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Tuesday, February 26, 2013

Impact Investing: Turning a Profit and Changing the World ...

Impact investing, a rapidly growing sector of?socially responsible investing (SRI), represents the nexus of philanthropy and traditional finance: It expands the definition of return on invested capital to include both financial and social returns ? and is?a way to use the tools of finance and investing to create social change. If a?survey of financial professionals conducted last year by the First Affirmative Financial Network?is any guide, impact investing will likely be the number one growth area in?the SRI field in 2013.

At the same time, awareness of this emerging area of finance is growing. In a 2011 survey, JPMorgan found that?the number of institutions and high net worth individuals who were familiar with impact investing had doubled since 2010. JPMorgan predicts that by 2020 there could be?between $400 billion and $1 trillion dollars directed toward impact investing.

So how does it work? The fundamental assumption underlying impact investing is that the creation of economic value and social value are not mutually exclusive. Therefore, a unified market-based approach can be used to develop long-term sustainable solutions to social and environmental problems. Impact investors include public pension funds, foundations, corporations, governments, and individual investors. Their common objective is to invest in companies or securities that will provide a return on investment while also alleviating poverty, creating affordable housing, building needed infrastructure, or conserving natural resources.

Of course, the concept of investing in a socially responsible manner dates back to biblical times, and faith-based investors continue to capitalize on their roles as shareholders to serve social causes. According to the Forum for Sustainable and Responsible Investment, the number of US mutual funds that use environmental, social, or corporate governance (ESG) criteria, grew from 12 in 1995 to 333 in 2012 (a 2,675%? increase) while assets under management grew from $12 billion to $640 billion (a 5,233% increase) during the same period. The performance of these funds illustrates that it is possible to achieve both financial and social objectives. (Though it should be noted that a recent overview of studies on the returns for SRI found that results tend to be mixed.)

Impact investors have taken the concept of SRI one step further. Instead of just avoiding companies whose products and services are incongruent with their values, impact investors seek out and invest in companies, securities, and funds that are actually helping to combat societal issues of hunger, homelessness, disease, and environmental degradation. As a result, new and unique investment products have been introduced that not only address specific social issues, but offer competitive market returns.

The AdvisorShares Global Echo ETF (GIVE), for example, focuses on sustainable and impact investment opportunities. A portion of its management fee goes to the Global Echo Foundation, which provides funding to charitable organizations and development programs around the world.

Social impact bonds, also known as pay-for-success or social benefit bonds, are used to finance organizations that provide social services and programs to individuals and communities that were once provided by the governments. The government pays the interest and principle on these bonds out of the savings it receives, if the outside organization is able to provide the same services at a lower cost. Returns may also be contingent on social outcomes. In the United Kingdom, for example, the proceeds of a social impact bond are being used to fund an organization that provides comprehensive assistance to men released from prison. Bondholders will only receive interest and principal payments if the services provided by this new organization reduces recidivism to a specified rate.

Developments in recent years have addressed several critical challenges facing the impact investing industry ??and should facilitate this forecasted growth.?In 2009, for example, the Global Impact Investing Network (GIIN), an independent nonprofit organization, was formally established to foster the growth and effectiveness of impact investing by providing a forum to address ?systemic barriers to effective impact investing by building critical infrastructure and developing activities, education, and research that attract more investment capital to poverty alleviation and environmental solutions.? One of its most important projects has been the development of Impact Reporting and Investment Standards (IRIS). These standards provide a ?standardized taxonomy and a set of consistent definitions? that investors can use to measure and assess the social, environmental, and financial impact of their investments. In addition, IRIS maintains a database that contains performance data from funds and mission-driven organizations.

There has been a global trend among governments to support impact investing. In 2011, the UK government established Big Society Capital, a social investment bank with a mission ?to catalyze the growth of a sustainable social investment market, making it easier for social ventures to access the finance and advice they need?? at all stages of their development.? In the United States, the Overseas Private Investment Corporation (OPIC), whose mission is to ?mobilize private capital to help solve critical world challenges,? provided $285 million in financing for six new impact investment funds. In Australia, the government provided $20 million to establish the Social Enterprise Development and Investment Funds (SEDIF).

