Today, Cecilia Muñoz, Director of the Domestic Policy Council, joined by businesses and community leaders from across the country at the White House Summit on Financial Capability and Empowerment, announced new private- and public-sector commitments to improve financial literacy and capability for all Americans. The Administration also unveiled a new resource guide for schools, colleges and universities, employers, and community leaders to help them create their own capability initiatives aimed at empowering Americans to better understand and address financial matters, from saving for retirement to managing credit.
“Across our country, millions of Americans work hard and play by the rules to protect the gains they have made and secure a brighter future for their loved ones” said Cecilia Muñoz, Director of the Domestic Policy Council. “The resilience and ingenuity of our people are driving our economic recovery, and as we lay the foundation for an America built to last, we must also promote the ability of all Americans to make financial decisions that help them gain a footing into the middle class, kinder their entrepreneurial spirit, and sustain our long-term economic stability.”
“After what we’ve learned from the Great Recession, now more than ever we know the importance of empowering more Americans with both financial literacy and clear, basic financial information to not only protect them from devastating personal outcomes but also to prevent dynamics that can harm the entire economy,” said Gene Sperling, Director of the National Economic Council.
In addition to the resource guide, a new, interactive tool for youth and parents to learn important financial lessons from ages 3 to 18+ was officially launched. Money as You Grow, created by the President’s Advisory Council on Financial Capability, uses easy-to-understand language and includes behavior-changing activities around 20 key money concepts.
Studies show young Americans, low-income households, Latinos and African-Americans present particular vulnerabilities in financial capability. Approximately one in three Latinos and African-Americans do not have a bank account and nearly a quarter approach retirement with less than $1,000 in total net worth, excluding pensions and Social Security. Young adults, ages 18-29, are more likely to pay the minimum payment only on their credit cards, rapidly accruing debt.
The 14 new commitments, aimed at helping thousands of Americans access information and tools they need to make responsible financial decisions, were made by companies and organizations across the public, private and non-profit sectors, including:
REACHING CITIES & COMMUNITIES
•National Conference of Black Mayors: The National Conference of Black Mayors (NCBM) announced that more than 80 Mayors have committed to stand up local Financial Literacy Councils before the end of 2012 with goal of 100 cities. These Financial Literacy Councils will serve as a local one-stop shop for financial dignity, financial capability and empowerment, for youth, consumers, and businesses. For the full list of cities, please click here.
•Allstate: Allstate committed to providing $1 million to support state domestic violence coalitions in their work to provide innovative financial services to survivors of domestic violence in order to help empower them to make financial decisions on their own.
•Charles Schwab Foundation: The Charles Schwab Foundation committed $1 million over two years to co-develop with AARP Foundation a financial education and mentoring pilot program designed to help vulnerable older workers and job-seekers set goals and implement action plans to reduce debt, repair credit, build savings and regain control of their finances. The program will be delivered through select nonprofit partners in six cities – Washington, D.C. metro area, Austin, Denver, Phoenix, New Orleans and San Francisco. Launching this summer, the pilot program has a goal to mobilize 300 volunteers and reach 6,000 participants in the first year.
•HelloWallet and Marsh & McLennan Companies: In cooperation with Marsh & McLennan Companies, HelloWallet, a technology start-up that provides unbiased financial guidance to workers at leading U.S. employers, has committed to donating 20,000 two-year subscriptions to non-profit and government organizations to help a variety of Americans in need improve their well-being and manage their financial responsibilities. The value of these memberships is worth more than $4 million, which HelloWallet expects to generate at least an estimated $20 million in new savings for individuals and families in need.
•MasterCard: MasterCard is making two new community-based announcements: 1) the creation of ‘Your Money Smarter’, which is a new regional financial inclusion and education program that delivers basic and useful tips about budgeting, tracking, saving and spending money and understanding financial management tools to communities in the US via text message and is a scalable platform that will be tested with 18 community organizations in the U.S. and then eventually rolled out nationally; and 2) the ‘PayPerks for Public Sector’ program, which is an optional feature of MasterCard’s federal, state and local government prepaid card programs that fuses online education with sweepstakes-based incentives in order to provide consumers with information on the most effective use of their government-sponsored prepaid cards.
