As a rule in investing, higher risks are necessary to achieve higher rewards. One particularly risky type of investment involves distressed debt or distressed securities. When a company that has issued securities finds itself in distress—that is, is approaching or has declared bankruptcy—its securities rapidly fall in value. These distressed securities can be purchased at an extremely low price; and should an investor believe that the security issuer will succeed in turning the enterprise around, the rebounding price can represent a large windfall.
Naturally, given the dire straits of the companies issuing these distressed securities, this type of investing involves significant risk—if the company goes fully bankrupt and closes, any issued security will be rendered worthless. Institutional investors like hedge funds often use the distressed securities to exert a measure of control on the company, and the large size of institutional funds allows for better risk management. But individual investors can succeed in this volatile part of the market by paying close attention to bond rating companies, choosing high-rated bonds or purchasing exchange-traded debt in order to reduce the risk.
Based in San Francisco, Tipping Point Community serves the entire Bay Area as a fundraising and grant-awarding nonprofit organization dedicated to fighting the effects of poverty. Tipping Point carefully selects its grantees from among those most effective in offering services related to housing, education, vocational training, medical care, and youth services. Among Tipping Point’s grantees working to help individuals in their quest to obtain jobs is Opportunity Junction, based in Contra Costa County in the East Bay.
Focusing on assisting participants interested in developing office and administrative skills, Opportunity Junction worked with more than 800 clients in 2012. And Opportunity Junction doesn’t stop at traditional job training: The organization understands that individuals with low incomes also need the chance to nurture their self-confidence and self-esteem if they are to succeed in the workplace over the long term.
Through providing mental health services and counseling and facilitating access to medical and childcare services, Opportunity Junction offers a much-needed basis of social support to its clients.
Opportunity Junction offers a full three months of training to assist clients in gaining literacy skills and developing familiarity with 21st-century office technology. The organization funds four months of compensated experience in a selected workplace and follows through with an additional year and a half of support services after the program ends.
Thanks to Tipping Point’s ability to offer a wide variety of professional and in-kind services to its grantees, the staff at Operation Junction has been able to access infrastructure-building workshops focused on fundraising and media strategies. Working with the philosophy that everyone deserves the chance to become self-sufficient, Opportunity Junction offers a variety of ways for volunteers and donors to make a contribution that could change someone else’s life for the better.
Established in 2005, Tipping Point Community has already assisted more than a quarter of a million people living in the San Francisco Bay Area, with board members like Pete Briger ensuring that 100 percent of donations go to those in need by underwriting the charity’s operating costs. As of March of 2014, Tipping Point has redoubled its fundraising efforts with the inception of SF Gives. A poverty-fighting fund uniting many of the Bay’s biggest businesses, SF Gives will support the work of the region’s most diligent and efficient nonprofit organizations.
SF Gives began with Salesforce.com CEO Marc Benioff, who partnered his company’s Salesforce.com Foundation with Tipping Point Community to invite other Bay Area companies to donate $500,000 toward a new fund targeting initiatives that break the poverty cycle. With companies ranging from Jawbone and Zynga to LinkedIn and Google, the coalition making up SF Gives is well on its way toward its $10 million goal. Thanks to the innovative underwriting strategy of Tipping Point, every dollar will go on to assist those in need with access to health care, jobs, education, and housing.
Since its founding in 2005, San Francisco-based Tipping Point Community has contributed in excess of $60 million to assist in providing human services to a quarter million Bay Area residents in need. Tipping Point works with the goal of eradicating poverty through providing grant-funded support to selected partner nonprofits that have achieved practical results in delivering housing, educational, and employment services to clients.
Tipping Point founder and CEO Daniel Lurie saw the need to form a different kind of nonprofit, based on his service to a New York-based poverty-fighting organization called the Robin Hood Foundation. Inspired by that group’s success in lifting up a devastated city after September 11, 2001, Lurie returned to the Bay Area with the goal of fitting that model to his own community. Named for popular non-fiction author Malcolm Gladwell’s groundbreaking insights into the impact of a small group of committed individuals on society, Tipping Point aims to offer donors the most tangible return on their investments of time, money, and dedication.
Recognizing that many organizations operate with sincere intentions, but that fewer possess the infrastructure of leadership, fiscal sustainability, and workable strategic plans necessary to achieve real-world change, Tipping Point subjects each potential partner to a rigorous vetting process. Out of approximately 100 applications during its 2012-2013 fund-raising year, Tipping Point elected to add only six to its portfolio.
Thanks to the passion and dedication of its board members, who supply the total funding needed to conduct Tipping Point operations and fund-raising campaigns, every dollar raised goes to assist partner organizations and their clients. In its most recent annual report, the organization cited the nearly $14 million it raised, thanks to more than 1,000 new and continuing supporters.
Fortress Investment Group, LLC, and its staff support a wide range of charitable organizations, in the United States and abroad, through employee donations and matching corporate contributions. One of the many non-profits that have received Fortress staff contributions is The Doe Fund. Based in Manhattan, the organization strives to make a difference in the lives of individuals suffering from homelessness through providing job training, education, housing assistance, and supportive transitional services.
