Attacking BS About Money Wherever It is Found

-The College Honor Society Edition

A Word About Pay-to-Play in Business

Some would-be clients of trusted advisors (e.g. accountants, attorneys, financial advisors) don’t realize that many of the articles written by such people, many of the professional awards they receive, and many of the conference panels they speak on are not the result of merit. Many, instead, happen because the advisor or her firm paid the publisher, award benefactor, or conference producer. In other words, while many of these things are merit-based, many are not.

This is the world of “pay-to-play” in the context of PR and marketing- a cottage industry of .  publishers, conference organizers, webinar producers, and other organizations offering some sort of award in exchange for cash. Just as real men don't eat quiche (if you don’t get the reference check out the book by Bruce Feirstein), real thought leaders worth hiring to provide you or your business important advice do not do pay-to-play.

Some customers (i.e. professional you may be thinking of hiring to advise and perform important work for you or your business) of pay-to-play services find themselves as such through no fault of their own; sometimes well-meaning (or, in some cases, perhaps na?ve or lazy) business development people in their firms push them in that direction. 

Other pay-to-play customers make the judgment that purveyors of pay-to-play are ok because the opportunities they provide mimic closely enough opportunities that cannot be bought but must be earned (if you don’t know the difference between earned and paid media, you probably should look it up).

Start Kids Early & They’ll Keep Craving It

Every kid gets a trophy! There’s a lot of literature about the topic of “participation trophies” and how they maybe helped to create a self-entitled generation. This is a younger manifestation of pay-to-play, even if this was not the intention. An intermediate version happens in college- in the form of the honor society that is easy to get into.

I get it. Everyone wants to feel special, to be recognized. And people need fodder for their resumes. There are some ostensible “honors,” however, which, if you peel the thinly applied topcoat off just a sliver, you will see are not so honorable at all.

The Golden Key Honor Society

I received an offer to join the Golden Key Honour Society (notice the use of the British spelling to sound extra fancy) when I was in college. I did a little research and quickly declined. The fee was not very much, in fact it was just low enough that a reasonable person might have just thought, “why not, it can’t hurt.” My thinking was a little different and was Marxist (the Groucho kind) in nature: I didn’t want to belong to any club that would have me as a member. In other words, and to state it more clearly, I don’t think that having a GPA in the top 15%, and requiring no other criteria, should admit anyone to an honor (sorry- honour) society. I’m pretty sure almost everyone in my dorm got the same invitation…

I’m not saying that Golden Key is illegitimate (but others sure seem to suggest so- see this Wikipedia Discussion Forum among Wikipedia contributors and this Washington Post article).

What I am saying that whenever I see this listed on a job applicant’s resume, it is a negative in my mind. So, yeah, there is something to lose by joining an organization willy-nilly. It may say something about one’s judgment. And, keep in mind the expression, “you are judged by the company you keep.”

Sigma Alpha Pi- Join & Be a SAP

Another example is Sigma Alpha Pi, the “The National Society of Leadership and Success.” Yuck.

According to USA Today, “[m]ost professional honor societies are certified by the Association of Collegiate Honor Societies, an organization founded in 1925 to preserve the integrity of honor societies from less reputable organizations. The ACHS evaluates an honor society's scholastic criteria -- like grade point average, campus chapters and governance -- for potential red flags.”

Sigma Alpha Pi is not a member of the Association of Collegiate Honor Societies

According to its website, SAP is also not a not-for-profit. To be clear, it is a for-profit business- unlike every other legitimate academic honor society I’ve ever heard of:

The question is asked if we are a non-profit organization? The national organization is not, however, the society operates like a non-profit. Meaning we have a one time fee at the time of joining. We conduct fund raisers for the society. Again the meaning, the society promotes organizational sustainability; since it is self-governed it is possible to control funding and give to chapters in need with grant assistance program. There is no reliance on government funding or donations that are difficult to secure in tough economic times.

Leaving aside that the quoted text is riddled with grammatical errors (which is irony at its best), the explanation makes no sense. Stating it more clearly, it clear and utter bullshit. So, who would the explanation make sense to? I know, anyone who makes the decision to join. “SAP,” indeed, is a fitting acronym for any member.