REACHING AMERICA’S YOUTH
•Chicago Public Schools and Discover: The Chicago Public Schools (CPS) is announcing a K - 12 Financial Literacy Framework that will launch during the upcoming 2012-2013 school year with a 12th Grade Personal Finance Capstone Course. Once fully operation, the initiative will begin equipping more than 400,000 students each year with the knowledge, skills and tools to become informed and active citizens in a global society and to make wise financial decisions. Funding for the course is being provided by a $1 million grant from Discover Financial Services as part of the company's effort to bring financial education curriculum into public high schools across the country.
•Denver Public Schools and Operation HOPE: Denver Public Schools is launching a new effort to increase student financial literacy in Far Northeast Denver to connect more than 1,500 low and moderate-income middle and high school students with business executives from across the city. Students will learn the ins and outs of running a small business through these mentorships, and then will get their chance to start their own operation. Student businesses will then be tracked by Gallup using the Gallup-HOPE Index throughout the year to determine how successful their individual projects are. The goal is to teach students how to create financial goals, set budgets and then work within their means as they try to accomplish their goals in a project-based environment.
•Oakland Unified School District and Operation HOPE: Oakland Unified School District (OUSD) is expanding their partnership to deliver “Banking on Our Future” financial literacy education to every 4th - 12th grade student, approximately 14,000 students, in the Oakland Public Schools. This project will launch the Gallup HOPE Index and the HOPE Business-in-a-Box initiative. The project will consist of small businesses and entrepreneurial endeavors run by students which are easy to start, fund and operate and tailored for the interests and capabilities of Oakland youth. The Gallup HOPE Index will measure each student's level of hope, well-being, engagement, financial literacy, and economic energy.
•AOL and the Network for Teaching Entrepreneurship: AOL’s Cambio.com is launching a new content hub focused on helping teens create businesses and learn to make smart financial choices throughout their lives. The destination has the potential to reach 1 million teens monthly through the Cambio Network. At the outset, Cambio and the Network for Teaching Entrepreneurship (NFTE) will collaborate to allow teens access to NFTE’s soon to launch MakeYourJob.org – a five step process to start a summer business – that includes inspiring videos of fellow teen entrepreneurs on Cambio.com. AOL will also give a select number of teen entrepreneurs competing in NFTE’s National Youth Entrepreneurship Challenge the opportunity to present their business ideas on stage at TechCrunch Disrupt-NY in September 2012.
•Bank of America and National College Advising Corps: Bank of America is investing $1 million over the next three years in the National College Advising Corps (NCAC) to assist more than 100,000 students and their families to better understand FAFSA resources and financial management, with the goal of helping students manage financial debt more effectively and decrease the burden of student loans. NCAC’s primary goal is to raise college enrollment and completion rates among low-income, first-generation-college, under-represented high school students.
•MasterCard and the Network for Teaching Entrepreneurship: MasterCard and the Network for Teaching Entrepreneurship (NFTE) are announcing the expansion of its partnership in order to help realize the goal of providing entrepreneurial training and resources to more than one million children by 2017. With an expanded grant of more than $1,000,000 for the 2012-2013 school year, MasterCard will support the modernization of NFTE’s core curriculum. MasterCard will also serve as founding sponsor of the inaugural NFTE 2.0 Innovation Incubator to be unveiled in St. Louis later to help youth develop innovative businesses.
REACHING WORKING AMERICANS
•Allstate: Allstate has committed to providing each of its more than 30,000 employees with a financial wellbeing self-assessment tool, which is currently under development. Not unlike a health assessment tool, this program will enable Allstate’s employees to gain a better understanding of their personal financial situation. In addition to the tool, Allstate will provide its employees with free financial capability services, such as credit counseling, that will be tailored to their needs.
•American Express: American Express has committed to create a Virtual Smart Saving Fair to encourage employees and their families to engage in the financial tools and resources provided by American Express. The initial rollout to American Express’ 4,000 plus employees that do not work from an office (virtual employees) will be followed by a broader rollout to 27,000 U.S. employees and their families.
•Visa Inc.: Visa is committing to provide comprehensive personal finance education resources to all 7,500 of their employees by the end of 2013. Every Visa employee will receive their own financial literacy tool kit, a comprehensive collection that will include a broad array of tutorials, interactive calculators, videos and podcasts for them and their family. Visa will also create a web-based financial education resource center on the company’s Intranet site. Finally, Visa will provide free educational materials to all other organizations participating in the Summit who are making similar workplace-based financial capability pledges.