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working paper on economic development strategy - Conjoined Wealth Funds.


James Felton KeithMode Equity Partners@JFKii

Working Paper:Conjoined Wealth Funds (CWF)Spreading the wealth for mutual benefit

October 2013

Working Paper: This paper presents preliminary findings and thoughts and is being distributed to readers solely to stimulate discussion and elicit comments. The views expressed in the essay are those of the author and are not necessarily reflective of views of affiliate institutions or confirmed through rigorous research in the field.


Rooted in theory from Integrationalism that all things in existence are connected in some form or fashion, the economics of connectivity suggest that the more participants independently represented in a closed system, the greater the chances of the system for evolving sustainably. Originally derived from the investment activity of the Sovereign Wealth Funds (SWF) from emerging economies into those of the USA and the most stable economies on the planet; a Conjoined Wealth Fund (CWF) is a privately-owned investment fund (account) or group of funds composed of financial or physical assets such as property, precious metals, stocks, bonds, or other financial instruments. The expansion of the global economy depends on adequate participation for individuals and institutions regardless of scale of investment potential. Conjoined Wealth Funds invest capital globally to leverage global growth opportunities while maintaining stringent domestic reinvestment initiatives in order to spur and even subsidize growth in local geographic locations (municipalities, cities, states). A glocalization tool; CWFs are an economic education tool for influencing culture, as American non-profit entities use their unique legal and social status to engage cultures around the globe through 21st century financial solutions to cultivate progressive social growth in the radii of their local mission. Lastly CWFs aim to form a grid of intelligence to quantify and streamline and communicate the efforts between varied entities holding CWFs within their corporation.

Table of Contents

Page 1 IntroductionPage 2 ObjectivePage 2 Definitions and DisclosuresPage 4 ProblemPage 6 Solution & TheoryPage 8 Implementation of CWFPage 11 Broad Effects


Figure 1 - CWF life cycleA Conjoined Wealth Fund (CWF) is a privately-owned investment fund (account) or group of funds composed of financial or physical assets such as property, precious metals, stocks, bonds, or other financial instruments. Conjoined Wealth Funds invest capital globally to leverage global growth opportunities while maintaining stringent domestic reinvestment initiatives in order to subsidize depressed geographic locations (municipalities, cities, states).Conjoined Wealth Funds are usually held (but not exclusively) by non-profit organizations that acquire and accumulate funds in the course of their management of existing operations and affiliated benefactor initiatives within their community. Conjoined Wealth Funds are a source of major economic stimulus in their region.The accumulated capital is used to sustain local communities that are in some instances to opaque or sparse to receive the highest quality of goods and services a sovereign nation has to. While Conjoined Wealth Funds engage the global equity markets, their core investment focus is assisting a locale in the creation and sustainment of self-sufficient socio-economic communities and municipalities.Objective:After a review of the global financial systems potential, we are aiming to establish the viability of a fundamental shift in the ideal use of American tax-exempt organizations to seek revenue growth through investment or unearned income as a hedge to expenditures after gifts or primary income. This paper is to predate field research.Definitions and Disclosures:While looking at tax exempt organizations and exploring those with specific interests per their budgets and their missions to extreme local or neighborhood initiatives we derived that faith based organizations best represented the least sophisticated types of organization from a fiscal management standpoint, based on complete filing of Form990s with the IRS and members of staff listed on filing as dedicated to fiscal and fiduciary matters. reports a conservative estimate of $78,800,000. We know that a number of organizations outside of our ability to qualify have avoided filing a Form990 with the IRS and we estimate that these organizations round upward of the $100,000,000 mark in holdings per the geographic location.

Figure 2 - search criterion

Sovereign Wealth Funds (SWFs) are a state-owned investment fund investing in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such as private equity fund or hedge funds. Sovereign wealth funds invest globally. Most SWFs are funded by revenues from commodity exports or from foreign-exchange reserves held by the central bank.[1]

Figure 3 - SWF Institute frequently tracked SWFs Glocal Growth Opportunities Per wikipedias categorization of the list of countries based on the real Gross Domestic Product (GDP) growth rates, the growth opportunities are rigidly those that create tangible economic value. See Appendix A for all 220.

Figure 4 - List of countries per real GDP growth rates Pacifying Problems Organizations missions initiatives like gifting to the poor and to the faculty of the organization. Missions in expenditures without investment growth are inefficient and less effective than they could be. While more time is required to be spent investigating the investment strategy of the thousands of potential CWF organizations in our study locale. We have found dozens of organizations using strategies to invest in real estate exclusively. Strategies were carried out before, during, and after the economic recessions of the 2000s, and persist during migrations away from failing urban areas. Organizations attempt to grow value fiscally point out investment in real estate in areas that arent growing. Revenues CWF revenues Earned Income gifts (including tax deductible) from constituents of sorts Unearned Income profits from investments (look for formal definitions)

Problem: The global financial system has a culture about itself that is similar to most cultures that house both elite and mediocre extremes.[1] In the current American political climate pundits are talking about entrepreneurism as a replacement to jobs and emergence of new markets, but entrepreneurism alone wont compel local American communities out of poverty and public policy cant distribute entrepreneurism as a culture.[2] While people come together to trade their passions through trials and triumphs, there are few real-world solutions that facilitate significant change in how we trade value between economic classes and culture sects. Ive always thought that an idea without resources is merely a hallucination. Entrepreneurship is always welcomed, but is a luxury that perspective provides. There is also a cultural element to entrepreneurism that political policy cant create alone. Rallying, political activism, positive speech and action, policy reform, all create the kinds of noise that is needed to warrant change, yet none of those actions facilitate change.[3] As we build out the political infrastructure of our locale we much also build out our socio-cultural infrastructure. That activity is of economic means and not rhetoric alone. Some progressive socio-economic action on the part of local private stakeholders must accompany the political warrant and policy alike.

While traveling between the poorest (Africa) continents and the wealthiest (N. America) continents over the past decade, Ive realized a common disconnect between the cultures across oceans. Considering the hyper growth of South Africa (SA) specifically and the relative recession of the United States (US), I spent the better part of the 2000s acting as an intermediary between US investors and SA financial firms. I regularly found resistance because of a lack of knowledge about the investment region by the investor. The United States has enjoyed two centuries of domestic growth that, while impossible in some regions, can only compare to the international economic growth of the Brazil, Russia, India, China, S. Africa/Korea (BRICS) and smaller countries today.[5] The past few years of economic difficulties following the great-recession of 2008 have done a good job of showing lots of the cultural disconnects that the oceans hold. The economics of the modern day dont justify the need for interconnectivity to make rational political decisions regarding foreign/domestic policy which will compel small business decisions.[5] In a world where people are literally starving in both geographic extremes of national economic power, people find themselves consumed by the deeds of the day, unable to venture outside of their comfort-zone.[6] Instead of forcing the confined cultures of locale further away from each other, we should be leveraging the few professionals with some global perspective to create a glocal strategy that compels economic development.[7] In an effort for clarity, economic development can be defined in this context as: committing capital growth to locale. Glocal can be defined as: a newly coined blend of globalization and localization refers to a concept to describe individual, group, organization, product or service that reflects not only global standard but also local one.

Solutions & Theory:During an initial think tank at the Enxit Group (@enxit) at Sandton, South Africa in 2008 the objectives were laid out for how to engage social changes in any region. An economic solution was deemed most formidable. The ideal that partici

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