Financial Literacy: The M in STEM

Finance

“We teach our children to wear seat belts. Schools invest in programs aimed at helping kids practice smart internet habits. But few are talking about the dangers of too much debt or the blessing that is compound interest.”

– Greg Iacurci for InvestmentNews (2019)

State of Texas Representative Vikki Goodwin (District 47, Travis County), filed House Bill 1182 in 2019. The Bill required a personal financial literacy course for high school students. Vikki remarked:

“I filed this so that we can ensure young adults are getting out of high school with an idea of how to handle their personal finances. I have kids of my own who are young adults, who are on their own now and have had to learn how to budget, and of course as a realtor I’ve come across a lot of young adults who are trying to buy a home or lease a home and who just don’t know a whole lot about finances, interest rates, credit, credit cards, and credit scores.”

Some educators fear high school students have a lot of requirements already, and this would involve a new requirement. But Vikki emphasized, “We’re trying to make it as flexible as possible. It could either take the place of an elective, or we’re also looking into having it take the place of one semester of math or maybe one semester of economics.” (Texas Standard)

Goodwin’s measure passed in the Texas House of Representatives, but then died shortly thereafter in the Senate. It is my personal hope the bill will be reintroduced and passed in the future.

When it comes to being financially literate, Americans fall short globally.

“Although the U.S. is the world’s largest economy, the Standard & Poor’s Global Financial Literacy Survey ranks it No. 14 (tied with Switzerland) when measuring the proportion of adults in the country who are financially literate. To put that into perspective: the U.S. adult financial literacy level, at 57%, is only slightly higher than that of Botswana, whose economy is 1,127% smaller.” Greg Iacurci for InvestmentNews (2019)

How do we go about solving this issue and putting America back at the top of the list?

Last fall, I had the good fortune to meet Maura Cunningham, founder of Rock The Street, Wall Street, a new financial literacy nonprofit based in Nashville, Tennessee that is expanding across the United States. With a focus on young high school age women, Rock The Street is unique. It departs from traditional, passive classroom learning models by engaging volunteer female financial professionals as teachers and mentors. This “real life” program dovetails seamlessly with the normal fall and spring semesters of the school year.

Using an open source curriculum, Rock The Street professionals both teach and mentor. Field trips to financial institutions are part of the mix. Rock The Street has developed an extensive national network of financial service companies eager to provide leadership support, both in terms of funding and female financial professionals who can be tapped to help lead classes and to serve as mentors.

The statistics for this startup (launched in 2013) are impressive. Rock The Street, Wall Street served 2,325 young high school age women last year. Its alumnae demonstrate a 92% increase in financial literacy and they are four times more likely to pursue degrees in finance, economics or related fields than the national average. In terms of Texas, Rock The Street has been offered in two schools in the Fort Worth area. We hope to see it expand statewide in the months and years ahead.

The sad truth is, without financial security women are more prone to domestic violence, they have fewer job opportunities and reduced income. And, 41% of families with children under age 18 include mothers who are the sole or primary source of income for the family. The likelihood that future mothers will also be the sole family breadwinner means the existing gender wage gap and savings gap will have a negative impact on generations to come.

High School Class

Our high school years are a critical time of life. This is when self confidence and self esteem are strengthened and future career choices are made. Unfortunately, comprehension of basic financial principles today is staggeringly low: only 27% of young adults know basic financial concepts such as interest rates, inflation, and risk diversification.

Oxford Learning notes, “Some students dislike math because they think it’s dull. They don’t get excited about numbers and formulas the way they get excited about history, science, languages, or other subjects that are easier to personally connect to. They see math as abstract and irrelevant figures that are difficult to understand.” Oxford suggests making math “real” to students by showing how the M in STEM relates to everyday life.

What better way to engage young women in high school than with female financial professionals actually working in the field!

