Joel Baker, CFA

Joel has 18 years of relevant investment and consulting experience. He has been working with nonprofit organizations, foundations and endowments, and employee sponsored retirement plans for 14 years during his time at Highland. Joel is also a member of Highland’s research team and has substantial experience with plan asset allocation, fund selection, investment monitoring and objective setting. Joel began his consulting career with IBM and was with Ernst & Young as a senior consultant immediately prior to joining Highland. Joel has a BBA degree from Cleveland State University and an MBA from Baldwin Wallace College. He has earned the Chartered Financial Analyst designation and is a member of the CFA Institute, the CFA Society of Cleveland, and the Greenwich Roundtable.

Recent Posts

3(21) or 3(38). Whatever it Takes. Understanding Fiduciary Responsibility.

 

In the 1983 film Mr. Mom, Michael Keaton plays a downsized auto engineer named Jack who tends the homefront while his wife, Caroline, goes to work as the family breadwinner. When Caroline’s boss arrives to pick her up for a business trip, Mr. Mom, chainsaw in hand, leads him to the renovations ongoing in the house. He asks Jack if he’ll be wiring the house for 220 volts, and Jack replies with the movie’s signature line: “Yeah, 220, 221—whatever it takes.”

ERISA plan management is increasingly complex (and sometimes litigious). It’s no wonder a plan sponsor might say their investment adviser is serving as a fiduciary—yeah, a 3(21) or 3(38) fiduciary. Whatever it takes. The understanding of the two may be unclear, but it’s not unimportant.

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How the Ivies Grow

Over the last five years, when the average college endowment fund earned an annualized 5.9%, a typical investor choosing a low-cost 60-40 index fund realized an average return of 8.2 %, a difference of 2.3%. So why weren’t more endowment funds passively managed? Why not park those billions in an index fund?

That’s a question raised (and criticism implied) of the Ivy Leagues’ largest endowments from their own graduates and investment gurus like Warren Buffet in his 2016 investor letter.

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What Gives: The Impact of the 2018 Tax Cuts and Jobs Act on Charitable Giving

The Tax Cuts and Jobs Act signed into law in late December inspired a spate of commentary, particularly concerning the doubling of the standard deduction and the expected impact of that on nonprofits.

The new tax law doubles the standard deduction to $12,000 for individuals and to $24,000 for couples filing jointly, meaning millions of middle income taxpayers will find it easier and financially beneficial to take the standard deduction when filing their taxes rather than submitting itemized deductions. (Today, roughly 30 percent of taxpayers itemize deductions for things like mortgage interest, state and local taxes, medical expenses and charitable giving.)

For this group of people, the financial incentive inherent in itemized charitable contributions goes away. For higher income individuals (those with the ability to claim more than the standard deduction of $12,000 or $24,000) the value of itemizing deductions (including those for charitable contributions) remains.

The new law gave rise to some dire predictions for nonprofits at year-end.

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