Although some view impact investing as a new asset class or investment strategy, I believe that it will become an investment philosophy. Who wouldn?t want help the world and make money at the same time? After all, as Amy Domini says in her book, Socially Responsible Investing, ?The way we invest creates the world we live in.?

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

Photo credit: ?iStockphoto.com/kimberrywood

Source: http://blogs.cfainstitute.org/investor/2013/02/25/impact-investing-taking-responsibility-for-your-money-and-its-impact-on-the-global-community/

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Sunday, February 24, 2013

Schilling's bloody sock from WS goes for $92,613

NEW YORK (AP) ? A bloody sock worn by Curt Schilling while pitching for the Boston Red Sox in Game 2 of the 2004 World Series against the St. Louis Cardinals was sold for $92,613 at a live auction on Saturday night at the Fletcher-Sinclair Mansion.

Schilling had loaned his sock to the National Baseball Hall of Fame Museum but when his Rhode Island-based video game company "38 Studios" went bankrupt, he decided to sell the sock that was bloodied as he pitched on an injured ankle.

Bidding began at $25,000 several weeks ago. Texas-based Heritage Auctions anticipated it would get more than $100,000.

An anonymous bidder submitted the winning bid.

"It's a one of a kind item, so it's really tough to gauge what kind of interest you're going to get," Chris Ivy, director of Sports Auctions for Heritage Auctions said. "Sometimes you catch lightning in a bottle where a piece will take off like the Buckner ball. This particular time, it's the first time we sold a sock with blood on it so it's very hard to gauge what kind of final number it's going to end up."

Schilling helped end Boston's 86-year championship drought ? the "Curse of the Bambino" ? by pitching on an ankle that had been sutured more than once through the postseason. Pitching with a damaged tendon resulted in bleeding through the sock. Still, Schilling allowed only a run in six innings.

The right-hander made $114 million over an 18-year career with Baltimore, Houston, Philadelphia, Arizona and Boston but defaulted on loan payments to the state of Rhode Island.

Schilling's company was lured away from Massachusetts to Providence after Rhode Island's economic development agency in 2010 approved a $75 million loan guarantee. The company ran out of money less than two years later and filed for bankruptcy. Rhode Island is facing a tab of approximately $100 million related to the deal, including interest, and the agency is suing Schilling and others, saying it was misled.

Even with the large sale price, Rhode Island is not getting the proceeds from the sale. Schilling listed the sock as bank collateral in a filing in Massachusetts after investing roughly $50 million in the company and losing all his baseball earnings.

The sock up for sale was actually the second of two. The more famous one was stained when Schilling pitched through an ankle injury during Game 6 of the 2004 AL championship series against the New York Yankees; that sock is said to have been discarded at Yankee Stadium.

Schilling's sock was the second notable piece of Red Sox memorabilia to be auctioned off in the last year. The ball that went through Bill Buckner's legs in Game Six of the 1986 World Series was projected to sell for $100,000 but fetched $418,000.

The other marquee part of the auction was several 1980 Winter Olympic items from Mike Eruzione, who scored the game-winning goal for the US Hockey team to the "Miracle on Ice" against Russia 33 years ago Friday. The team won the gold medal by beating Finland.

He was selling nearly everything except for his actual gold medal.

Besides the No. 21 jersey Eruzione wore when he scored the game-winning goal in the comeback victory over the Soviet Union, he sold his stick, the jersey from the "Miracle on Ice" game, his hockey pants, his hockey gloves and the sweatsuit worn at the gold medal ceremony.

The items were sitting in Eruzione's hockey bag for most of the last 33 years, but his stick went for $262,900 while his jerseys went for $657,250 and $286,800 respectively.

