Social change work is hard and frustrating and wonderful and terrible; it is also, at times, funny, quirky and just plain fascinating. With this blog we hope to capture all that goes into what we do at Capital Good Fund, and we invite you to join the conversation!

Saturday, October 27, 2012

The Role of Youth in Tackling Poverty

I'm currently in New Brunswick, New Jersey for the 4th annual Lend for America Summit, which is geared towards inspiring and guiding college students from across the country to start and expand organizations that serve America's poor and create economic opportunity for them.  Part of the reason why I am here, giving a talk to dozens of enthusiastic, bright young people, is that we will never solve the endemic problems of poverty, injustice, etc., unless more people graduate college and go into government, social enterprise, or non-profit work.  This is not an opinion, but rather a fact: young people were one of the primary drivers of the civil rights movement, the anti-war movement against Vietnam, and countless other initiatives that fostered a more just society in America.  What's more, youth helped spur the recent Arab Spring, led to the downfall of the Shah of Iran, partook in the Orange Revolution in Ukraine, and so on.  These are just a few examples of the ways in which young, predominately educated people have made the world a better place.

But more needs to be done.  We now live in a country where, despite being the wealthiest in the planet, 1 out of 3 Americans are either in poverty (46 million) or at 150% of the poverty line or below (54 million).  That number is breathtaking, shocking, unimaginable.  We think of America as being the land of opportunity, but the sad fact is that if you are born in poverty here, you are likely going to die in poverty, and your children will live and die in poverty as well.  We focus on the few 'rags-to-riches' stories, and mistakenly assume that hard work alone is enough to move ahead.  That simply is no longer the case, in large part because the high-paying jobs of today require a college education (or more), and those living in poverty are far less likely to go to good public schools, and far less likely to be able to afford, or go to and graduate from, a four-year college.  As a result, America's poor are stuck in low-wage, low-skill jobs with little-to-no upward mobility.

Tuesday, October 23, 2012

Spending on Elections: The Paradox of a Bad Investment

Every time we make a decision about how to spend or invest our money, one of the fundamental cost-benefit analyses we conduct is the following: for every increase in 'unit' of spending, what will be the expected increase in value? At some point, our own budgets, the quality of the product we are seeking to purchase, the law of diminishing returns and other behavioral and psychological factors--marketing, social pressure, etc--lead us to a choice. Generally speaking, when we spend more we expect to get more.

Consider, for instance, the electric shaver I recently purchased. After doing my homework, I narrowed the choice down to three (3) models of Braun shavers (and no, I'm not being paid to advertise for Braun!): the Series 3, which costs $70, the Series 5, which costs ~$150 and the ~$200 Series 7. Looking at the features and price of each, I decided that the Series 3 lacked some of the things I needed, and the Series 7 came with whiz-bang technology from which my face would never benefit. Put another way, had I spent the extra $50 on the Series 7, the marginal return would not have justified the additional price.