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Year-end Planning

High-net-worth charitable donors can use a smart tool to support non-profit innovation this giving season. It’s called a recoverable grant.
The minimum donation size for these grants tends to start around $25,000, well within reach for many high-net-worth philanthropists.
But donors and their advisors who consider recoverable grants should ensure that at least three key conditions are in place.

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Anyone watching the markets this year knows that it’s been a bumpy ride.
But investors and the corporate sector aren’t the only ones feeling the pinch as financial markets have fallen sharply. With an estimated 33% of all charitable giving taking place in November and December, non-profit organizations will also be hit by a pullback just as economic uncertainties are increasing demand for their services.

In times of market turmoil, small-dollar contributions tend to remain constant while major charitable gifts decline as wealthy donors feel the effects of a lower-return environment on their portfolios. Still, many high-net-worth donors remain committed to their high-impact philanthropy. For advisors counseling clients like these, there is a smart tool they can use to support non-profit innovation. It’s called a recoverable grant.

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Here’s a look at more coverage on what to do finance-wise as the end of the year approaches:

A recoverable grant is just what it sounds like — a giving strategy that allows for charitable capital to be “recovered,” typically to a charitable vehicle such as a foundation or donor-advised fund, if the non-profit organization achieves its agreed-upon objectives. This return of capital option enables donors to potentially multiply their charitable impact over many years by reusing the same funds for future grantmaking. It is, quite literally, a gift that has the potential to keep on giving.
The minimum donation size for these grants tends to start around $25,000, well within reach for many high-net-worth philanthropists, although it can run higher depending on the nonprofit recipient and the nature of the project being funded.
These minimums are in place to ensure that the donation is large enough to account for the effort required by the nonprofit to administer, track and report on the grant. There is also typically a one-time fixed fee required at the time the grant is made.

Since recoverable grants are allocated through charitable entities, there are no specific tax implications of the structure and format. Donors can simply take their charitable deduction, if applicable, when the initial gift is made to the charitable entity.

Recoverable grants are ideal in specific circumstances. They are well suited for making “catalytic,” or seed capital grants that allow nonprofits to stretch beyond the direct services these organizations provide day-to-day. Recoverable grants support getting innovative, novel solutions to entrenched problems off the ground, scaling up successful programs, or helping solve acute and temporary funding gaps.

3 considerations if you’re feeling charitable

Donors and their advisors who consider recoverable grants should ensure that at least three key conditions are in place:

There is a clear use case for the funds. Much like a restricted grant, which can only be spent for the purpose designated by the donor, recoverable grant funds have specific use cases. These funds are typically used to fund specific revenue-generating programs or to fill a short-term gap between when a nonprofit might need to provide services and when funding arrives. For example, if a nonprofit is working to build health centers in underserved areas, the organization could raise funds from donors via a recoverable grant instead of taking on debt financing to fund the building.
There is a well-documented timeline and milestones for expected repayment. Nonprofits have the option to set expected repayment guidelines. They can be as short as a few months for short-term microloans or as long as a decade for an investment in a new climate change mitigation technology. The nonprofit can also choose how the repayments are handled. They may choose to repay only a portion of the overall funds, installments over a longer period of time; all the funds at once at the end of the project, or all the funds plus a small additional return premium.Back to the health center example. If the nonprofit anticipates two years to build the facility plus an additional two years for the center to become profitable, the organization may not begin to repay the recoverable grant for four to five years. If the project timeline gets extended, the timeline for potential grant repayment may be extended as well.
There is appropriate infrastructure in place to track and report on the recoverable grant. Recoverable grants are not appropriate for all nonprofits or all types of projects. The organization will need to track how the funds are allocated, the success (or failure) of the project, and report out on progress on a regular basis. The nonprofit will also need to have a well-defined revenue stream to potentially repay the grant — be that revenues from services or, when filling a short-term funding gap, secured pledges for donations that are expected to arrive at a later date.

