Thursday, May 5, 2011

Latest Institution To Discover Gold Investing: An Ontario Charity (Updated)

Lest you think that the University of Texas' endowment fund is a lone outlier, consider the fact that an Ontario senior's charity is stockpiling gold too. The Ontario Society (Coalition) of Senior Citizens’ Organizations, as you might expect, is under fire for buying the gold as well as for high administrative expenses:
“I have never heard of a non-profit having gold bars stored in some unknown location,” said board co-vice chair Arlene Patterson. “We do not receive a balance sheet showing the assets of the organization. It’s bizarre.”

Saying its mission is to “improve the quality of life for Ontario’s seniors,” the society collects about $500,000 each year, from break-open lottery ticket proceeds as well as provincial and federal grants. However, about 60 per cent of that goes to pay salaries, consultants and administrative costs....

Roughly half of the charity’s assets are invested gold, totalling at least $208,000, according to 2009 investment documents.

This story's an odd one. On the face of it, the charity's a left-wing lobby group that's providing a nice living to its board of directors. The oddity comes from the stockpiled gold. What makes this story even odder is the fact that the charity's likely sitting on a large non-profit's profit as a result of it buying the metal.

Update: Sure enough, the Ontario government is investigating the charity. Although the Ontario Alcohol and Gaming Commission is downplaying the investigation as routine, the Star reports that what got them moving in was the story of the stockpiled gold.

This advocacy charity isn't really a group of heroes, as the high expense ratio clearly indicates, but it being jumped on because its head stockpiled gold [at a profit] says something about the mindset of gold skeptics.

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