New Alternatives Fund, Inc.
150 Broadhollow Road
Melville, NY 11747
Phone 1 800 423 8383


Jonathan Katz, Secretary to SEC
450 Fifth Street, NW
Washington, DC 20549-0609
HYPERLINK mail to:""

File No. S7-03-04

Dear Sir:

The undersigned is the Chairperson of the New Alternatives Fund.

The SEC proposals do not appear to be necessary or useful to all funds and their stockholders. They are clearly not beneficial to the shareholders of small funds.

Definitions: I see the definition of a small fund as more than $100 million. In speaking over the years with large stock broker firms, while asking them to sell our fund, I have been told that a fund with fewer assets than $75 million cannot survive. They often will not market funds with assets less than $500 million.

Scandals Leading to the Proposal: I have not read or otherwise learned of any independent fund with assets of less than $100 million being involved in any of the recent scandals.

Cost of the Proposals is Significant: I have made some illustrations of the damage to shareholders of small funds, using my fund's estimates.

Background of Data:

  1. Value Line's Published Data for average corporate dividends at the end of 2003 was 1.7%

  2. New Alternatives assets were over $40million. Using the 1.7% of the total availability of dividends received there would be a base of $680,000.

  3. Increased cost of the SEC proposal :
    A. Retainer (estimated) for counsel to independent directors for a counsel that may never be required $35,000.00
    B. Paying more directors$4,000.00
    C. More meetings of independent directors $20,000.00
    D. Aids to Directors $25,000.00
    E. Independent Director taking over as Chairperson $25,000.00

The result would be to reduce the dividend availability to shareholders by 16%. This would be an additional expense from other sources. This could be higher or less but it is reasonable estimate.

I calculated that a fund with $400 million of assets would pay twice as much to honor these proposals. That would reduce their dividend payment ability by 3.18%.

I am unable to envision the billion dollar funds and fund families. I surmise that one director in such large funds may receive more income than all our directors and managers not counting the pensions and other perks they receive. We may have something in common but not here.

I think the difference resembles Walmart and the corner grocer. Walmart has counsel, probably several. The corner grocer would likely go out of business if he had to pay an attorney that he did not need.

Bouncing The Insider Chairperson: The cost of removing a Chairperson who is an insider is two fold. You will be replacing a person who knows more about the needs of the fund with a person who has to learn much.

You will be replacing a person who does not charge the fund with a person who will require significant extra payment for significant responsibility and time.

Retaining Counsel for Independent Directors When Not Requested: Concerning the requirement for engaging an attorney for the independent counsel whether or not such is desired is in general strange for big funds and small funds. There are differences. Hiring non requested hiring of counsel by small funds hurts small funds and their shareholders.

Can you visualize a shareholder of a small fund seeing in the fund expenses payment of counsel not needed. It would raise suspicion that some relative was on the payroll.

Have small funds retained or even hired counsel to serve the independent directors? Have as many as one fourth of one percent of small funds retained counsel for independent directors? There are probablyone thousand funds with assets less than $100million. Is there a single example of an injury to shareholders of a small fund that did not retain counsel for independent directors?

Independent Directors Required to Meet Every Quarter: Many directors are paid by the meeting. It is attractive to some directors. Small mutual funds have a different experience. Competent directors are hard to find for funds that pay modestly for their service. Directors with modest payments are still liable for law suits which can reduce the enthusiasm for serving.

Does it appear that with more frequent meetings that there will be less impropriety? Do you believe that if Enron officers or directors met twice a day every day their integrity would have been higher? Do you not think that the independent directors could have the knowledge and instinct to determine the frequency of their meetings? This provision reminds me of the SEC requirement for meetings of the audit committee. They did not provide for the meetings of a one person committee.

I have attached a report on the status, experience and views of our mutual fund. Other small funds will have different experiences and needs, but I doubt that the other small funds and their shareholders will benefit from the new SEC proposals.

I offer the history and condition of our fund as an example of the need of the proposals and impact on a small fund of the SEC proposals.


Maurice Schoenwald
Chairperson of New Alternatives Fund
CC Investment Company Institute c/o Jennifer Choi ""

New Alternatives Fund, Inc.

The History and Views of One Small Fund Concerning
SEC Proposed Changes

Connections: The New Alternative Fund is an `orphan". We have no connection with other funds, no connection to any bank or insurance company or with any related organization. We do not get soft or hard money or things from anyone. There are other small funds sponsored by fund families, banks, and insurance companies that may have different programs.

Format: We have no 12b1 plan. We have one class of stock. All of our investments are publicly traded. There are no investments that need evaluation other than the open market.

History: The Fund was founded more than 20 years ago. The founders are, a father and son, both neighborhood lawyers, with a concern for the environment. The original funding was from neighbors who each contributed about $10,000... The undersigned contributed $40,000.

The founders and neighbors became the board of directors. During the 20 year period there were several deaths of the initial directors. The two insider directors remain along with two of the independent directors. There are three new directors.

There are no fund employees, unless the independent directors are considered employees. Expenses for rent, staff, telephones, printing, computers, stationary, etc. are paid by the managers.

For several years the directors received nothing. The independent directors now receive $500.00 each year. Travel by coach is paid for by persons living more than 250 miles away. One of the original directors has moved to Paris, France and receives the cost of a round trip by coach. There is no health program, no options, and no pensions. The two independent directors on the audit committee receive an extra $500.00 each (a recent expense).None of the directors are on the staff or board of other funds.