Here’s an alternative explanation why an organization like SAP might not want to be a not-for-profit: greater oversight. Not-for-profits’ tax returns are public, and Golden Key received a black eye when a student newspaper reported many years ago that "Golden Key spent just $289,461 on scholarships, less than 5 per cent of their total expenditures for the fiscal year ending June 30, 1997."

I looked at the latest tax return I could find online (here it is) and in 2016, Golden Key’s revenue was about $6.8 million, it gave grants of about $550,000, and it paid its staff about $2.2 million. You do the math.

There oughta be a law. Actually, there are laws and I wonder if any are being broken? (if you think the word “oughta” is a typo then you may not know about the famous comic strip). 

Transition

Here’s where I try to deftly transition the article a bit. Sorry I couldn’t think of a better subtitle. 

The broader point is that there will always be someone trying to sell you BS to help you achieve some goal faster and more easily than it really will take. From fake cures to fad diets and from fake honors to unrealistic investment returns, nothing replaces hard work and drive.

Who to Trust?

If you do an internet search on the topic, you'll be overloaded with resources written by people hoping you will invest with them or turn to them for investment advice. 

How can you know if you can trust someone to advise you (whether the need is on the investment front, involving a legal issue, or about some other important subject)?

Is the person really an expert? Is the person honest? Does the person have a hidden agenda? Did the person have to pay to have her or his article published, or voice broadcasted? Read more about the evils of pay-to-play here.

The point of this article is to simply remind you to be an educated consumer of professional services. Whether you need to select an attorney to represent your business, an accountant to do your taxes, a financial advisor to manage your money, or an organization to join- you need to take great care. Its not like getting your lawn mowed or your hair cut- damage done will not go away with two or three weeks of growth.

Financial Poise- the Reveal

Financial Poise, a weekly newsletter, sister website, and sister webinar production company, can help. It focuses on educating two overlapping demographics: (1) the mass affluent (which we define loosely as anyone under the age of about 35 who earns at least $200,000 per year or anyone who has net worth of between $1 million and $25 million); and (2) business owners- regardless of whether they are part of the first group.

Financial Poise is an educational platform. Its articles, which are free, teach people how to save and invest money; how to start or buy, manage and grow, and ultimately sell or otherwise transition out of a business; and how to communicate with their professional advisors (e.g. accountants, attorneys, consultants, investment advisors, etc.) more effectively. Plainly stated, what these people do (And I include myself, as I am a lawyer) is not rocket science and doesn’t take a genius-level IQ to understand. If you cannot understand their advice, then it is them- not you- and you should fire them.

Financial Poise contributors are accountants, attorneys, bankers, financial advisors, investment bankers, investment professionals, and others who earn their living from advising and otherwise representing business owners, the mass affluent, and the ultra-affluent (i.e. roughly defined as those with a net worth of at least $25 million).

When you read a Financial Poise article you can trust that the author did not pay to have it published and that the article was not crowdsourced. Financial Poise contributors are knowledgeable and experienced in their area of practice and were recommended to Financial Poise editors by sources we trust. Their credentials were then vetted by our staff.

You can expect understand what our contributors write because the Financial Poise editorial staff makes sure of it; it simply does not allow legalese, needlessly complicated math, archaic writing, industry-specific jargon without explanation, or just plain bad writing. And you can trust that Financial Poise doesn't accept advertising from any firm that advises people how to invest their money.

You can also actually expect to enjoy Financial Poise. The expression "funny money" has several meanings, the most common of which is probably its use to refer to counterfeit currency, but FP uses it as a mantra: constantly trying to imbue its content with a little humor (though, to be clear, the measure of success is much higher than the Chevy Chase movie of the same name, which was produced way after he lost his funny). 

What’s the Angle?

Subscribe to the free Financial Poise Weekly Newsletter- it is free, it takes 10 seconds or less to subscribe because all we ask for is your name and email address, and we will never sell your information). You can subscribe here. Or you can check out some back issues here and subscribe at the same time. And, yeah, like Victor Kiam, I am the publisher.

And no, Financial Poise is not a not-for-profit. It exists to make money.  The articles are free, the newsletter is free, but the webinars are not. Financial Poise sells one-hour webinars on various topics involving business, business law, investing, and finance. It doesn’t do so in an “in your face” kind of way. And you’ll never feel like an article we publish was just a teaser for a webinar. Give the newsletter a try. You have nothing to lose.