Investors roll dice for Boys and Girls Clubs

A competitive nature isn’t required to be a participant in the Boys and Girls Clubs of Springfield’s Invest to Invest program, but it can make it more fun.

For 11 months, investors watch the performance of stocks that will be donated to the Boys and Girls Clubs at the end of the year. The goal is to raise money for a good cause, possibly increase tax credits and win a cash prize, and have some fun along the way.

“I think the best parts of the game for a lot of us are: No. 1, helping the Boys and Girls Clubs; and No. 2, getting to throw darts at each other and talk trash on the Internet. It gets pretty ugly,” said Bobby Allison, who has been participating in the Invest to Invest program since it started in 2001. A self-described flunky at Custom Protein Corp., he oversees sales and purchases for the animal protein producer.

Invest to Invest was the brainchild of SRC Holdings Corp. CEO Jack Stack, said Mel Saunders, financial adviser at Wells Fargo Advisors and chairman of the Invest to Invest committee.

“It’s a more creative way to raise money and also take advantage of tax credits,” Saunders said.

In February, program participants agree to donate $1,000 in shares of an individual stock to the Boys and Girls Clubs. Participating donors decide on the stock they’ll purchase. At the end of the year, the Boys and Girls Clubs receives the stock, along with whatever gains or losses incurred between February and December.

Chris Whitehead, director of resource development at the Boys and Girls Clubs, said participants can receive a 50 percent break on their state taxes by claiming youth opportunity credits, along with any federal deductions for making a charitable donation. And because the stock is donated to the nonprofit, players don’t have to pay capital gains taxes on their earnings, he said.

“Our winner last year picked Ford Motor Co., which gained 431 percent last year. His $1,000 donation became a $5,000 donation,” Whitehead said of J-K Investments Inc. owner John Risdal. “Really, it probably made him money as far as taxes go. That’s the upside of the game.”

Another benefit is the chance to win cash prizes. The first place winner receives $1,000; second place gets $500; and third place picks up $250, Whitehead said.

Saunders tracks each stock throughout the year and regularly sends spreadsheet updates.

“It’s not as sexy as fantasy football stats. It tells the players’ names, what stocks they picked, and keeps track of who’s in the lead,” Saunders said.

At press time, there were 20 investors participating in the 2010 fundraiser, which runs Feb. 15–Dec. 31. Saunders said late entries would be accepted.

The ultimate goal is to have 100 players, but the number of participants has dropped during the recession. In 2009, there were 35 players, compared to 66 players in 2008, Whitehead said.

There may have been fewer players in 2009, but the nonprofit’s potential earnings of $52,563 – not all have been collected yet – are only slightly lower than 2008’s $56,013.

The Invest to Invest donations contribute to the club’s $2.5 million annual budget. Most of the nonprofit’s funding comes from individuals, the support of local Sertoma clubs, an endowment that makes up about 14 percent of the budget, United Way contributions and special events, Whitehead said.

The nonprofit also uses the program as a teaching tool for its teenage members. The Springfield Sertoma Club sponsors a group of approximately 10 kids at each of the three Boys and Girls Clubs units, Whitehead said, giving each group the $1,000 suggested donation to purchase stocks.

“It’s teaching me how to choose which stocks are going to do best,” said Rose Stockwell, a Central High School senior.

Stockwell, who is part of the Stalnaker Unit team, participated in last year’s Invest to Invest. The team decided to play it safe, Whitehead said, and purchased treasury bonds at $28. When it came time to cash in, the bonds were worth $37 each and Stalnaker placed 17th in the fundraiser.

This year, Stockwell said, the team is looking into Wal-Mart Stores (NYSE: WMT) and Newscorp (ASX: NWS.AX).

“We’re making charts of each and seeing which is doing better over a period of time to see which is more stable,” she said.

That’s a more scientific strategy than Invest to Invest veteran Allison’s. This year, he’s getting behind Intel Corp. (Nasdaq: INTC). The decision, Allison said, has less to do with strategy and more to do with instinct, but he is hoping that this year, he’ll come out a winner.

“I think I’m 0 for 9. I have a tendency to bring up the rear,” he said.

How did founder Stack perform? His 2009 stock pick of Fluor Corp. (NYSE: FLR) earned him the 21st spot on its 16 percent return.[[In-content Ad]]