While recoverable grants provide nonprofits with critical access to capital to scale and innovate, it’s important for donors to remember that these are grants, not investments. So, if the nonprofit doesn’t hit its goals and chooses not to return any of the funds allocated through a recoverable grant, the money converts to a traditional grant. There is no recourse for the donor to recover the funds for additional charitable use if the project doesn’t deliver its objectives.
End-of-year giving conversations are going to be challenging this year. But financial advisors who serve philanthropic families have an overlooked tool at their disposal. Recoverable grants help keep the focus on high-impact philanthropy that drives systemic, long-lasting change. That’s something we can all celebrate this giving season.
— Liz Sessler, chief operating officer of impact investing firm Capshift More

The last few years have seen huge swathes of companies make net-zero commitments and other sustainability-related goals.
While such commitments draw attention, actually achieving them is a huge task with significant financial and logistical hurdles.
“Without regulation, everybody is doing their own thing and it’s quite a wild, wild west out there,” Tuuli-Anna Tiuttu, the CEO of SDG Monitor, tells CNBC.

The last few years have seen huge swathes of companies make net-zero commitments and other sustainability-related goals.
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Companies need regulation and greater accountability to ensure they’re meeting goals related to sustainability, according to the CEO of SDG Monitor, a firm focused on measuring performance in that area.
Speaking during CNBC’s Sustainable Future Forum on Friday, Tuuli-Anna Tiuttu argued that CEOs and management needed to be “accountable” when it came to the sustainability goals they’d set.

Their long-term goals also needed to be broken down into “short-term actions” that were “more concrete and realistic to do and achieve,” she added.
The last few years have seen huge swathes of companies make net-zero commitments and other sustainability-related goals.
While such commitments draw attention, actually achieving them is a huge task with significant financial and logistical hurdles. The devil is in the detail and goals can often be light on the latter.
While many big firms are now posting details of their emissions and progression on goals, establishing a uniform set of criteria that all can adhere to and measure their efforts against represents a significant challenge.

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During her conversation with CNBC, SDG Monitor’s Tiuttu was asked what specific kind of regulation was required to galvanize opinion and get businesses and industries moving.

Her response addressed the wider picture facing corporations.
“Absolutely … regulation is needed, that is what I think,” she said. “Because we don’t know how the companies are doing currently in their sustainability agendas,” she told CNBC’s Steve Sedgwick.
“Are they on track? Are they … behind? Maybe they’re ahead [in moving] towards their targets? That is something that we don’t know because without regulation, everybody is doing their own thing and it’s quite a wild, wild west out there.”

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This, Tiuttu said, created “a lot of cherry-picking, maybe greenwashing as well, because … they are not necessarily showing the performance and their data in a similar format that is recognizable.”
Greenwashing is a term that environmental organization Greenpeace UK calls a “PR tactic” used “to make a company or product appear environmentally friendly without meaningfully reducing its environmental impact.”
The debate surrounding it is becoming increasingly fierce, the charge often being leveled at multinational companies with vast resources and significant carbon footprints.
Expanding on her points, Tiuttu said regulation was required because “we need [these] … common shared practices, and we need data that is collected and calculated in a similar way from one year to the next.”
This would build up databases that would in turn start to show trends in performance, she explained. “And all of this is possible for the businesses to do.” More

While the city’s pandemic regulations remain strict, Chris Brooke, chairman of the Hong Kong Rugby Union, claimed demand to attend the event remains high.
“Those restrictions are there but I don’t think it takes away from the key ingredients of the Sevens —which is great rugby, entertainment and a fun weekend,” Brooke said.
Instead of the usual 24 teams, only 16 teams will be competing at the Hong Kong Rugby Sevens this year. There will also be no women’s tournament this time around.

The Hong Kong Rugby Sevens tournament kicks off Friday for the first time since Covid-19 hit.
While the city’s pandemic regulations remain strict, Chris Brooke, chairman of the Hong Kong Rugby Union, claimed demand to attend the event remains high.

“I think people are looking forward to a fun weekend. Those restrictions are there but I don’t think it takes away from the key ingredients of the Sevens — which is great rugby, entertainment and a fun weekend,” Brooke said. 
The tournament will be held at the 40,000-seat Hong Kong Stadium, but the government has capped seats at 85% capacity, allowing only up to 34,000 spectators each day. Brooke said about 26,500 tickets have been sold and a majority of attendees are likely to be Hong Kong residents.
Before the pandemic, the three day sporting event could easily draw a total of 120,000 spectators. In 2019, overseas visitors accounted for half of attendees and the tournament contributed approximately 400 million Hong Kong dollars ($50 million) to the city’s economy, according to Reuters.
Instead of the usual 24 teams, only 16 teams will be competing at the Hong Kong Rugby Sevens this year. There will also be no women’s tournament this time around.
The Fiji team has won the tournament five times in a row and will play their first match against Japan on Friday.