“In the U.S., we start to lose girls in math at age nine. As they age, girls report significantly lower confidence in math, despite earning equal scores to boys. 80% of teachers self report that they are not competent teaching financial literacy. With girls falling out of math at such an early age and teachers reporting that they are not qualified to teach financial literacy, it’s no wonder two out of three women state they know little to nothing about finance or financial products.” (Rock The Street, Wall Street)

I am heartened to see a growing number of support organizations and startup underwriters focusing on women today. Particularly exciting is Melinda Gates’ financial commitment to promoting gender equality and expanding women’s power and influence across the United States. Thanks go to them all, including educational innovators like Maura Cunningham and Rock The Street, Wall Street.

If you would like to know more about this pioneering and highly effective high school program for young high school age women, please let me know.

Downloadable documents:

Impact Report, Board List and More

School Information Sheet

Photographs illustrating this article are courtesy of Adobe Spark.

 

 

 

 

 

No Time Like The Present: Disaster Planning Helps Your Nonprofit and Community

My experience with most nonprofit organizations is they are short staffed and constantly trying to do more with less. The Urban Institute notes that approximately 66.9% of nonprofits in the United States have annual expenditures under $500,000. And the number of nonprofits in America continues to grow each year. That’s a good thing!

The nonprofit sector as a whole packs an economic punch. The National Council of Nonprofits asserts, “Nonprofits employ 12.3 million people, with payrolls exceeding those of most other U.S. industries, including construction, transportation, and finance.” Further, “Nonprofits also create work opportunities for millions of individuals above and beyond the millions they employ directly.”

This comment is eye-opening:

“Have you ever noticed how brochures for local chambers of commerce often identify local nonprofits as a top reason for businesses to locate there? Many boast about beloved cultural amenities, such as nonprofit museums and performing arts venues. Other common features are nonprofit colleges to showcase the value of an educated workforce and nonprofit healthcare facilities to reinforce a commitment to well-being. While the brochures seldom label these local icons as being ‘nonprofits,’ business leaders intuitively recognize the immense value that local nonprofits contribute to the community’s quality of life.”

Yet, why do our elected officials and those seeking elected office continue to ignore nonprofits? I have noticed during the recent campaigning how few times nonprofits and their work are mentioned.

Recent statistics on volunteer service in America are astounding. The Corporation for National and Community Service finds 77.4 million Americans volunteer annually. What would it be like to pay those volunteers for their service? That would mean America’s bill would amount to $167 billion! Our nation owes volunteers a debt of gratitude. In fact, America remains great in large part because of volunteer service. We are getting the job done.

Turning now to the importance of disaster preparedness, I had the good fortune to be part of a Texas team working with TechSoup to develop a disaster preparedness course last year. The program – available online and constantly updated as new information becomes available – was funded with a grant from the Center for Disaster Philanthropy. The project focused initially on nonprofits recovering from Hurricane Harvey in 2017, but the information applies readily to any nonprofit organization, anywhere in the world.

One point I made to the curriculum team and to our first class of students is that nonprofits continue to assume greater importance in the lives of the citizens of our state and nation. America’s Charities notes that today, “71% of surveyed employees say it is imperative or very important to work where culture is supportive of giving and volunteering.”

The work your nonprofit does in the community – whether feeding the hungry, encouraging pet adoption, exhibiting works of art, conserving wildlife habitat or teaching coding – makes for a thriving community where people want to live and work. Nonprofits are no longer just an “option” for healthy cities and communities today. We must have them.

Clouds

 

Along with the growing importance of nonprofits across our nation comes a responsibility. Because an ever-growing number of people turn to nonprofits for greater meaning in life and a sense of “belonging,” nonprofits must protect their staff and constituents. By preparing in advance for potential emergencies, you show you care. And by caring, you increase your chances of attracting more volunteers and charitable donations, which leads to a stronger, more vital organization as time moves forward.

I suggest nonprofits include the organization’s disaster plan in the staff “onboarding” process, and in volunteer orientations. Review the plan once a year with all of them. Don’t keep moving so fast and become so focused on individual tasks that you forget the bigger picture and the role your nonprofit plays in the community. You might also invite local disaster response professionals to visit your facility and to become familiar with it, so that if and when an emergency occurs, they can respond more easily.

