dollars and common sense
By Mark Morris
Given the breadth of Square One’s work for children and families, it’s not uncommon for the organization to receive contributions to support its efforts.
But recently, FR Investment Group offered a donation that goes far beyond just writing a check.
“Instead of donating money, we chose to do something more difficult,” said Peter Cote, president of FP Investment Group. “We volunteer our time and services to help Square One customers and staff improve their financial literacy.”
Dawn DiStefano, executive director of Square One, had seen similar attempts at financial education fail, despite good intentions. This last proposal was different.
“FR Group wanted to understand who we are and what we want for our customers and staff,” she said. “They were curious, inquisitive and showed us that they valued our expertise as well.”
The Empower Financial Literacy program is now a monthly offering at Square One. Flavia Cote, Executive Vice President of FR Investment and wife of Peter, leads the session each month with FR staff, including her daughter, Flavia McCaughey, Vice President of FR.
McCaughey introduced the idea to his parents that working with the lowest-income families to help them understand the basics of finance could have a huge impact on those families — and also on the community as a whole. The Cotes supported the idea but also offered sage advice.
“My parents told me to be prepared for maybe only one person to show up for the meeting,” McCaughey said. “I discussed this possibility with the team and we decided that if the program made a difference in the life of just one person, it was worth it.”
Instead, 14 people signed up for the program, eight or nine of whom regularly attend the monthly sessions.
“Given that we’re still dealing with COVID and everyone has busy lives, I’m thrilled with 14 sign-ups,” DiStefano said. “The program will be there when they are ready. It’s not a one-and-donation.
“Instead of donating money, we chose to do something harder.”
Far from there. Peter has committed his company to managing the financial literacy program for the next 30-50 years.
“This is the time it will take to make real changes to the financial well-being of our community,” he said. “You have to be on the ground and commit to the long term.”
Change the story
This kind of commitment is necessary to break what DiStefano called a self-fulfilling prophecy of poor outcomes.
“Those who grew up in a family where they worried about how they were going to eat and go to school often end up creating this same unstable environment as adults,” she said. “They aren’t surprised when they lose an apartment or don’t care about their credit score because they feel they couldn’t buy a car anyway.”
Just like saving, difficult situations can also get worse and grow. DiStefano gave the example of a person who lost their job and, in order to receive housing assistance, had to be behind on rent, which would then negatively affect their credit rating. “That’s what people are dealing with,” she said.
Melissa Blissett, vice president of family support services at Square One, asks people what’s going on that’s stopping them from living a better life and uses a tool called the Family Goal Plan to help them.
“FR people speak the same language we use with our families, and we both use the SMART goals approach,” Blissett said. SMART, a popular goal-setting technique, is an acronym for Specific, Measurable, Achievable, Relevant, and Timely.
Flavia Cote said her team encourages people to set a goal such as buying a reliable car, and FR staff break it down into the actions needed to ultimately achieve the goal.
“We encourage people to try to save at least $10 a month,” she said. “Even if they can’t save $10 next month, they started thinking about saving.”
To avoid getting overwhelmed with an important goal, Peter suggests taking it one step at a time. “I don’t want people to think years from now – just think about the next 24 hours. When you narrow it down to 24 hours, you help people see an achievable goal.
In their monthly sessions, FR staff help people crunch the numbers and, more importantly, understand the emotions that come with managing finances.
“If someone can’t save for a month, we encourage them to set a goal for the next month,” Flavia said. “We want to bring hope and make finance simple enough for people to achieve some kind of financial independence.”
Like dedicated savings, positive actions can also have a cumulative effect. Recently, a class action lawsuit involving overdraft fees at a regional bank resulted in a multi-million dollar settlement. After all the claimants received their share, there was $23,000 left. This final amount is usually donated to a non-profit program in accordance with the central theme of the case and is known as “cy pres”, from a French expression meaning “as close as possible”.
Plaintiff’s attorney, Angela Edwards, heard about Flavia Cote’s Square One program and thought it sounded perfect. “I recommended the cy pres for Square One, the defense attorney agreed and the judge approved it.”
Peter Cote sees his primary job not as a financier, but as a champion for others. “We deal with people who have a variety of financial challenges, and we are their champions for letting them know that everything will be fine.”
When people attend the sessions at Square One, Flavia said, they show they are ready to make progress in their lives. “We try to help people understand that their situation is not permanent and that there is a way to change it.”
Although a term like financial literacy might sound academic, Peter offered a few different terms that might better describe the course.
“You could call it financial wellness or Life 101,” he said. “Maybe understand 101.”