"It was fun, obviously I don't know what's going to happen in something like this," Eruzione said. "It's exciting and I'm happy that a few people enjoy it and display it properly."

Ivy said that Eruzione was interested in selling his memorabilia after seeing the jersey that Paul Henderson wore for Team Canada in the 1972 Summit Series against Russia sell for over $1.2 million dollars last year.

Eruzione said that proceeds will be used to help his family and his charitable endeavors.

Other noteworthy New York Yankee and Red Sox items, included a $1,150 signing bonus endorsed by a 17-year-old Mickey Mantle that sold for $286,800 and two checks related to the purchase of Babe Ruth, which went for $95,600.

Source: http://news.yahoo.com/schillings-bloody-sock-ws-goes-92-613-034641871--mlb.html

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Rapper, cabbie meet violent end together in Vegas

This April 2011 photo from the California Department of Motor Vehicles shows Kenneth Cherry Jr., also known as rapper "Kenny Clutch." The Clark County, Nev., coroner's office identified Cherry as the Maserati driver who died Thursday, Feb. 21, 2013 after being peppered with gunfire from someone in a Range Rover SUV, sparking a fiery crash that killed two others in Las Vegas. (AP Photo/California DMV)

Tow truck drivers clean up and tow away cars involved in a drive-by shooting on Las Vegas Boulevard in Las Vegas Thursday, Feb. 21, 2013. (AP Photo/Las Vegas Review-Journal, John Locher) LOCAL TV OUT; LOCAL INTERNET OUT; LAS VEGAS SUN OUT

Smoke and flames billow from a burning vehicle following a shooting and multi-car accident on the Las Vegas Strip in Las Vegas early Thursday, Feb. 21, 2013. The Las Vegas Strip became a scene of deadly violence early Thursday when, authorities say, someone in a black Range Rover opened fire on a Maserati, sending it crashing into a taxi that burst into flames, leaving three people dead and at least six injured. (AP Photo/Erik Lackey)

Law enforcement personal investigate the scene of a mulit-vehicle accident on Las Vegas Blvd and Flamingo Road Thursday, Feb. 21, 2013. Authorities say a Range Rover opened fire on a Maserati at a stoplight, sending it crashing into a taxi that went up in flames, leaving three people dead and at least six injured. Police were checking with nearby businesses to see whether a previous altercation prompted the car-to-car attack (AP Photo/Las Vegas Review-Journal, Jeff Scheid) LOCAL TV OUT; LOCAL INTERNET OUT; LAS VEGAS SUN OUT

LAS VEGAS (AP) ? Kenny Cherry was an aspiring rapper who moved from the Bay Area to Las Vegas to pursue his career. His music videos online show him cruising the Strip in his Maserati.

Taxi driver Michael Boldon was a family man who hailed from Michigan; and his passenger, Sandra Sutton-Wasmund, came from a loving Washington state family and was well regarded in her community.

The lives of the three ended in violence normally seen only in movies: gunfire, a fiery crash and an explosion before dawn Thursday on the neon-lit Las Vegas Strip.

As investigators Friday tried to find the gunman in a black Range Rover SUV who triggered the shocking chain of events, families and friends tried to grasp the blink-of-an-eye finality of it all.

"Right now my heart is breaking," said Cherry's great aunt, Patricia Sims, of Oakland, Calif. "This has really been a tragedy. Kenny was just a delightful kid."

Sims, 75, said Cherry moved to Las Vegas from Northern California, though she didn't know her nephew was a rapper using the name Kenny Clutch.

Cherry's parents were traveling to Las Vegas on Friday to claim his body. The 27-year-old, whose full name is Kenneth Wayne Cherry Jr., was driving a Maserati that was peppered by gunfire before it sped through a red light and smashed into Boldon's taxi.

The taxi exploded into flames, killing Boldon and Sutton-Wasmund, as four other vehicles crashed like pinballs at an intersection overlooked by some of Las Vegas' most famous hotel-casinos: Bellagio, Caesars Palace, Bally's and the Flamingo.

