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!

Thursday, August 29, 2013

Make That Investment Now!

Your Dream Scenario
Imagine it is the day before Google officially incorporates and their co-founders, Larry Page and Sergey Brin, approach you to ask for an investment in the inchoate company.  And let's further suppose that, though you can't possibly imagine how profitable Google will eventually become, you do know a few things: the co-founders are geniuses and have a brilliant idea; the Internet is going to see exponential growth over the next decade; searching for content online is currently painstaking; and Google's search algorithm is so powerful that people are going to prefer it, use it frequently, and therefore enable the company to sell a lot of ads.

Knowing all this, you'd be insane not to make that investment right then and there, no?  After all, the return on your investment would be so large as to be a waste of time for me to calculate!

Our Dream Scenario!
But now let's imagine that the investment we are talking about is in young children living in poverty.  Of course, instead of seeking a monetary return, your investment is in social good.  More specifically, let's say that you are looking to, I don't know, invest in our Financial Coaching + Schools Program!  Much as with Google, you know a few things going in: education is critical to breaking the cycle of intergenerational poverty; the greatest predictor of educational attainment is neither race nor gender nor geography, but rather income; there is a strong link between poverty, health and education; a high percentage of low-income Americans lack access to the formal financial sector; and our current approaches to reforming our educational system have been incomplete.

At the same time, there are things you don't know.  Will this particular intervention work?  How does the FC + Schools Program fit into the broader education reform landscape?  Is the program scalable, and if it works in one place, is it likely to work in another as well?  But then you say to yourself, "New approaches are needed to a serious problem.  The Program is well thought out, is based on peer-reviewed data and, best of all, they are running a randomized control trial--so either the Program works or it doesn' hiding behind feel good stories.  I'll make a small contribution."

Up The Ante
Now I come to you and say, Great!  I'm so happy to hear that you are willing to invest in our work.  But let me tell you about why you should contribute even more. A recent NY Times article titled 'Status and Stress' really captured just how important our work is.  The author, Moises Velasquez-Manoff, uses a lot of scientific research to effectively argue that poverty in general, and the stress it induces in particular, has grave consequences.  Why? In part because, unlike the wealthy, the poor lack a sense of control over their stressors.  In other words, we all face stress, but findings suggest that "The more helpless one feels when facing a given stressor...the more toxic that stressor's effects."

Not only does the stress of being low-income have immediate effects, but "even those who later ascend economically may show persistent effects of early-life hardship."  In other words, if we are going to empower a family, the best time to do so is when the children are still young.  And if you don't think that the implications of not making this kind of investment aren't far-reaching, consider that "Those without a high school education haven't experienced much improvement in life span since the middle of the 20th century."

Sealing the Deal
So as you can see, what we are doing is striking at the roots of poverty.  After all, by virtue of doing a budget, managing debt, building credit and gaining access to a bank account, we immediately give a family a sense of control over financial stressors.  Adding in the health coaching, where we talk about getting a primary care doctor, budgeting to ensure food security, healthy eating and exercise and illness management, serves to further empower the client.  Our theory of change is that working with parents in this way will help the kids do better in school.

Sometimes it's hard for the non-poor to understand what the less fortunate experience.  Mr. Velasquez-Manoff argues that "If you're an underpaid, overworked parent--worried, behind on rent, living in a crime-ridden neighborhood--your parental skills are more likely to be compromised."  Yet the research seems to show that even if we only give that parent a little more sense of control of her circumstances, a little less stress about her finances and health, she'll have more time and energy to support her child.  And if this helps her child do better in school, she is more likely to go to college, to get a good job, to have a happy and healthy life, and to leave poverty behind her for good.

So, in closing, what do you say about making that investment now?"

(To invest in the Schools Program, simply click here!)

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