Wanted: Wall Street players with a heart for charity.
That’s the call in the Invest to Invest initiative, a game of stock market trading that benefits Boys & Girls Clubs of Springfield by pitting investor wits against each other.
For 12 years now, SRC Holdings Corp. CEO Jack Stack has organized the investment game, and this year he took top honors among the 57 investors who paid to play in the fundraiser that ended Dec. 31. Participants pledge $1,000 to the Boys & Girls Clubs and select a stock to watch throughout the year some choosing to actually invest in their stock picks and others simply keeping score on paper.
Stack, who has participated in the initiative since its inception, earned the top ranking with his $1,000 buy-in of Jarden Corp. stock (NYSE: JAH), according to Chris Whitehead, director of resource development of the local Boys & Girls Clubs. Jarden Corp. shares increased 52 percent to $55.70 per share between Feb. 15 and Dec. 31, the length of the game.
There was a three-way tie for second place, Whitehead said.
Stack’s 1-year-old granddaughter Finley Chambers joined David McQueary, former president of McQueary Bros. Drug Co., and Mark Nelson, a wealth management adviser at Merrill Lynch, in receiving runner-up honors with their selections of Bank of America stock (NYSE: BAC). The stock climbed 49.3 percent to $11.61 per share by year’s end.
“In the end, it was a race between Jarden Corp. and Bank of America, so I knew even if I lost a 1-year-old would win,” Stack said with a laugh, noting he selected Jarden Corp. largely because of the company’s diverse product offerings and its $537 million stock buyback program.
Another youngster, McQueary’s 10-year-old son Aiden, also finished well by choosing biotechnology company Agenus Inc. (Nasdaq: AGEN).
Dean Young, co-founder of Heim Young & Associates Inc. and Invest to Invest committee chairman, said there is always friendly banter tossed back and forth among participants.
“We’ll send updates to participants a couple of times per month and say who is in first place and who is in last place and kind of needle some of the folks who aren’t doing quite as well – but in a good natured sort of way,” Young said.
Stack said trash talk is part of the fun.
“Everybody thinks they know it all, so it is kind of fun to see the losers crying in their towels and the winners rubbing it in, you know,” Stack said.
The top three finishers receive cash prizes of $1,000, $500 and $250, respectively, though Whitehead said cash recipients usually donate the winnings back to the nonprofit that specializes in programs to improve the quality of life for disadvantaged youth. Stack said he’s already told Whitehead to use his winnings to help promote the event in 2013.
“Even if it is a bust and the stock is underwater, we do ask that you donate the difference to $1,000,” Whitehead said, noting the fundraiser has raised more than $550,000 since its inception for Boys & Girls Clubs of Springfield.
Whitehead said in past years several people have picked stocks that have taken off. For instance, Whitehead said Jon Risdal, a commercial property investor through J-K Investments Inc. and Risdal Enterprises LP, bought Ford Motor Co. stock in 2009 and netted $5,500 for the nonprofit.
This year, a little more than half of the group guessed wrong. Whitehead said only 23 participants watched their investments grow.
Organizer Young said some players team up to reach the $1,000 donation level.
The investment-focused fundraiser also has encouraged youth at the clubs to get involved and interested in equity markets. “The youth of our three different units always participate,” Young said, noting sponsors help cover their buy-in costs.
Stack said he started the program as an entertaining way for businesspeople to raise money.
“It was an idea to create a revenue producing product for the Boys & Girls Clubs. It was something they could have fun with while building revenues,” Stack said. “It turned out pretty well.”
Financial adviser Young said there are tax advantages available for donors through programs such as Invest to Invest. He said donations are tax deductible for those who itemize their deductions, and the amount of deduction depends on income levels.
For example, he said a person who pays in the 25 percent tax bracket and 6 percent on state income taxes would get back $310 on a $1,000 donation. Should that donation appreciate to $1,500, the income tax credit would grow as well – to roughly $450, he said.
Young said additional state tax credits, called Youth Opportunity Program credits, have been available for participants in the past, but those are awarded on a first-come first-serve basis.
In 2013, he said the stock program would run Feb. 1–Dec. 31.
