I read this in BusinessWeek, and it speaks for itself. What a cool guy! (I like that BusinessWeek has a philanthropy section.) I couldn't find a website for Mr. Granoff's foundation, nor could I locate any online photos of him, but here is contact info from a scholarship portal:
Leon L. Granoff Foundation Contact: P.O. Box 2148, Gardena, CA 90247-0148 Eligibility: CA undergraduate residents attending CA colleges and universities. Award: $2,500
PHILANTHROPY Here's The Deal: I Give You $20,000. You Buy Stocks
Leon L. Granoff, a 94-year-old real estate investor in Gardena, Calif., is offering individuals the opportunity to invest $20,000 of his money in an account on e*Trade (ETFC )—and receive 50% of the profits. The rest of the earnings go to the 35-year-old Leon L. Granoff Scholarship Foundation, which gives away close to $1 million a year.
Granoff started the program in February by e-mailing his scholarship students, who spread the word to their friends across the country.
By now, 78 "carrier pigeons," as he calls them, mostly undergraduates with no previous investing experience, manage $1.04 million of his capital. (They are responsible for paying the tax on the profits they keep.) BusinessWeek's Courtney Weaver spoke to Granoff about the unusual scheme.
With the turmoil in the markets, how do you expect neophytes to make a dime trading stocks?
The same way that [people] have been making money for the past 300 years. The market continually goes up and down. That's one reason for the requirement that at the end of a quarter they have investments in 24 different stocks. On average, the stocks will go up. Not all of them will, but some of them.
If virtually all the stock goes down—well, then, I'll take a loss on it. But I'm not worrying. If I were, I wouldn't get involved in it.
Why did you decide to make this offer?
Those kids, they're making money for my foundation without me doing a damn thing. [Financial] education is a secondary goal.
How many of the 78 carrier pigeons now in the program have started generating profits?
At the end of March—the end of the first quarter—the first pigeon had made $200. At the end of the second quarter, one had made $700 and another $800. I'm confident that in the not too distant future, they will be making thousands.
As a real estate pro, how do you assess the housing market?
Many people have been seduced by unscrupulous brokers providing them with ARM loans. It's a question of allowing enough for the problem to to work its way out. It will. I'm confident of that.