financial literacy

Microfinance: An Overview

By: Sam Crawford-Cloonan
Sam is a participant in the Emerging Leaders in Philanthropy: Explorers class. 

Microfinance is when many donors, each giving a small amount, loan a relatively large sum of money (say, a thousand dollars) to an individual in need (usually in a developing country) in order to make a significant development in that individual's life. The development helps the individual pay off the debt incurred from the loan, and the money is given back to the donors.

I, personally, would invest in microfinance because it's an efficient and effective way of improving the quality of life (QL) of someone in need. The micro-entepreneurs are then able to break the cycle of poverty. Most of those asking for loans have just enough resources to support themselves  sufficiently, but not enough to improve Quality of life. This leads to a lack of ability to support oneself.

Individuals receiving microfinancial loans become able to support themselves and improve their QL. Loans are also more beneficial than a hand out because there is the added responsibility of being able to pay money back, thus the money is required to be used as a means of financial development rather than directly being used for day-to-day support.

For investors, microfinance is a way to give help to someone in need while still being able to make their money back. In that way, it's a very safe investment. A person can donate time and time again as their funds are replenished by micro-entrepreneurs who pay back their loans. Thus, if managed properly, the exchange is fully sustainable.

In conclusion, microfinance is a necessary part of today's world when it comes to linking local philanthropists to global issues on an individual scale, making the 'treasure' section of the pillars of philanthropy (giving time and talent and treasure) easily transferable and available. The next step? Bringing time and talent to that level of availability--and I'd love to see what this generation does to do so.

On an entirely separate note, my favorite experiences in ELP are the ones in which the students are able to have a natural discussion over previously discussed topics. Being able to ask questions and learn more about philanthropy, both local and global, is both necessary and freeing. 

Teen Discovers Financial Literacy and Personal Philanthropy

By: Ella
Ella is a participant in Allowance for Good's Winter 2015 Emerging Leaders in Philanthropy: Explorers class.

When I signed up for the ELP Explorers class, one of the words that jumped out to me in the course description was “financial literacy”. I had heard it before: it’s a “buzzword” often used in news articles or on talk shows, but not everyone knows what it means (I didn’t). But people often claim that it is severely lacking from our education system, and that teaching it may be the secret to preventing a good amount of our financial troubles. It turns out that financial literacy can mean a myriad of different things to different people, but fundamentally, it is the ability to understand financial matters, and how money works in general. However, many people don’t possess this understanding, as a 2008 survey shows that only 34% of parents have taught their child how to balance a checkbook.

In the most recent ELP class, we began to learn financial literacy by tracking our weekly spending and comparing it to our weekly earning. Many of us were surprised, and realized how little we think about spending money as teenagers. Financial literacy ties into personal philanthropy because it teaches us how to properly allocate and transfer funds. Also, keeping in mind my own spending highlights how severe needs are in the areas where we are trying to direct our aid to, and provides a sense of urgency to our personal philanthropy. For example, I will usually spend 7 or 8 dollars on food when I go out with my friends without a second thought. However, 2.7 billion people worldwide are struggling to survive on less than $2 a day, or a fourth of that amount. We also learned about AFG’s global affiliates, many of which combat similar situations: There’s the Liger Learning Center, based in Phnom Penh, Cambodia, a progressive school that provides opportunities for bright children living in poverty. There’s the Adonai Child Development Centre in Uganda for kids living among AIDS, war, and poverty. Finally, there’s Spark Ventures, which is Chicago-based and had a representative come in and educate us about their partnerships, such as Hope Community School. This is located in Zambia and provides the impoverished children of Twapia with an education. In future ELP classes, I’d be interested to learn more about what we can do to get involved with our global affiliates and how we can fundraise for them.


Ella writes, "I am a Catalyst for Good because no matter who you are or where you come from, you can make a difference."

Families Giving Back Together – the Case for Starting Now

By Sharmila Rao Thakkar

Sharmila Rao Thakkar oversees grantmaking and administration at a small family foundation in Chicago, IL. In addition to making funding recommendations, she provides technical assistance to foundation grantees, leads the board’s strategic planning and board development activities including stewardship of the next generation.  From her early days as a grade school hospital candy-striper to tutoring children as a teenager and now mentoring young professionals, Sharmila brings a keen awareness and passion to her nonprofit and philanthropy work.  She is honored to sit on the board of Allowance for Good, and also serves as a trustee of the Chicago Foundation for Women and leader for her daughter’s Girl Scout troop.