Meetings: There are two meetings a year. There are frequent telephone discussions.

Size: We now have almost $45, million in assets

Manager: The manager is Accrued Equities, Inc. The managing company was incorporated in 1954 to serve private clients of the undersigned. The principal shareholder is now David Schoenwald, son of the undersigned. The undersigned is the minority shareholder. There are no other shareholders.

Staff of the Manager and Fund: The fund has no staff. There are one and one half managers and a person who serves as a file clerk and record keeper and who answers the telephone. David Schoenwald works about 50 hours a week and has not taken a vacation in several years.

Maurice Schoenwald, David's 83 year old father, visits New York from Florida for several months a year. The undersigned, Maurice, works about 25 hours a week. There are no other persons. Maurice is paid by Accrued Equities, Inc. Maurice is also the fund chairperson.

Counsel: There is no counsel. There has never been the need for counsel since the fund started in 1982. David and the undersigned, Maurice, are both attorneys. Once in a while we need to file a statement that we are indeed incorporated. For that, we have called upon an old friend, the former Dean of Hofstra Law School. He knows that the Fund was incorporated. He does not charge anything. We have never needed counsel. We have never been sued or charged by any shareholder

Counsel for Directors: As indicated above the Fund never had counsel. The independent directors never had counsel. One of the independent directors is an attorney. He never expressed a need for counsel. No director has sought counsel. Would it be proper to pay an annual retainer for counsel who might never be used? If counsel was sought would it not be better to hire her when needed.

It is difficult to imagine being required to hire such counsel when we never needed counsel for 20 years and when there is an attorney among the independent directors.

Fund Investment: All shares invested in are publicly traded. There is only once class of shares. There are no short sales. No lending, no borrowing. No soft money; no gifts. It is very simple. Our area of investment is those companies that are perceived to be doing something food for the environment with an emphasis on alternative energy.

Board Composition: We presently have five independent directors and two insiders (Maurice and David). That is slightly less than 75% of independent directors. Since we pay directors only $500. a year and since we offer nothing else and since there are serious risks in being a director it is difficult to find competent directors.

An alternative is for the undersigned founder to resign as a director while remaining a manager. We could then reach the 75% requirement.

Independent Chairperson: The undersigned, insider, has been Chairperson since 1982. He prepares the agenda, with the consultation of all board members and is familiar with the changes required. He likes the job .He writes the quarterly newsletter. Hundreds of shareholders have written unsolicited letters in praise of the newsletter. He is not expensive. He receives nothing from the fund and a total of $34,000. a year from Accrued Equities, Inc.

My feeling is that I have done well. I know more about the fund and its needs than anyone excepting David. I have done nothing wrong why do I have to quit?

Separate Sessions: We have been using separate sessions for nominating new directors and such. When there is a separate session David and I leave his living room and go into the kitchen and wait to be called back in. For a while we had only one member of the audit Committee. We understood that she was required to have independent meetings. We did not know how that could be done. She graciously offered to go in the hall for a few minutes and contemplate. We solved it by having another member of the Audit Committee.

Meeting of Independent Directors Once a Quarter: For twenty years the directors rarely met more than twice a year. Rarely (about 2 times in 20 years) there was a special meeting.

When there was such a meeting it was done by conference call. A sample of a special meeting was a proposal for the board to increase the authorization of fund foreign investment from 15% to 35% by way of a proxy vote. It was submitted to the board with details before the conference call. It worked just fine. Shareholders later voted more than 97% in favor.

An increase in required meetings would increase cost to the fund, put pressure on the directors, make it harder to get more directors and improve nothing. We would certainly need to raise director compensation. We are trying to keep costs down.

Independent Director Staff: I cannot imagine what such a staff would do. I cannot but smile as I try to envision this. About all I can conceive is having someone present at a meeting to serve snacks and hang up coats. That is my job along with David. We do it without charge. David or his wife pay for the snacks and put them on the kitchen table. His house is on steep hill. When needed David, President of the Fund, is the valet who parks the cars on the hill for independent directors. If the meeting is in the office David buys "Dunkin Donuts" down the street and puts them on his desk with the coffee we always have.

The Independent Directors are quite literate and have considerable knowledge. Dorothy has an MBA degree and her own advertising business. Sharon has been writing about financial affairs for major financial publications for about 25 years, Preston has taught finance in a university, John is a lawyer, Murray is a manager of various non-profit organizations. What would a staff do for them?

Our General Opinion:

  1. We doubt that a small independent simple fund with a simple program will solve the trouble the SEC is trying to cure. The impact of the cost of the proposals is serious for the fund and the shareholders.

  2. Four meetings a year will increase costs and make it hard for a small fund to find independent directors. Does anyone believe that we can get Independent Directors to come to four meetings a year for $500? a year?

  3. Paying counsel for independent directors, for a small fund, when such services have never been used, in our case for 20 years, and which may never be used. It would be unwise to impose an expense that has such little use.

  4. Requiring an Independent Chairperson, for a small fund, would require more expense and provide less knowledge.

  5. Have you ever known a small fund to pay for a staff for its independent directors? Why? What for?

Maurice Schoenwald