Police think an argument at the valet area of the upscale Aria resort-casino led to the shooting, but they haven't shared details. The shooting happened the same night that Morocco-born rapper French Montana was playing at Aria's signature nightclub, Haze.

"What the original disagreement was is crucial to the ongoing investigation and the identification of the suspects," said Las Vegas police officer Bill Cassell.

He said investigators were examining surveillance video and enlisting help from federal authorities and agencies in neighboring states to look for the distinctive Range Rover. It had blackout windows and custom black rims and was last seen speeding away from the fiery scene around 4:30 a.m. Thursday.

Police said a passenger in the Maserati was wounded in the arm but was treated at a hospital and released. He was reported to be cooperating with investigators, and his name wasn't made public.

Cherry's father, Kenneth Cherry Sr., of Emeryville, Calif., said he was struggling to handle his grief.

He said his son started a music career in Oakland after attending two Catholic high schools. According to his father, Cherry was recognized by other rappers within a West Coast hip-hop strain called hyphy.

Cherry was not well-known in wider music circles, according to Chuck Creekmur, CEO of AllHipHop.com.

"I had never heard his name before," Creekmur said.

Kenny Clutch's YouTube music video, "Stay Schemin," shows scenes of hotels along the Strip as he sings about paying $120,000 for his Maserati.

"One mistake change lives all in one night," he raps in one verse.

Cherry Sr. said he didn't know how his son made money or if he had any other jobs.

"I want to make it clear that my son was no gangster or nothing like that," he told The Associated Press. "He moved to Vegas about six year ago and he was writing music and rap."

Court records show Cherry had no criminal cases or convictions in Las Vegas, and Cassell said there was no record of arrests.

The police spokesman wouldn't say whether investigators determined if Cherry owned, rented or borrowed the Maserati. Cassell called that information "integral to the investigation."

Meanwhile, Boldon's family struggled to cope with his death.

"It's very devastating for us, for my family," said Tehran Boldon, 50, younger brother of the 62-year-old taxi driver. "Our family has no history of violence or gang membership that would predict losing a family member to such an event."

Boldon's sister, Carolyn Jean Trimble, said Boldon was a father, a grandfather and a car enthusiast. He was one of five children born and raised in Michigan, where he took care of his ailing father, who fought cancer, before moving to Las Vegas to be with his 93-year-old mother.

Bolden had owned a clothing store in Detroit and worked at a car dealership, his sister said. He began driving taxis after moving to Las Vegas about 1 1/2 years ago.

Boldon loved watching IndyCar and NASCAR races and drove a Mercedes when he wasn't in a cab. An avid car enthusiast, he tried to persuade Trimble to buy a Bentley, she said.

"Everybody just loved him," the older sister said. "When that car hit that cab, Mike had to be in there talking and laughing."

The irony that a man with a taste for beautiful cars was killed by a sports car wasn't lost on Trimble.

"He would be tickled to death: 'Damn, of all things, a Maserati hit me, took me out like that,'" she said. "I'm happy he didn't suffer."

The county medical examiner said both Boldon and his passenger, Sutton-Wasmund, died of blunt force injuries and that their deaths were being treated as homicides. The 48-year-old woman was from Maple Valley, Wash.

Sutton-Wasmund co-owned a dress shop called The Dazzled Dame and had been in Las Vegas attending a trade show with her partner in the shop, said Debbie Tvedt, the office manager for a Maple Valley plumbing company, All Service Plumbing, that Sutton-Wasmund started with her husband, James Wasmund.

"It's a big loss," Tvedt said tearfully in a telephone interview with The Associated Press Friday night. "This woman was everything to this community.

"Sandi was very, very, very active with the Maple Valley Chamber of Commerce and our entire community," she said.

The Maple Valley-Black Diamond Chamber of Commerce website said Sutton-Wasmund was a board member from 2004 to 2011 before becoming a marketing representative.