The rules

Despite regional neighbors abandoning most of their Covid-19 measures, many of Hong Kong’s pandemic rules remain in place.
At the tournament, spectators will be seated in groups of 12 and will have to keep their face masks on at all times when they are not consuming food or drinks, according to the Hong Kong Sevens website. 

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In accordance with government’s rules, attendees are required to present their Leave Home Safe Vaccine Pass and a photo of a rapid antigen test with their name and date, the site said. 
Players are also subject to Covid regulations and must stay within a quarantine bubble, similar to how athletes were kept safe during the Winter Olympics in Beijing earlier this year. 
“They’re very positive about being here … They’re very happy to go through that process to make sure they can get on the pitch,” said Brooke. 
Navigating the rules has been difficult for the Hong Kong Rugby Union, which relies on the Rugby Sevens for most of its revenue. 
Brooke said the organization had to significantly cut spending over the last two years and slashed headcount by 50%. 
“We’ve always been aware of the reliance on the Sevens and we’ve always been trying to reduce that pre-Covid as well … We recognize that we need to look at alternative revenue streams,” Brooke said.
“It is quite challenging, but I think the focus going forward will be to ensure that we’ve got a good balance between the Sevens income and other revenue sources,” he added. 
Still, Brooke is optimistic that the rugby union is moving in the right direction and is hoping for a good mix of local and international spectators in 2023. 
“It’d be great if we can get these major events going over the next three to four months because I think it really helps the local community and obviously helps [Hong Kong’s] status as an international hub.” 