If you’re like many people, you likely do much of your charitable giving in the last quarter of the year, when you’re thinking about the holidays, the tax deduction, receiving donation requests or attending events and fundraisers that typically fall in the fall/winter.   It’s no coincidence that World Gratitude Day (September 21), World Kindness Day (November 13), Thanksgiving and as of two years ago Giving Tuesday (observed on the Tuesday after the post-Thanksgiving deal days) as well as host of other holidays that revolve around giving, thanking and gifting all occur during virtually the same time frame.   It’s end of year, when school food drives and coat drives and other collections take place, when nonprofit organizations are doing their year-end appeals and you could essentially be out at a fundraising event every day of the week – it’s just the typical time of year that has come to be known for giving back.

Network for Good reports that a third of all online annual giving (through their system) occurs in December, and 22% of annual giving happens in the last two days of the year.  And while most charities report receiving around 40% of their annual individual charitable donations in the last few weeks of the year [Source: Charity Navigator], here’s a push to start thinking about our philanthropy way before the traditional holiday season begins.  How about committing to set our philanthropic goals at year-beginning and spreading out our giving over the entire year? We’ve all partaken in some form or fashion in making our resolutions, budgeting, travel planning, and setting work, sports or school-year goals as we ring in the new year.  Doesn’t our philanthropy deserve the same planning?

Philanthropy, which quite literally means “love of humanity,” is sharing, helping, caring, showing concern and interest in the well-being of others. By starting the New Year with discussion of what we value as well as goal-setting, we prioritize our philanthropy for ourselves, for our families and for the causes and communities we care about.  We intentionally make space for it in our lives.  We are not rushed to identify organizations or balancing charitable giving and volunteering with budgets and schedules tapped out with holidays, travel, shopping and spending.  Starting sooner and taking time earlier gives individuals and families an opportunity to explore and perhaps be more thoughtful about the practice of not only giving back but acknowledging the deeply critical role connecting, giving and appreciating have in our lives.

Introducing philanthropy - thoughtful actions, meaningful impact
In our family, we have taken the approach of utilizing teachable moments vs.  one or repeated conversations about charity/giving back.   Philanthropy is not something you can just teach with words, it needs to be demonstrated.  I’m reminded of a quote attributed to Benjamin Franklin:  “Tell me and I’ll forget, teach me and I may remember, involve me and I learn.”

At the beginning of last year, my family set aside a specific place for the kids to collect toys and clothes for donation throughout the year. This could include items they’ve outgrown, books in good condition, or unopened gifts.  It’s allowed them to be mindful of what they have and what others may need.  We taught them about the value of money and how it’s used and gave each one a save/spend/invest/donate piggy bank. They devised their own ways of utilizing the four options and methods for withdrawals.  So that when Hurricane Sandy hit, for example, they were ready and able to draw from there.  One of the most touching moments was watching my son figure out if he had enough in his spend or donate section to help his sister meet her Girl Scout cookie sales goal. 

We added a few extra items to the grocery list to be donated at upcoming food drives. And we researched shelters, hospitals or churches where we could volunteer to help out throughout the year.  Together, we joined other families and volunteers to participate in Be the Change National Day of Service canvassing the Devon area in Chicago with information about enrolling in the new health insurance coverage made possible by the Affordable Care Act. 

We implemented the practice of keeping a gratitude jar. Throughout the year, we all periodically take a moment to jot down something we are grateful for and deposit the slip within the container. Notes have ranged from what we’ve given, received, achieved, shared and experienced.  At the start of the New Year, we open the jar and read the notes together.  It’s a chance to both reminisce and celebrate because so much of philanthropy is about being grateful and sharing.

A few years ago, the adult members of my extended family decided to make a family contribution to an organization in lieu of exchanging individual gifts.  How enlightening it was to engage in a process of getting to know each other’s values and motivations and then to ultimately see a compounded gift go a distance further in achieving something good.  Who knew -- until we asked -- what each of us was involved in, cared about and where we overlapped.   It was an incredible experience to see how the simple “ask” to give turned into discovering individual family member interests and existing charitable giving initiatives. 

Take time to explore and identify values together
What issues are important to everyone in your family, and why? We may have various personal causes, but what’s the common denominator?  How much can we/do we want to give, and what might we want to achieve?  What might it mean we let go of or give up?  This dialogue is actually a quite critical piece of the act of charitable giving, whether you do it collectively as a family or couple or individually.

Other questions that have come up in our family discussions:
      - In these tough financial times, why should we give (time and/or dollars)?
      - How do we as donors decide which groups to give to or spend our time with? 
      - What information should we review to make sure our time and resources are well-spent? Where can we seek out good advice and guidance as we make decisions? 
      - And how do we evaluate charities and causes before and after our gifts?
      - What tools exist to make giving back easier, more impactful and lasting?