Tvedt said her friend was a mother of three ? a 17-year-old son, a 12-year-old daughter and an 11-year-old son.

"Sandi was a loving wife, mother, daughter and sister. Her innocent and tragic loss will be felt by all of those who knew and loved her and by the community at large," said a statement provided to KING-TV in Seattle on behalf of the woman's family.

A phone message left for James Wasmund was not immediately returned.

Besides Cherry's passenger, police said five people were treated for injuries after the six-vehicle crash. No one was said to face life-threatening injuries.

Jogger Eric Lackey snapped a cellphone photo of the blazing scene moments after the crash. Black smoke billowed from the flaming taxi, amid popping sounds from the fire.

The famously glowing, always-open Las Vegas Strip was closed for some 15 hours before reopening Thursday night. One Nevada Highway Patrol sergeant recalled a similarly long closure after the 1996 drive-by slaying of rapper Tupac Shakur.

That shooting ? involving assailants opening fire on Shakur's luxury sedan from a vehicle on Flamingo Road ? happened about a block away from Thursday's crash.

The Shakur killing has never been solved.

___

Contributing to this report were Associated Press writer Garance Burke in San Francisco; AP Music Writer Mesfin Fekadu in New York; and researchers Judith Ausuebel, Jennifer Farrar and Lynn Dombek in New York.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/4e67281c3f754d0696fbfdee0f3f1469/Article_2013-02-23-Vegas%20Gun%20Battle/id-a3be82c986454880975869f099d355ec

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Saturday, February 23, 2013

San Bernardino hire has twice declared bankruptcy

Tim Reid , Reuters ? ? ? 6 hrs.

LOS ANGELES - The bankrupt city of San Bernardino has hired a new city manager who, according to court filings, has twice declared personal bankruptcy and was recently ousted from the board of a small community's water company after being sued by shareholders.

The city council voted unanimously on Tuesday night to hire Allen J. Parker, 71, as its city manager on an annual salary of almost $222,000. He replaces an interim city manager who resigned last month because, according to friends, she was exasperated by the city's internal divisions.

The interim city manager, Andrea Travis-Miller, could not be reached for comment.

Pat Morris, the mayor of the city in California, praised Parker's "wealth of city management experience" and expressed "great confidence" in his ability to oversee the city's affairs. Parker, who began working in the job on Wednesday, will be crucial in guiding the city of 210,000 people through municipal bankruptcy, in a case that could set a national precedent for Wall Street bondholders and pension funds in future municipal bankruptcies.

The mayor and council members knew about both of Parker's personal bankruptcies -- the first in 1991 and the second in 2011 -- and the litigation surrounding his water board tenure before they interviewed him, according to the mayor's chief of staff. They discussed both issues with him when they interviewed Parker last Friday. They say the issues were no impediment: the council interviewed two final candidates but voted unanimously to hire him.

The California newspaper The Press-Enterprise reported on Thursday that Parker filed in 2011 for personal bankruptcy. In comments to the paper, Parker said that his bankruptcy and his ability to handle the city's fiscal problems were "apples and oranges."

Calls and emails to Parker asking about his bankruptcy filings and his tenure on the water board went unanswered. An email to Parker asking if his wife Sara, with whom he jointly filed for bankruptcy in the 2011 petition, would comment also did not elicit a response.

The bankruptcy of San Bernardino, a city 65 miles east of Los Angeles, is a national test case as to whether the pensions of government workers take precedence over other payments in a municipal bankruptcy -- a high stakes issue for pension plans and their beneficiaries, and for the Wall Street bondholders who lend money to governments.

City managers are central to any city's quest to seek bankruptcy protection, because they have a pivotal role in answering questions from creditors and the court. The judge overseeing San Bernardino's case must still rule on whether the city is eligible for bankruptcy before the case proceeds.

Legal dispute
A 2009 lawsuit brought by a shareholder in the Banning Heights Mutual Water Company, where Parker was a director and then president of the board between 2004 and 2010, resulted in Parker being voted off the board in February 2010 after a court-ordered special election.

