From Entitlement To Gratitude
Philanthropy At A Crossroads
By Nathan Dungan
Copyright © 2005. All Rights Reserved.
Reprinted here with permission from the author.
As soon as I posed the question to the fourth grade class in suburban Philadelphia, the surge of energy was palpable as their minds spun with the overwhelming number of possible answers. "If someone gave you $100 with no strings attached how would you use it?" My objective: to see how their financial habits (i.e. how they share, save and spend money) were taking shape. As they worked to complete the five-minute assignment, the thirty-one sheets of paper were quickly filled with words and pictures that might foreshadow the future of philanthropy.
Since 1990 I have asked the above question to thousands of young people across the country. And with each passing year I am more convinced that philanthropy is headed for a swift and significant decline unless we stem the tide of hypnotic consumption.
Consider the following:
- There are nearly 80 million young people under age 25 in the U.S. -- almost one-third of our population. (American Demographics)
- They spend and influence the spending of more than $1 trillion dollars a year in our $10 trillion dollar economy. (Prodigal Sons & Material Girls)
- Young people spend five times more money than their parents did at the same age -- adjusted for inflation. (KGA Communications)
- The average 21-year-old has been the recipient of more than 23 million ad impressions (i.e. spend messages) during their lifetime -- that's roughly 3000 a day. (American Demographics)
Young people are being "taught" to spend and influence household spending before they can form complete sentences. With a lifetime of purchases in front of them, the competition is fierce for shaping the financial habits of America's young people. In fact, many consumer product companies frequently work with ad agencies and child psychologists to formulate strategies that exploit children's emotional vulnerabilities all in the name of triggering a spending behavior.
A generation ago, the Federal Trade Commission considered restricting advertising aimed at children, but in 1980, Congress passed a law preventing such action. Since then, the amount of money spent by advertisers to reach children has increased by a factor of 20 -- from $100 million to over $2 billion a year. Children have become the hottest targets of today's marketing dollars. Our society is working overtime to addict young people to spending and the social and economic fall-out could be staggering. For an indication of what lies ahead, consider the financial habits of young adults in this mammoth demographic group:
- The average college student has four credit cards and $3,000 of credit card debt. (Nellie Mae)
- 20 percent of college students have $3,000 to $7,000 of credit card debt -- an increase of sixty percent in the last three years. (Nellie Mae)
- Young people under 25 are the fastest growing age group filing for bankruptcy in America. (Harvard University)
- Bi-annual research of high school seniors shows the overwhelming majority are financially illiterate. (Jumpstart Coalition for Personal Financial Literacy)
Note that I have not yet mentioned the other two critical financial habits -- sharing and saving -- that are essential life skills for young people and for our society. That is because unless a young person has the good fortune of being taught those values in the home, those habits will likely suffer from extreme malnutrition.
We can do more. Young people need the village -- families, nonprofits, educational institutions, the government and businesses - to stand up and take notice that everybody wins when they have a balanced diet of healthy financial habits. I call it the Share-Save-Spend system.
Curiously, the approach is not new. My grandmother who just celebrated her 95th birthday has been living the philosophy her entire life -- Share, Save and then Spend. For her and others I have met, the success comes in the prioritization and in the routine. It's not a philosophy they use when it is convenient rather it is a lifestyle that defines the role money and things play in their life.
And for families today that have adopted the, dare I say, countercultural approach the success has been significant. Young people who couldn't keep two quarters in their pocket and repeatedly fell prey to the entitlement mantra are now managing their money and sharing their resources with great success and satisfaction.
The following are a few ideas that might help jumpstart your conversations for talking and teaching about money:
The Share Save Spend System for Developing Healthy Financial Habits
- Lead with Sharing -- By sensitizing children to the needs of others you will teach them gratitude for the thin-gs they have.
- Set Saving Goals -- Use goal setting to counter the "I wants." If your child wants something, let them save for it. The patience and discipline instilled will be invaluable when saving for big ticket items like a car and a home later in life.
- Raise Their Marketing IQ -- Consumer product companies are playing for keeps in shaping children's financial habits. Spend time together analyzing the techniques companies use to trigger spending behavior.
- Walk the Walk -- Your financial habits will shape how your children use money for decades. Periodically review that your habits -- Share Save Spend -- match your desired outcome.
After fifteen years and thousands of conversations with young people and their parents, I have learned that they will rise to the occasion when informed about needs and more specifically asked to contribute. Two quick examples from organizations I volunteer for will help illustrate my point.
In early 2003, the Alumni Board of St. Olaf College (MN) challenged a group of senior leaders and in turn the entire class of '03 to participate in the senior giving campaign – which is a three financial pledge. The result: a 52 percent participation rate. A remarkable 41 percent increase over the class of 2002. The next year the class of 2004 built on that momentum and exceeded all expectations with a remarkable 81 percent of the class pledging to the senior campaign.
Youth CARE (Cultural Appreciation Racial Equality) is a small nonprofit based in the Twin Cities that serves urban youth of low to moderate income families from racially and culturally diverse backgrounds. One of their award winning programs is a camp on the scenic St. Croix River. This past summer (week two of camp) I spent a morning with eight junior counselors (also former campers) talking about money and how financial habits are formed. Not only was it their first paying job, but for most the money earned would be used for needs not wants. At the end of our session, I asked them to consider pooling some of their money to share with the camp at the end of the summer. On the final day (week ten), they made a surprise presentation to the Camp Director of $230. She was overwhelmed with their demonstration of gratitude.
In both instances, the formula for success was quite simple: ask questions, share knowledge, establish a common vision and create a plan. While one person may not be able to counteract the enormity of Madison Avenue, if everyone does their part to help young people develop and maintain healthy financial habits their world, our world and the future will be much, much brighter.
About The Author
Nathan Dungan is president and founder of Share Save Spend, LLC an organization that helps people develop and maintain healthy financial habits. Nathan's book, Prodigal Sons and Material Girls: How Not to Be Your Child's ATM (John Wiley), was released in 2003. He's been widely quoted in The New York Times, The Washington Post, USA Today and TIME. Prior to founding Share Save Spend, Nathan was a top-performing financial advisor and VP of Marketing for a Fortune 500 financial services company. He speaks and consults for organizations and families related to this topic.
Web Site: Share Save Spend
