Payday Lenders Want Your Business!

A Great Offer?
One of my employees recently received a seemingly exciting offer: pre-selection for a loan of up to $450 from Check 'n Go, one of the largest payday lenders in America!  Given that she works for a company keen on putting them out of business, it seems like they did a poor job with their marketing strategy, no?  This got me thinking, though.  Have you ever noticed that middle to upper-middle income individuals are bombarded with credit card offers in the mail, not to mention the constant barrage of TV and radio ads asking them what's in their wallet and shouting, "Cash back rewards," and "Bonus miles"?  Or that if you are lower-income you can't take a step without seeing bright neon signs, flyers, mailers, and radio and online ads practically thrusting "Instant Cash!" into your hands?  Those least able to afford it are encouraged to make use of the most expensive products, often delivered by companies all-too-happy to hide fees, engage in predatory or illegal practices and wring every ounce of profit from the financially insecure.

Is It Worth the Drive?

Image Credit: Senor Anderson

This morning Jake (my VP of Accounts), Rachel (my Head Financial Coach) and I drove out to the University of Rhode Island for a meeting with Dr. Jing Xiao, a professor of family finance at the university. The meeting was fantastic: Dr. Xiao is a leading expert in consumer financial behavior, and he had a lot of insight into ways in which we can strengthen our Randomized Control Trial (learn more about it here) and find more research into the efficacy of Financial Coaching programs.  We also talked about the possibility of him, or a colleague of Dr. Xiao, serving as an External Evaluator for the study, something we'll need as we look to publish our findings in a peer-reviewed journal in early 2016.

We All Want Impact Data...And We Rarely Have It

Nowadays you can hardly throw a rock at the nonprofit sector without hitting the words "data driven," "outcomes based," "evidence based," or some other terminology referring to the desire to understand the efficacy of a given intervention. It makes perfect sense: given the roughly $30 billion / year that is donated to social service organizations, it's critical that we know if those funds are making a difference. However, in the rush to quantify impact, something extremely fundamental has been forgotten: it is shockingly expensive to collect, analyze and report this type of data, and the vast majority of nonprofits lack the funding to do so.

Photo Credit: refinerysource.com

The simple fact of the matter is that when we talk about impact, we are usually referring to outputs: 'X' number of people receiving loans or 'Y' number of budgets built.  We may go a step further and say that the average increase in FICO score of our clients is 75 points, which is true (and we are proud of that), but it's also misleading because, as far as we know, that's only true of the clients we are able to reach for follow up surveys.  In other words, selection bias--the people most motivated to improve their credit are also the most likely to stay in touch long enough to do a survey--skews the numbers in our favor.

Social Media Lessons From A CGF Rookie

Guest Writer, Ashley Lynch

In my experience there tends to be a lot of built up anticipation when starting a new job. You barely know anyone and hardly know what to expect. The mind starts to stir up questions like, “Will I be liked?” “With whom will I eat lunch?” “How on Earth will I remember all these names?” Fact is, being the new kid on the block can be tough.

Boosting CGF’s social media is one my primary fields of interest. In my beginning weeks, I began to expand our social media platforms to sites like Instagram, Pinterest, and StumbleUpon. You might start to wonder, “What does Instagram have to do with the mission of a nonprofit?” Well, it is important to get the word out there. The more information about us we put on the web, the more likely we are to be seen. Posting pictures about what people are doing around the office, or what kind of decorations are displayed, might seem silly, but they catch people’s attention and add a personalized touch to our organization.

Fortunately my transition into the role of Marketing Officer at Capital Good Fund was smooth. On my first day I was taken out for lunch. I met pretty much the entire staff and found everyone to be friendly and welcoming. Setting up accounts and learning new technology took up a lot of time at first, but after the first week I was able to jump right into productive tasks. 

After all, how can people get involved with us if they don’t know about our work? Sharing the stories of the family in need of a loan to keep the lights on, or the survivor of the domestic violence in search of a loan to move into a safe apartment, serves to galvanize our supporters. These stories are why I chose to come work for CGF. I love that everyday I am granted the opportunity to be a part of the cause to end poverty.

So yeah, social media is a great marketing tool to network with donors, clients and other supporters. It’s free, manageable, and, if done right, guaranteed to bring results. In conclusion, my next post is dedicated to the man or woman out there trying to put food on the table for their children, and the person trying to fix their expensive car repair, so they don’t get fired from not being able to arrive at work on time, and lastly, to the everyday hard-working American who is just trying to get by and make ends meet. As the new Marketing Officer at Capital Good Fund, I promise to not only promote our wonderful services, but to spread the word to the rest of the world...here at CGF, there is hope!

How To Turn Your Idea Into An Organization

Image Credit: MDGovpics

If you're like me, you have a ton of ideas for how to make things better: perhaps a neighborhood

beautification project, a tutoring program, a community-owned healthy grocery store, or a peer-to-peer car sharing service.  Some of these ideas require little more than a meeting with friends or the purchase of tools; after that, it's time to get to work!  But other ideas are more involved and complicated and likely require that a legal entity be formed.  This post is about how to decide if you need to create a formal organization and, more importantly, how to go about doing so.

First, let me make clear that I am not providing legal advice.  You should always consult an attorney before making, well, a legal decision! That said, here are some basic things to consider before going the legal entity formation route:

The Banality of Good

The Berlin Holocaust Mermorial: affnpack

The banality of evil is a term coined by the Jewish political theorist Hannah Arendt.  Writing about the trial of Adolf Eichman, a lieutenant colonel in the infamous Nazi SS who played a critical role in the Holocaust, she notes that "aside from a desire for improving his career, Eichmann was not driven by antisemitism or psychological damage...the phrase refers to Eichmann's deportment [at his trial], displaying neither guilt nor hatred, claiming he bore no responsibility because he was simply 'doing his job.'"

The banality of evil need not only apply to war criminals.  As I mentioned in my last post, Financial Injustice And Racism, where once social ills were visible in the street and unavoidable--'Whites Only' signs, the Cuyahoga River catching fire because of pollution--now they are perpetuated by respectable people working for respectable institutions leading respectable lives.

Financial Injustice And Racism

Photo Credit: Franco Folini

Sometimes I feel like people hear that we do consumer financial services for the poor and start to lose interest. And I get it: unlike a food pantry, homeless shelter or community health clinic, it's hard to see the direct link between loans, Financial Coaching and free tax preparation and the needs of the poor.  As I often point out when I give talks, the founders of social change organizations tend to have a bit of a martyr complex.  That is, they want to feel that what they are doing is a matter of life and death for those they serve.  When I was starting CGF, for instance, I initially questioned whether poverty in America was severe enough to warrant dedicating my life to eradicating it; after all, unlike some countries in Africa or Latin America, we don't have people dying of malnutrition and water born diseases.

American Poverty
Sadly, the more I've learned about American poverty and inequality, the more I've learned that, yes, in absolute terms it's not the same as in "developing" countries, but in relative terms, it's an endemic crisis of injustice.  One out of three Americans live at 150% of the poverty line or below; ~50 million don't get three square meals a day; we have the highest rate of incarceration in the world (25% of all prisoners in the world are in the US); the average black household has one-tenth the wealth of a white household; and on and on and on.