Some tips to get started on giving back with your children:
      - Talk to each other – Share what you see, what they see, what they hear, what they have questions about.
      - Tell them about your job/career/extracurricular activities – Why do you do what you do, how and where does money come from and what it is used for.
 - Share what giving back is all about – Why is it important and how it makes you feel.  Your child may get an allowance or cash as birthday gifts. Consider having them set aside portions to save, spend, donate and invest. 
 - Start small – It may be your child putting a few of their coins into the collection tin. Eventually, she might choose to make a donation to a specific cause in lieu of birthday gifts.
      - Identify interests, values and make a commitment – Giving back comes in many forms: time (volunteering), talent (skills/resources), treasure (money) and ties (relationships/connections) … Have a conversation about what works best for your child(ren)/family and decide on something specific.
      - Volunteer together – Make it a family affair by selecting an activity together. While you may be interested in serving Thanksgiving meals at a food pantry, your child may love animals.  Perhaps a visit to the local animal shelter would draw your child’s interest.

Whatever avenues you choose to bring your family into the fold, know that it’s an invaluable component to building stronger individuals, families and communities.  Being philanthropic together is an opportunity to discover and learn about other people, other places, current events and important issues.  It’s a way to understand the world and how to relate to others.  It opens up possibilities to grow as people, to develop community and to foster change.  Giving back is not only personally fulfilling (there’s research about how doing good helps us feel good and keep us healthy!), it generates an awareness of one as connected to something bigger and beyond.  And that is the truest meaning of philanthropy.

      It's not only children who grow. Parents do too. As much as we watch to see what our children do with their lives, they are watching us to see what we do with ours. I can't tell my children to reach for the sun. All I can do is reach for it, myself.   - Joyce Maynard

Making Your Money Work For You and Others

By: Aviva
Aviva is participating in Allowance for Good's autumn 2013 Emerging Leaders in Philanthropy program.

This past week, we were asked to record our expenses on a personal budgeting worksheet. Before starting, we were to give ourselves an estimate/budget for each category of expenses. Then, as the week progressed, after recording all of the money which we spent, we compared our estimates to our actual expenses. Many people found that they over-estimated in some categories while largely underestimating in others, most often bills which are paid by our parents. I believe that a lot of us learned about the varying amounts of money that go into certain things and learned that we might not be as financially literate as we might think.

To me, financial literacy is about knowing what to do to make your money work for you AND others. In class, I learned about the different things to consider when deciding how to use my money. These included researching the place where I am giving my money to see if it is reliable, and considering the impact of my monetary contribution. An important factor that our class came up with is knowing if an organization to which you are donating has a plan to use your money to its full potential, aka making the greatest impact. 

The lessons I learned from the budgeting worksheet and the discussion about financial literacy will stay with me throughout the future. The most obvious place where budgeting and financial literacy will be put into play will be when I go to college, and don't have my parents with me to help me with managing my money. Financial aid and loans for college also require knowledge on these topics. Farther into the future, when I have my own stable income and decide that I am ready to donate a portion of that income, these lessons will help me make smart decisions about how and where to donate. These lessons have helped me become more confident about my financial future.

Aviva is a Catalyst for Good because she believes that all people have the right to health, education and happiness!

Philanthropy and Financial Literacy Reflection

On Wednesday, April 3, 2013, Allowance for Good began its newest program, Emerging Leaders in Philanthropy: A Student Seminar Series. Chicago-area youth are invited to participate in a weekly seminar to learn more about the global philanthropic sector and how they have the power to be philanthropists and agents for change.

Emma, reflects on our second session, focused on Individual Philanthropy and Financial Literacy.

Allowance for Good is a nonprofit organization helping broaden education across the world.  I am partaking in a course they are doing to learn about being a global citizen and a philanthropist. Philanthropy is the love for humankind as a whole. Throughout the sessions so far we have learned the true meaning of giving, budgeting and philanthropy.

Everyone seems to know the act of charity, a passive transaction where you do not partake in the doing of making a situation better. The first week we figured out the true meaning of philanthropy as a social corrective that you take part in to make a difference around the world. In philanthropy you are actually taking action and are motivated to act on your thoughts, and either you do something about the problems being faced or inform people of social challenges and potential solutions unlike a charitable act in which you just give and go.

We also talked about budgeting our money and how much we really spent on things we don’t necessarily need.  It was surprising to me how much money an average American family spends when we really don’t need all that we bought but if people cut down on their personal spending’s the people who receive the money they spend won’t make enough to get by. In other words I’ve figured out if we cut back, others do not benefit as much because spending our money results in the livelihood of others. We also talked about what should go into your budget. You should spend on yourself to keep yourself healthy, save for college, your kids, retirement, or whatever you need, invest so that you can make money and share with the people in need. In other words, we learned about financial literacy. Although in America we live a pitch perfect society, other places need our help and money so saving and sharing can make a difference in many ways.

Brainstorming with our youth about personal budgeting
So if you are interested come and join and be a part of something bigger, take action and give back to the rest of the world, be a philanthropist. You don’t have to be old and wise to help out anyone any age can help with any amount. You can be a philanthropist so start now when you’re young because we are the world’s future.