Members of your community have your organization in their hearts and minds. Your nonprofit is also part of the economy, although you may not realize it. You both provide goods and/or services and you hire staff, rent/own a facility, and purchase goods in order to operate. You also convey a positive public image that makes the entire region shine.

The sooner you get back up and running after a disaster, the better the entire community will be. Be a leader. Don’t scramble when disaster strikes. Be ready, be prepared!

In mid-February, our TechSoup curriculum team held an in-person workshop in Houston. To view a few Instagram photographs from the event, follow this link to my WordPress photo blog.

If your community would benefit from some in-person coaching, reach out to anyone on the team: Gray Harriman, Shuya Xu; Dhruv Khattar; Joe Hillis and/or me. And sign-up to take the TechSoup course today. There are recorded and written components, downloadable “prep” documents to make your planning easier, and as you move through and finish each section, there are certificates of completion.

It is also my hope that our elected representatives will take the time to learn about the importance of nonprofits to society. We are an essential part of healthy, thriving American communities from coast to coast. Let’s all recognize that fact, and keep the good work going.

In closing, from Nonprofits Source (a private company), I would like to share a few eye-opening statistics from the website. These figures underscore the growing importance of nonprofits to society as a whole, and hence, why disaster preparation is so important for your nonprofit. We have work to do ….

Did you know:

  1. Corporate giving in 2017 increased to $20.77 billion—an 8.0% increase from 2016.
  2. Corporate giving was bolstered by $405 million in contributions related to disaster relief.
  3. 79% of companies reported increased donor participation rates and 73% raised more money.
  4. $5 billion = approximately how much money is raised through workplace giving annually.
  5. More than 49% of nonprofit respondents identified workplace giving as a growth strategy for their organization.
  6. 90% indicated that partnering with reputable nonprofit organizations enhances their brand and 89% believe partnering leverages their ability to improve the community.
  7. 9 out of 10 companies offered a matching gift program.
  8. An estimated $2-3 billion is donated through matching gift programs annually.
  9. Corporate matches of employee donations were 12% of total corporate cash contributions.
  10. An estimated $6-$10 billion in matching gift funds goes unclaimed per year. (!)

The image on this page was made with Adobe Spark.

 

 

 

 

 

During Good Times, Don’t Forget to Prepare for Rainy Days

“A recession is a significant decline in economic activity that goes on for more than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country’s gross domestic product (GDP), although the National Bureau of Economic Research (NBER) does not necessarily need to see this occur to call a recession.” – Investopedia

This post on Carolyn’s Nonprofit Blog was written in the fall of 2018. I continue to update it with important discussions as they become available. See the links at the conclusion for more information.

I have read quite a few articles and watched videos featuring leading financial experts who are discussing the possibility of a recession. White opinion remains divided, the thought that several predict a recession causes me to revisit the idea of nonprofit organizations establishing “rainy day,” or reserve funds.

From USLegal, “A reserve fund is a fund of money created to take care of maintenance, repairs or unexpected expenses of a business.” 

Having watched nonprofits suffer intensely during the last recession of a decade ago – the magnitude of which we all hope will never be repeated – my advice for nonprofits during this busy year-end fundraising season is to be prepared.

Take some of those year-end charitable donations and sock them away into a savings account or other fund where you can get to them easily if and when needed.

Rainy

Food for Thought | Noteworthy Media Coverage (Most Recent First)

Brainy
Thomas Fuller, English clergyman (1608-1661)

National Council for Nonprofits, “Operating Reserves for Nonprofits” (timeless advice, helpful resources)

I have an article on Carolyn’s Nonprofit Blog called, “Economy and Philanthropy” you might also enjoy. It dates back to when I launched my blog during the economic downturn of the late 2000s and early 2010s. Looking back to those days, I would also say, not every business nor philanthropist suffers during a recession. Adjust your fundraising accordingly and do your research.