Currently, the Doe Fund’s main area of focus is its Ready, Willing & Able program, which is based on the central idea that participation in the workforce leads to positive and permanent life changes. Each day, Doe Fund facilities offer assistance to hundreds of people coping with homelessness and the effects of past incarceration. Each receives compensated work within a Doe Fund social services program, along with vocational training in areas such as professional driving, culinary arts, security services, pest control, and building maintenance. The Doe Fund assists its clients in making the leap into the broader workforce with employment placement and counseling.
The organization additionally offers access to high school diploma equivalency courses, computer instruction, and classes for adults hoping to gain literacy skills, while providing the security of regular room and board. If needed, the program also connects participants with social services that help them stay sober. After graduation from the program, each individual who transitions to outside employment receives five monthly payments of $200.
Successful participants in Ready, Willing & Able have noted the program’s ability to restore their sense of dignity and self-esteem by guiding them back into the world of work. One man, now drug-free and studying toward his associate degree, described the difference The Doe Fund offered: Unlike other programs, it did not describe what it could do for him. Instead, it helped him see what he could do for himself.
The San Francisco Bay Area is home to some 15,000 nonprofit social service organizations, all operating with the best of intentions, but some demonstrating greater results than others in fighting poverty. Tipping Point Community, in operation since 2005, provides unrestricted funding to carefully selected local organizations that have shown the greatest potential to make positive changes in their clients’ daily lives. Tipping Point focuses on supporting human service providers that make the biggest impact on the educational, job skills training, and housing needs of communities in poverty.
In its last fiscal year, Tipping Point received queries from some 100 organizations hoping to become grantees. Tipping Point subjected each application to its standard rigorous evaluation process to determine financial stability and sustainability, staff and board leadership potential, and history of effectiveness. After 116 hours of basic screening, 140 hours of initial assessments, on-site visits totaling 252 hours, and more than 500 hours of additional due diligence, Tipping Point selected six new nonprofits as partner grantees.
Tipping Point identifies potential new partners through research, referrals, and online contacts. If an organization meets the preliminary criteria, the next phases involve submission of an introduction form and a first visit to the potential partner’s facilities. For those few groups that emerge from this process, Tipping Point conducts further due diligence that encompasses face-to-face conversations with key staff, a financial review, and an analysis of long-term strategies and impact.
The final step in the new-partner acquisition process consists of a Tipping Point board vote at a quarterly meeting, with approved groups invited to become part of the Tipping Point portfolio.
Widely considered one of the foremost nonprofit organizations combating poverty in and around the San Francisco Bay Area, Tipping Point Community traces its origins to the successful grant-making model pioneered by the Robin Hood Foundation in New York City. Founded by former Robin Hood employee Daniel Lurie, Tipping Point opened its doors in 2005 in order to offer grassroots assistance to individuals dealing with unemployment, homelessness, illness, and other issues that arise from chronic poverty.
As a grant-making entity, Tipping Point leverages the participation of individual donors and the power of corporate partners to fund nonprofit organizations that address poverty throughout the Bay Area. Numerous local nonprofits have received Tipping Point grants that provide many of the area’s most marginalized residents with the tools they need to thrive and build a better future for themselves and their families. Notable recipients of Tipping Point funding include Compass Family Services, Aspire Public Schools, JobTrain, and the Center for Youth Wellness.
In 2002, Pete Briger left Goldman, Sachs & Co. after 15 years - including six as a partner - to join Fortress Investment Group. Pete Briger immediately took a position on the company’s management committee. He has since taken on additional leadership roles. Peter Briger presently serves as both a Fortress principal and co-chairman of the board of directors.
On October 31, Fortress released its results for the third quarter of 2013. The company reported distributable earnings of 64 cents per share for the first three quarters of 2013, doubling the company’s earnings for the first three quarters of 2012. Fortress’ total assets under management reached a record high of $58 billion in the quarter. The quarter also marked the eighth in a row during which the company received new commitments in its alternative investment strategies totaling more than $1 billion.
Investment returns across Fortress’ businesses were strong for the first three quarters of 2013. In the Credit business headed by Mr. Briger, the company’s flagship Credit hedge fund, Drawbridge Special Opportunities, delivered net returns of approximately 14% through September. In the Liquid Markets business, the Fortress Macro Funds and Fortress Asia Macro Funds recorded net returns of approximately 10% and 12%, respectively, through September. And the firm’s main Private Equity funds recorded valuation gains of approximately 17% year-to-date through September.
Outside of his work as principal and co-chairman of Fortress Investment Group’s board of directors, Pete Briger gives back to the San Francisco community by serving on the board of Tipping Point Community. Along with the rest of Tipping Point’s board, Pete Briger underwrites the charity’s costs so that every cent it receives goes straight to fighting poverty. Peter Briger joins several other financial executives in doing so.
Tipping Point got its start when founder Daniel Lurie moved to San Francisco after working on political campaigns and community support on the East Coast. While working with New York City’s Robin Hood Foundation during the aftermath of the September 11, 2001, terrorist attacks, Laurie noted the group’s ability to unite donors and victims of the attacks in a way that provided hope to the city.
In San Francisco, he turned that mindset to tackling poverty in the Bay Area. Tipping Point has adapted the Robin Hood model to bring donor funds to the nonprofits in the area doing the most effective work. Over the eight years since Laurie founded it, Tipping Point has expanded its donor base significantly, supported over 160,000 people, and raised over $50 million.