best action depends on the actions of others).  The answer changes dramatically whether it’s a single iteration game, or a multiple iteration game.

Years ago I got working at a software consulting company (other companies would hire them to develop software).  During the negotiations the owner played all sorts of games with me.  One that he managed to pull off was he described the position as a “Java developer” role, and twice said “there are a couple projects in the works, so we don’t know EXACTLY which you’ll be working on when you first start”.  At the time, I didn’t pay much attention to this, but it turned out (once I’d signed the contract) that rather than doing development, they were going to have me doing application work for 6 months.  This is fine for what it is, but the consequence for me is that I would lose 6 months of skill development (I would be learning completely non-transferable skills for using that specific software application:  something I had no interest in, which he realized and why he downplayed it).  Before me they’d had a high school student working on it, so that gives an idea of how “challenging” the work was (but they needed it done, which is fair from a business perspective).

Tricking me into working on something other than what I’d expected turned out to be a very costly mistake for both of us.  I *MAY* have still accepted the job if they’d been upfront about what I’d be doing, told me that was what the business needed at that time, and given me a firm commitment WHEN I’d get back to doing the work I actually wanted to do.  As it played out, I couldn’t get over the fact that they’d pulled a bait-and-switch on me, and they remained unrepentant (with the owner repeatedly telling me he’s a sales guy so he naturally “puts the best spin on things”).  By the time we went our separate ways, they’d wasted a lot of money bringing me on board, and I’d wasted a lot of time finding and getting up to speed in a position which wasn’t a good fit for me.  Since then I won’t take a job if they can’t tell me EXACTLY what I’ll be working on day-one (and most companies have been able to tell me this – why would they be hiring someone if they don’t know what for?).

I’m constantly amazed how hard organizations haggle with employees over hirings and raises, and they don’t seem to factor in that they will have to work with this person for the period of their employement.  I’ve been treated rudely by people involved in the hiring at a number of organizations, and it blows my mind that they’d jeopardize me as a potential employee over something as silly as bad manners.  One interview I went to there were three men and two of them kept surfing on a notebook and whispering back and forth during the interview.  They asked me back for another round, and I declined, telling them if they couldn’t be bothered to give me their attention during an interview, I didn’t want to work with them.

People who are really strong hagglers / negotiators can get themselves in trouble if they keep getting good deals off of friends and family.  You might be able to convince the wife to do the dishes 4 nights in a row, but the fact that she agrees doesn’t mean she’s going to be happy about it.  It saddens me to see marriages degenerate into a state of war, where each disagreement becomes a battle, and winning the battle just causes more problems down the road.  Eventually both sides lose when the relationship can’t handle any more strain and is dissolved.

Recently I was talking to a friend-of-a-friend who is involved locally in real estate.  I’d asked him for a copy of the “offer to purchase” he’d last used when he bought a property without an agent.  He was willing to give me a copy, but wanted me to take him out to a fancy restaurant in exchange (with $35 entrees and $50 bottles of wine).  Rather than going out for a $150+ dinner, I just bought an offer to purchase at the book store for $15.  A month later, he told me he was going to be out of town and asked if I could show one of his properties for him.  Unsurprisingly, I wasn’t able to make the time to help him out.  He tried to get a killer good deal out of me for a copy of an offer to purchase, and burned the relationship with someone local who was familiar with real estate investing.

Some salespeople (real estate agents particularly like to do this) will try to sell themselves as focusing on the long term relationship (with the implicit commitment that they’ll give you a fair deal because they want to do business in the future and get referrals from you).  My experience has been that they realize they aren’t guaranteed future business or referrals and will (rationally) push to get the best deal for themselves in each transaction.  I don’t blame them for this, but it irks me when they pretend that they’re advisers (instead of salespeople) and are investing in the relationship (when they’re maximizing their short term benefit).

As Thicken My Wallet suggests in his posts, there are times when a negotiation is a one-off deal.  Other times you’re going to keep interacting with the person in the future.  When you’re going to have future interactions, it doesn’t mean you have to give them everything they want.  Instead, factor that value of these future interactions into the negotiations, and make sure that you aren’t pushing for a good short term benefit (that will cost you over the long term).

Have you had any experiences where people pushed hard for the best immediate deal and it hurt them long term?

I entered into a stock picking competition with a number of other bloggers at the beginning of this year.   I picked four small oil-related companies as part of my “swing for the fences” strategy.  So far it has paid off since my portfolio is up over 40% for the year.  In the last stock picks update I was in first place thanks to the surprising strength of oil prices.  Regrettably my performance has dropped off a bit and a couple of my competitors have picked up their socks.  Regardless, I’m still in 3rd so I’m happy with that.

The rankings

Here are my stock picks and purchase price and (Oct 1 close)

BCF.to – Bronco Energy $1.27  ($0.76)

HOC.to – Heritage Corp $3.65   ($8.31)

TOG.to – TriStar Oil and Gas $11.41  ($15.38)

CLL.to – Connacher Oil Gas $0.74  ($1.06)