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Magazines > Information Today > February 2004
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Information Today

Vol. 21 No. 2 — February 2004

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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