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Club holding Starbucks (SBUX) reported strong fiscal fourth-quarter results after the closing bell Thursday, giving us confidence that demand can endure the softness in the global economy and China’s continued adherence to its zero-Covid policy. Revenue advanced to a quarterly record of $8.4 billion, exceeding expectations of $8.31 billion. Adjusted earnings-per-share came in at 81 cents, outpacing the 72-cent consensus. The stock rose more than 2% in after-hours trading as management reaffirmed their long-term guidance provided in September, which members will recall surprised the investors because of how strong it was. Bottom Line While China’s rolling Covid lockdowns and restrictions remain a headwind, management’s confidence in the long-term outlook for the region was unwavering, with the team commenting on the post-earnings call that their “aspirations for our business in China has never been greater.” The company opened its 6,000 th China location in September and continues to target 9,000 location in China by 2025. Taken as a whole, we see no change in our investment thesis. Management’s store reinvention plan is working and Starbucks is in a position to deliver strong topline results with enhanced profitability in fiscal year 2023, as China hopefully reopens more fully, currency headwinds abate, and investments in growth are harvested in the back half of the year. When asked on the call how management can be so confident in the face of so much uncertainty, they highlighted the company’s highly successful loyalty program, increased customization in drink orders that results in a higher ticket price, and the pricing power they’ve demonstrated over the past year. However, they did acknowledge that now is not the time raise prices further. One factor we found particularly intriguing was talk on the call about customer demographics. The team said their customers are skewing younger and that “young customer, that Gen Z customer, tends to have significantly more discretionary money at their disposal. And their loyalty to Starbucks has been quite significant and predictable.” Companywide Results Same store sales or comps, a key performance metric in retail that removes the effects of currency fluctuations and normalizes for store openings and closings, rose 7% globally in fiscal Q4, on the back of an 11% advance in the U.S. Estimates were for 4% global growth and 8% in the U.S. Internationally, excluding China, saw a double-digit percentage increase. However, international declined 5% when including China, but that was not as bad as estimates for a 7% decline. China sales dropped 16%. Starbucks ended the quarter with 763 net new stores — totaling 35,711 locations globally, 51% of which are company-operated with the remaining 49% as licensed locations. Breaking that down a step further, 61% of all Starbucks stores are in the U.S., with 15,878 locations, and China, with 6,021. Additionally, 90-day active membership of the U.S. Starbucks Rewards loyalty program jumped 16% annually to 28.7 million. Segment Results Starbucks breaks out financials into three key segments: North America, International and Channel Development, where results for at-home and ready-to-drink beverages sold outside of the stores are recorded. Growth rates below are on an annual basis and normalized for a 13 th week in the year ago period. North America sales in Q4 advanced 15% to $6.13 billion, ahead of the $5.93 billion the Street was looking for. Driving the 11% same-store-sales increase noted above was a 10% increase in average ticket prices and a 1% increase in transaction volumes. North America operating income declined to $1.14 billion as the profit margin contracted to 18.6% from 21.8% in the year ago period due to investments in growth as well as increased labor, commodity and supply chain costs. However, the result came in above expectations of $1.05 billion International sales declined 1% to $1.78 billion, missing expectations of $1.88 billion. The decline is attributable to an 11% foreign exchange headwind, the effects of an extra week in the year ago quarter, and ongoing Covid restrictions in China. International operating income fell to $217.6 million, but exceeded expectations of $177 million. The Q4 operating profit margin contracted to 12.2% from 19.7% in the year ago period due largely to China store closures. Channel Development sales grew 16% to $483.7 million, ahead of the $478 million and driven by the Global Coffee Alliance with Nestle and global ready-to-drink business. Channel Development operating income of $244.7 million was better than the $231 million the Street was looking to as the operating margin expanded to 50.6% from 50.1% in the year ago period due primarily to a favorable mix shift. Guidance No surprises here, as we mentioned earlier, with management reaffirming the full-year fiscal 2023 guidance provided at the company’s Investor Day in September. Management is targeting 7% to 9% same store sales growth in the U.S. versus a 7% consensus estimate — so a beat at the midpoint. In China, while the first fiscal quarter is expected to be negative, management expects outsized same store sales in subsequent quarters as the 2022 lockdowns are lapped. Adding it all up, management sees global comps in fiscal 2023 coming at the high-end of their 7% to 9% range, in line with expectations for 8.8% global comps. Nearer-term fiscal first quarter (current quarter) global comps are expected to come in “at the low end of the annual guidance range” — so closer to 7% — before expanding in subsequent quarters. That’s basically in line with the 6.9% the Street was looking for. Looking at store growth, management sees its U.S. footprint expanding 3% in fiscal 2023, while Chinese locations are expected to grow by about 13%, resulting in a global store growth of about 7%, with over three-quarters of that growth coming from outside the U.S. Along with Channel Development initiatives, the combination of same store sales growth and an expanded global footprint in fiscal 2023 is expected to result in 10% to 12% total sales growth despite expectations for a roughly 3% currency headwind, about in line with what the Street was looking for. As for profitability, management expects global operating margin expansion on a full year 2023 basis, though noted that most of the expansion will occur in the back half of the year as they harvest the benefits of their store reinvention plan and China recovers. Finally, fiscal 2023 adjusted earnings growth is expected to be at the low end of the 15% to 20% long-term range, in line analyst expectations for 15% earnings growth in 2023. Capital allocation Regarding capital allocation, management anticipates fiscal 2023 capital expenditures of about $2.5 billion, above the $2 billion the Street was expecting and reiterated their intention to return roughly $20 billion to shareholders in the next three years between dividends and share buybacks. Management added on the call, “We remain committed to targeting an approximately 50% dividend payout ratio as reflected in the recently announced dividend increase and will also resume our buyback program in fiscal 2023.” On that note, the Board of Directors declared a cash dividend of 53 cents per share, payable on Nov. 25 to shareholders of record as of Nov. 11. (Jim Cramer’s Charitable Trust is long SBUX. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

A Starbucks store is seen inside the Tom Bradley terminal at LAX airport in Los Angeles, California.
Lucy Nicholson | Reuters

Club holding Starbucks (SBUX) reported strong fiscal fourth-quarter results after the closing bell Thursday, giving us confidence that demand can endure the softness in the global economy and China’s continued adherence to its zero-Covid policy. More

Monday – Friday, 6:00 – 7:00 PM ET

It’s that time again! “Mad Money” host Jim Cramer rings the lightning round bell, which means he’s giving his answers to callers’ stock questions at rapid speed.

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Nvidia Corp: “I know it’s overvalued right now. … I think a year from now, the stock’s going to be higher, and I’m sticking with Nvidia.”

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GoPro Inc: “I said sell that stock. … $95, never looked back.”

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Home Depot Inc: “I think that the Fed is directly targeting renovation and building of homes. … But you have to stay the course.”

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Lucid Group Inc: “Lucid is losing a huge amount of money. I don’t recommend stocks that are losing money.”

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SoFi Technologies Inc: “I’m willing to back [CEO Anthony Noto] right here, right now.”
Disclaimer: Cramer’s Charitable Trust owns shares of Nvidia.

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The naturally occurring psychedelic compound psilocybin can significantly reduce symptoms of depression, according to data from the largest trial of its type ever conducted.
The research found the compound to be effective against hard-to-treat depression and larger trials will now take place.

