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Re: E-M:/ Another idea for parks

------------------------------------------------------------------------- Enviro-Mich message from Christopher Graham ------------------------------------------------------------------------- Hi, Mr. Gear --

Thanks again for good ideas.  Actually, a State Parks Foundation was formed about 10 years ago or so.  Governor Engler appointed a Board to get it going, but it did not take off -- for reasons that I do not know.

In any case, it already is possible to donate on a tax free basis to Michigan's Parks via this Foundation, and it is likely relatively easy already to do some of the other arrangements you suggest, through it.

I will ask for the details about the Foundation and let you know them.


At 10:44 AM 3/26/2006, jmgear wrote:
Enviro-Mich message from jmgear <jmgear@acd.net>

I think there's a huge untapped reservoir of support for parks that you're overlooking -- the money that park supporters in Michigan have in their retirement funds (401(k), 457s etc.) and in the reserve funds of groups they belong to.
Park financing is always framed as if the only way to raise money is either to get a direct appropriation or to use the conventional finance system of tax-free bonds to raise money.

We know that the state doesn't have any money to make direct appropriations.

And bonds, as we typically conceive of them, are designed for sale in commercial markets, which requires paying commercially attractive rates of return and also paying big dollars to guys who like to wear snappy suits to handle the bonding.

Thus, the bonds are designed to be attractive to capital investors who care nothing about how their investment is used, caring only about how well it pays.  Parks have a hard time playing because you can't both pay the rates of return demanded by the investors and spend the money on preserving the parks.

SUGGESTION:  Create a program that lets anyone in Michigan (or, heck, outside of Michigan) direct some of the money they are putting away for retirement into a fund [under their IRA/401k or 457 plan] that is used 100% to support state parks.

The fund would essentially be long bonds, paying a low, but guaranteed rate of return--i.e., bonds where the people know that they won't be getting a competitive interest rate.  But, in return for sacrificing some interest points, people will be rewarded by knowing that they are investing in the preservation of something that will make their state better now, their retirement years richer, and will enable their children and grandchildren to enjoy that same investment.

The same motivation that causes millions of people like me to pay more for fair-trade coffee, clothes not produced in sweatshops, and to voluntarily pay fees to offset the carbon they emit by driving (see terrapass.com)--the desire to use our money to create a better world rather than just maximize consumption--can be harnessed if you offer me (and people like me) a way to direct a share of my retirement investments toward supporting state parks, even though I would sacrifice something in capital return on my investment.

I wouldn't give you 100% of my retirement investments, but I could easily see moving 1-5% of my 401/457 money into something that provides such a high psychic rate of return.

$90M over five years is only $18M per year, or $1.80 per Michigander per year (rounding to 10 million of us).

And certainly many Michigan nonprofits (Elks, Eagles, Sierra Club, Audobon, bike clubs, hunting groups, you name it) and churches have reserve funds (endowments, building funds etc.)  I bet a number of these would be willing to accept a lower return on some of their money in return for bonds that offer high security and the chance to support Michigan parks.

If groups and individuals equal to only 1% of Michiganders --that is, a total of 100,000 people or groups with investable assets --  are willing to invest $900 in one go or just $180 per year over five years, then you made your goal.  For people paid weekly, $180 is just under $3.50 per week.  You could also accept rollovers from established IRAs, etc.  If people would make a single year's IRA investment with you ($3-4000), you would need to attract far fewer people.  Many groups could afford to buy a lot more than that, and would appreciate the safety..

We know people in Michigan like to give money to support worthwhile things in Michigan--witness the specialty license plates for universities, lighthouse preservation, etc.  Those are people who are simply GIVING the money away.  These park bonds, in contrast, would preserve the original investment, thus providing a supersafe, federally tax-exempt (albeit low return) investment.

Just a thought ...

Christopher Graham wrote:

Mr. Gear --

As a member of the State Park Citizen's Advisory Committee, I can assure you that your suggestion was not only heard by staff and members of the Committee, but that we already were working on that idea and many other related ideas.

ENVIRO-MICH:  Internet List and Forum for Michigan Environmental
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Christopher L. Graham, ASLA
(734) 975-7800 (O)
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