Banning Heights is a tiny unincorporated community 85 miles east of Los Angeles. The water company was formed in 1913 to provide water and today it serves about 250 residents.

Despite its small size, the water rights and land upon which the community sits are worth millions of dollars, according to John McClendon, the water board's general counsel. At one point under Parker's tenure on the water board, an entity called The Tahiti Group had placed $7 million in an escrow account to purchase the company, according to correspondence attached to court filings.

Court filings in the 2009 lawsuit, and a subsequent separate lawsuit brought by the water company allege that Parker, along with others, used their position on the board to try to sell the water company, against the wishes of shareholders.

Parker and others were also accused of withholding information from shareholders, according to those court filings. The shareholder sued in 2009 because he said Parker and others ignored the results of previous shareholder elections when they were voted off the board. Parker is not a defendant in the second lawsuit which is still active.

According to one court filing by the water company dated September 20, 2010, when shareholders gained access to the water company's office after Parker and others were voted off the board, computers were missing, hard drives had been wiped and bags of shredded documents sat on the floor.

In a deposition dated November 9, 2010 relating to the 2009 lawsuit, Parker said he never shredded documents and did not believe anyone "during our regime" on the water board shredded any documents.

After a judge ruled against Parker and others in the 2009 lawsuit and ordered a special shareholder election, they were voted off the board by shareholders in February 2010.

Background check
According to his resume, which does not mention Banning Heights Water Company, Parker has long experience as a local manager in several other California cities such as East Palo Alto, Half Moon Bay, Seal Beach and Compton.

Jim Morris, the son and chief of staff to Pat Morris, San Bernardino's mayor, said the city had done its own thorough background check on Parker before he was interviewed by the council, last Friday. His bankruptcies, and the Banning Heights Mutual Water Company litigation, were known about by the time the interview took place, Morris said.

"We talked to the attorneys involved, and pulled the court filings. These were disputes over election results," Morris said. He said the Banning Heights litigation did not involve serious issues, and that such disputes occur on small entities such as the water board all the time.

Morris said there was no reason why Parker should have included his tenure on the water board on his resume. "He wasn't employed by the water board," Morris said. "His resume was an employment resume. If someone was a member of their local homeowners' association you wouldn't expect that to be on their resume."

Parker filed for personal bankruptcy in 1991 in San Mateo, Calif., according to court records. No further details were available. In February 2011, he filed for bankruptcy with his wife, in the U.S. Bankruptcy Court, Central District of California.

According to the 2011 bankruptcy filing, Parker and his wife listed among their debts two home mortgages with unsecured balances of $267,500, as well as bank and credit card debt of $137,252.

Source: http://www.nbcnews.com/business/bankrupt-san-bernardino-picks-twice-bankrupt-manager-1C8499972

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Samsung looks past Apple, takes aim at BlackBerry

Approximately 150 federal and state law enforcement agents launched a massive raid on one of the biggest?perpetrators?of government fraud in America: The Scooter Store. Yes, that's right. The nation's largest provider of single-person electric vehicles and power chairs is the target of a federal investigation, probably because many of the people who ride around their "personal mobility?devices" don't actually need them.

Source: http://news.yahoo.com/samsung-looks-past-apple-takes-aim-blackberry-134053206.html

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Man sought in attempted kidnap of 2 Calif. girls

WHITTIER, Calif. (AP) ? An 11-year-old girl walking alone near a Southern California park was grabbed by a man and shoved into the back seat of a car where a sobbing 7-year-old was already being held, investigators said Friday.

The young girls were apparently the target of the same man prowling Whittier neighborhood parks for young victims earlier this month.

The older girl, accosted Thursday afternoon, managed to get out of the car and free the 7-year-old and both girls ran in different directions to escape the suspect, Officer Brad White said.

The 11-year-old ran from Founders Park and called police when she got home. The identity and whereabouts of the younger girl are unknown.