The naturally occurring psychedelic compound psilocybin can significantly reduce symptoms of depression, according to data from the largest trial of its type ever conducted.
David Buzzard – media-centre.ca / Getty Images

LONDON — The naturally occurring psychedelic compound psilocybin can significantly reduce symptoms of depression, according to data from the largest trial of its type ever conducted.
Psilocybin was given to 233 patients who had already tried at least two antidepressants in the past with little success, suggesting the compound could have huge benefits for those suffering with hard-to-treat depression.

After receiving the psilocybin, patients entered a “walking dream-like” state for between four and six hours and then left the clinic once they had returned to their normal state.
The trial found that a 25mg dose of psilocybin, given alongside psychological support, triggered a reduction in levels of depression three weeks after treatment.

The study, published Thursday in the New England Journal of Medicine, was carried out internationally by London-based COMPASS Pathways.
Around 100 million people worldwide suffer with depression that is resistant to treatment, and so the findings of the study are a step in the right direction, according to James Rucker, consultant psychiatrist and senior clinical lecturer at King’s College London, who was involved in the study.
“Our task now is to investigate psilocybin for treatment-resistant depression in larger trials with more participants, comparing it both to placebo and to established treatments,” Rucker said, according to a King’s College London press release. 

The drugs were trialed in doses of 1mg, 10mg and 25mg and adverse effects recorded across all groups included headaches, nausea and thoughts around suicide.
There was not, however, an equal number of “severely depressed” participants in each dosage group, according to Ravi Das, an associate professor at the University College London Institute of Mental Health, which “does not appear to be acknowledged in the paper,” as reported by Reuters.
Critics have also expressed concern that this could lead to a rise in usage of magic mushrooms in non-pharmaceutical settings.

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Jeff Bezos is interested in bidding for the NFL’s Washington Commanders, reports say.
Bezos may pursue a bid with Jay-Z, Bloomberg and The Washington Post reported.
Washington owner Dan Snyder hired Bank of America to explore a possible sale.

Amazon founder Jeff Bezos and commissioner Roger Goodell on the sidelines before the start of an NFL football game between the Los Angeles Chargers and Kansas City Chiefs, Thursday, Sep.15, 2022, in Kansas City, Mo.
Logan Bowles | AP

Jeff Bezos is interested in bidding for the NFL’s Washington Commanders, multiple news outlets reported Thursday.
The Amazon founder and multibillionaire has expressed interest in purchasing the team, possibly in collaboration with rapper and music industry giant Jay-Z, The Washington Post and Bloomberg reported Thursday, each citing a single source. The Washington Post is owned by Jeff Bezos. People reported Bezos’ interest earlier Thursday.

The reports came a day after current owner Dan Snyder hired Bank of America to explore a sale of the team. Snyder has faced mounting pressure to sell the team. He’s currently the subject of House Oversight Committee and NFL investigations into allegations of sexual harassment and financial misconduct.

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Monday – Friday, 6:00 – 7:00 PM ET

CNBC’s Jim Cramer on Thursday advised investors on where to look for stocks that can withstand a potential economic downturn.
“The Dow components all know how to handle a recession,” he said.

CNBC’s Jim Cramer on Thursday advised investors on where to look for stocks that can withstand a potential economic downturn.
“The Dow Jones Industrial Average is filled with relatively cheap stocks because traders assume these 30 old-line companies are the most vulnerable to a recession. But that’s not true: That’s wrong. The Dow components all know how to handle a recession,” he said.

Dow stocks that Cramer has touted as recession-resilient names in recent weeks include Johnson & Johnson and Procter & Gamble. 
The Federal Reserve indicated that it doesn’t plan to stop raising interest rates anytime soon after its meeting on Wednesday, which has rocked the markets and increased Wall Street’s fears of a potential recession.
Stocks fell on Thursday for a fourth consecutive trading session, with the Dow falling the least of the major indexes, by percentage. The blue chip index slipped 0.46% while the S&P 500 and Nasdaq Composite lost 1.06% and 1.73%, respectively.
Cramer also reiterated his advice to sell volatile tech stocks in favor of financial, oil and health care names. Those stocks “can go up without causing inflation because they’re more conservative,” he said.
Disclaimer: Cramer’s Charitable Trust owns shares of Johnson & Johnson and Procter & Gamble.

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