A Frank Discussion About Money

Cut The Euphemisms
I feel that so much of our modern lives are shrouded in euphemisms that rarely do we say what we mean; instead we hide behind safer language, safer feelings.  Beer and shampoo and a host of other consumer product commercials imply that use of the product will result in dates, in sex, in beauty, in success.  To sell sugar water Coca Cola shows us polar bears enjoying the beverage: let's make something lacking any nutritional value seem cute and refreshing!  Exxon doesn't rapaciously exploit natural resources: it "delivers value" to its stakeholders.  The wealthy get preferential treatment (11% taxes on capital gains!) not because they have the clout to lobby for that treatment, but rather because they are job creators.  Financial institutions behind the global recession are spared criminal suits, not because they have the power to intimidate the government and the legal team to fight it, but because they are too big too fail.  Benefits and programs to support the poor and middle class--food stamps, unemployment insurance, job training, infrastructure improvements--are continually whittled down, not because they lack political power...No! It's because government is too big and they are too dependent on government largesse.  And so on.

You Gotta Plan...And You Gotta Believe

More Than A Plan, More Than a Dream: A Belief
Martin Luther King didn't just have a dream, he had a plan: marches, sit-ins, legislative advocacy.  But no amount of dreaming, and no amount of planning, could comfort him when the death threats rained upon him, when the Churches were bombed and the dogs set loose; no, in those all-too-frequent (if not constant) moments, he needed something else: belief.  Belief that was not always justifiable; belief that strained the bounds of credulity; belief that he almost certainly struggled to believe himself.  Yet that belief remained, and it resonated in the hearts and minds of the countless thousands that risked their lives for justice, and it resonated even in the hearts and minds of those who would prefer to look the other way--but couldn't, because the Civil Rights movement forced them to...forced them to believe that change was coming.

O, but it's so hard.  During the darkest days of the Cuban Missile Crisis, or the Battle of Britain, or the Civil War, or the American Revolution, or the myriad other events that shaped history, how many times did the way forward seem impossible, unthinkable?  How often were the best of plans laid to waste, the best thinkers proven wrong?  And yet sometimes, in the midst of strife--moments when all the roads to Justice have been washed away by a torrent of hopelessness--a path is forged.  It is a path that defies logic, that shouldn't work...and then somehow does.

What Do Our Customers Need?

I just finished reading a fantastic book titled Portfolios of the Poor: How The World's Poor Live on $2 a Day, a provocative look at how the poor actually related to and make use of financial services.  By meeting with hundreds of families every two weeks for a year, the authors were able to not only understand how much money they bring in per year--which is the number we usually hear of--but also what their cash flow looks like month-to-month.  As I've come to learn over the years, cash flow is king: it doesn't matter how much money you have, if the timing of inflows doesn't match the timing of outflows, you've got a problem!

Guest Blog Post: Mintaka Angell, Financial Coaching Fellow

While many students can attest to emphasizing service work on their college applications, it seems that this focus begins to slip soon after the "submit" button is clicked. The US Bureau of Labor Statistics, for example, recently found that overall levels of volunteerism were declining in America - with the lowest levels of service prevalent among 20-24 year olds. With raising college tuition and ever-increasing stress to conform to a specific set of criteria for the job market, it's easy to understand why fewer college students are finding the time to participate in social justice and change. However, there are several reasons that service is invaluable, no matter a student's situation.   Not only is it a personally enriching experience that deepens communal connections, fosters new friendships, and allows for each person to contribute towards positive change in their community, is also opens a series of perspectives vital for the next generation of leaders to understand. Here are five (5) reasons that service and social justice work are an irreplaceable component of every college student's education:

Applying The Business of Behavior Change…To CGF and Myself!

What Are We About?

I’ve thought long and hard about what Capital Good Fund is really about.  Yes, we provide financial services to low-income families and we often say that we are about financial empowerment.  But that’s about as imaginative as saying that Apple is about selling software and hardware. No, if you really want to explain why Apple is the most profitable company in the world, you have to understand that, in essence, they are in the business of delivering a magical experience to its customers.

Does that sound hyperbolic?  Like I’m just another Apple fanboy?  Maybe, but have you ever looked at the eyes of a child the first time she picks up an iPad and starts playing with it?  Have you ever considered why so many people spend so much money just to have a beautiful and functional object they can keep in their pocket or their backpack, even though there are equally good and cheaper alternatives out there?  Of course it’s because of advertising and consumerism—of course, but that’s missing the point.  And actually, irrespective of your opinion of the company and its products, the main point still remains: what Apple, or any other enterprise, produces and sells is not necessarily the same thing as what it’s about. As Simon Sinek puts it, people don’t buy what you do, they buy why you do it.

Financial Coaching Fellow Profile: Matt Hoisl

Matt Hoisl, a Junior at Providence College, is following in his father’s footsteps:  he too plans to enter the public accounting field, and he too is passionate about saving money. Given Matt’s interest in financial services in general, and empowering people in particular, the Financial Coaching Fellowship seemed like a perfect fit (it didn’t hurt that a friend of his had served as a Fellow and highly recommended it.)  That said, he had always been a numbers guy—more comfortable with data and spreadsheets than with people—so when he entered the Fellow training program he focused especially hard on the soft skills: interacting with clients, helping them set goals, being empathic, and leveraging the power of motivational interviewing techniques.

Mission and Revenue: A Balance

Money is King

Money is king, whether you are a for-profit, non-profit or government agency.  Without money you can't pay salaries, you can't pay the rent, and you certainly can't deliver products or services.  This is a truth that often masquerades as a dirty word in the social change sector...but it's still a truth.  Managing cash flow is the only way to keep the doors open at any organization.  I'd argue, however, that running a non-profit presents unique challenges, because not only do you need to meet payroll, you have to run programs for which it is inherently difficult to charge.

This creates a fundamental tension between the need to raise money and the need to change lives. How to maintain a balance between the two?  For me, it comes down to asking three questions every time we  make a decision: Will this have an impact on the client's life?  Will this make the client happy?  And will this bring in revenue?  These questions form a decision matrix: programs on which we lose money better have tremendous social impact; programs that don't have impact better make money; and regardless of what we do our customers better have a good experience.