"We have not received any information on the 7-year-old," White said, adding there are no reports of missing children in the suburb 20 miles southeast of downtown Los Angeles.

The girls do not know each other and the 11-year-old wasn't hurt.

Extra police were on duty Friday in the hunt for the suspect in a red convertible with a tan top. He was described as a 25- to 35-year-old, Hispanic, about 6 feet tall with a medium to heavy build. School superintendents have also been alerted.

The 11-year-old girl said he had short black hair with three dots tattooed on his left hand.

"It is very unusual for Whittier," White said. "We're taking it very seriously. We are following any leads we have."

The same man approached three teenage girls earlier this month, authorities said.

Just before noon on Feb. 5, a man matching the same description and driving a red convertible pulled up to a 17-year-old girl walking near Broadway Park and asked her if she wanted a ride.

"After the victim told him no, he proceeded to stop the car and open the door," Lt. Kent Miller said in a statement. "The female fled and called the police."

About five hours later, a witness called police and said two teenage girls near Central Park were arguing with a man who had ordered them into his red convertible, White said.

The suspect drove away and the girls left on foot.

White said the witness didn't know the teen girls, and they didn't call police.

Source: http://news.yahoo.com/man-sought-attempted-kidnap-2-calif-girls-172852105.html

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Friday, February 22, 2013

NATO to consider maintaining larger Afghan force

BRUSSELS (AP) ? NATO is strongly considering a proposal to continue funding an Afghan security force of 352,000 troops through 2018, as part of an effort to maintain security and help convince Afghanistan that America and its allies will not abandon it once combat troops leave in 2014, senior alliance officials said Thursday.

Such a change, if NATO endorsed it, could increase the costs to the U.S. and allies by more than $2 billion a year, at a time when most are struggling with budget cuts and fiscal woes. Last May, NATO agreed to underwrite an Afghan force of about 230,000, at a cost of about $4.1 billion a year after 2014. It cost about $6.5 billion this year to fund the current Afghan force of 352,000, and the U.S. is providing about $5.7 billion of that.

Maintaining the larger troop strength could bolster the confidence of the Afghan forces and make it clear that NATO is committed to an enduring relationship with Afghanistan, a senior NATO official said.

The officials spoke on condition of anonymity because they were not authorized to discuss the plan publicly.

Asked about the plan, NATO Secretary-General Fogh Rasmussen confirmed to reporters that it was under consideration.

"I feel confident that we will be able to finance Afghan security forces of that size," he said.

He added that the Afghans can't afford a security force of 352,000, so the funding would be the responsibility of the whole international community.

"From the economic point of view, it is actually less expensive to finance Afghan Security Forces than to deploy foreign troops," he said.

NATO defense ministers, including outgoing U.S. Defense Secretary Leon Panetta, are meeting here and discussing progress in the Afghan war and the ongoing drawdown of troops. President Barack Obama announced in his State of the Union address that he will withdraw 34,000 American troops from Afghanistan by this time next year. There are about 66,000 there now.

Other NATO nations are also evaluating their commitments to the war, and officials are meeting to encourage allies to participate in the effort to continue to train and advise the Afghan forces after 2014.

According to one of the NATO officials, uncertainty about the future is a critical worry in Afghanistan. Many still believe the U.S. will abandon the country when the combat is over while others believe Taliban assertions that the coalition troops will stay as an occupying force. In the coming months, the official said, it will be important to show the Afghans that NATO allies will continue to support the country after 2014, while also proving that the local forces will be in charge of security for their own nation.

Such intangible issues, the official said, present a greater problem at this point than some of the other more obvious challenges, such as improving the quality of the Afghan forces, battling the Taliban and getting the U.S. troops and equipment out by the end of 2014.

The official said Afghan troops worry that if the size of the force is cut, they will be out of a job after 2014. As a result, they may not concentrate on building better military units and instead focus on how they will care for their families or get money when the tap runs dry.

--------

Associated Press Writer Don Melvin contributed to this report.