“Crazy Cash City” for a Crazy Cash World

 

A scene from a similar "Crazy Cash City" event in Gallup, New Mexico.

What’s the best way to learn about personal finance? How about a workshop where you get to make financial choices – and sometimes mistakes – but all with play money?

First Nations Development Institute partnered with the Native American Youth and Family Center (NAYA) in Portland, Oregon, to offer a “Crazy Cash City” workshop just yesterday, May 19, 2014. NAYA sponsors an alternative high school known as the Early College Academy that emphasizes student empowerment and academic excellence while integrating core American Indian and Alaska Native values in partnership with parents, families, elders and community members. First Nations is working with the Early College Academy to provide innovative financial education programming, including the “Crazy Cash City” workshop where more than 100 youth will learn the basics of budgeting, bill paying and financial responsibility.

“Students learn best in experiential settings,” noted Shawn Spruce, First Nations’ financial education trainer coordinating the event. “Kids like to hear, see, think and do. They are not just learning the concepts, they are carrying out the actual activities of budgeting and bill paying. Research shows that this is a much more effective learning model for youth than classroom lectures.”

The “Crazy Cash City” workshop is a 90-minute reality fair in which students have to navigate a series of simulated financial tasks designed to teach basic budgeting and banking skills. It is designed to be fun — since they are spending play money and not really buying things — but it is also informative and highly interactive. All participants are given a folder containing a fictitious family profile that listed what their income was, the income of a spouse, the age of any children, and any outstanding debt or benefits they received.  The high school kids then visit about 10 booths that provided various choices for housing, transportation, child care and more, and are asked to make smart financial decisions based on their family profile.  At the conclusion of the seminar, the students were expected to have a fully balanced budget that they logged in their check register and budgeting sheet. This workshop has been held multiple times with high schools in Gallup, New Mexico, and is based on the Credit Union National Association’s “Mad City Money” program.

Students calculate expenses at a similar event last year in Gallup, New Mexico

The purpose of the event is to give the youth opportunities to practice good spending and budgeting habits prior to entering the “real world” after graduation.  The idea is to promote smart and informed decisions that will last a lifetime.  This event was made possible with the support of the Bill and Melinda Gates Foundation and the Paul G. Allen Family Foundation. First Nations is honored to be partnering with NAYA on this project, and proudly supports their work in an additional grant supported by The Kresge Foundation.   “This event really brings together community partners and it is always great to work with the students and teachers,” said Michael E. Roberts, president of First Nations Development Institute.  “We are happy that we found an exciting way to teach youth practical budgeting and banking skills that they can soon apply in the real world.”

By Sarah Dewees, First Nations Senior Director of Research, Policy & Asset-Building Programs

Wigamig’s Big Success Story is Good Example of VITA’s Big Value

Last year, there were 145 VITA (Volunteer Income Tax Assistance) sites that served Native American communities, according to the IRS. These sites were sponsored by tribal governments, tribal housing authorities, Native and non-Native nonprofit organizations, senior centers, credit unions, tribal colleges and urban Indian centers.  First Nations Development Institute (First Nations) has also supported some of these Native VITA sites with grants, technical assistance and training.

VITA sites are a useful tool for providing free tax preparation services to low- to moderate-income people and helping them claim a range of valuable tax credits, including the Earned Income Tax Credit (EITC). In addition, they can help individuals avoid high fees for tax preparation services and also avoid being persuaded to take on high-cost loans against their tax refunds.

During the 2013 tax season these sites filed a total of 48,413 returns, facilitated $70 million in refunds and helped people claim approximately $26 million in EITCs, which is money that comes back to or stays in Native communities and benefits the entire community. Further, it is estimated that these 145 sites saved Native American filers $7.3 million in preparation fees alone, based on an estimate of $150 in fees per filer.

Data from several of First Nations’ recent Native VITA site grantees revealed the tremendous positive impact these programs can have in Native communities.  A report about this can be found on the First Nations Knowledge Center at this link: http://firstnations.org/knowledge-center/financial-education.

Wigamig Executive Director Fern Orie

One of First Nations’ VITA grantees is the Wigamig Owners Loan Fund, Inc. (www.wigamig.org/) in Lac du Flambeau, Wisconsin. It serves the Lac du Flambeau Band of Lake Superior Chippewa along with all Wisconsin Indian reservations. Wigamig offered up this anecdote as just one example of a tremendous success story stemming from its VITA effort:

“We had a client who had gone to a paid preparer for the past couple of years,” said Fern Orie, Wigamig executive director. “By Wigamig preparing the return and asking the appropriate interview questions, we discovered the family has an adult disabled son who they have not been claiming as a dependent on their tax return. In reviewing their previous returns from the paid preparer, we noted that they should file amended returns to claim their son for the prior years and recoup their appropriate refund and tax credits. In review and preparation of these amended returns, we discovered two errors totaling over $2,000. With these corrections and amending the returns, the clients will be receiving nearly $12,000 back from the IRS from two of their amended returns. This does not include a third year of an amended return that Wigamig is still processing. By educating clients, we are increasing their self-sufficiency.”

“VITA programs play an important role in providing affordable, appropriate financial services for Native families. We are proud to support VITA sites and their community partners that continue to bring resources into their local communities,” said Sarah Dewees, senior director of research, policy and asset-building programs at First Nations.

FN+FIMO+FINRA+SEC+OST = Navajo Financial Ed

Attendees closely listen to workshop presenters and take many notes

To help tribal citizens of the Navajo Nation prepare for a potential financial windfall, the Federal Indian Minerals Office (FIMO) teamed up with the FINRA Investor Education Foundation, the U.S. Securities and Exchange Commission (SEC), and First Nations Development Institute (First Nations) to offer a series of financial education workshops in Albuquerque, New Mexico, in December 2013. Staff from the Office of the Special Trustee for American Indians (OST) also assisted with the trainings.

Participants engage in an interactive activity during the training

The outreach event was held at the Indian Pueblo Cultural Center and consisted of two three-hour workshops designed to help people learn about managing their money, avoiding fraud, and investing. Interactive exercises, videos and presentations were used to provide information on financial topics.   FIMO was established in 1992 by the U.S. Department of Interior to provide services to individual Navajo mineral owner beneficiaries regarding their mineral interests and rights. To date the organization has approved 70 of 344 pending negotiated leases worth about $195 million to over 20,000 people.  There are also plans to auction off roughly 200 additional leases as a result of the current oil boom on the Navajo Nation.

Another activity helped drill home the information

The training began with a financial self-assessment and guided the participants through making goals, budgeting, tracking expenses and making a financial plan. The participants then learned about different types of fraud and effective means of combating fraud.   First Nations Financial Consultant Shawn Spruce coordinated the event in partnership with Charles Felker from the SEC, Susan Arthur from the FINRA Foundation, and Leona Begay from FIMO. The event was partially funded by grants from the FINRA Investor Education Foundation and the W.K. Kellogg Foundation.   The purpose of the event was to assist oil and gas lease beneficiaries with money management by promoting smart and informed decisions that will help with budgeting and protect beneficiaries from fraud. When asked about the training, many beneficiaries responded that the workshop was extremely valuable.

Visual aides were used during parts of the presentations

“It was really exciting to partner with staff from the FINRA Investor Education Foundation, the Securities and Exchange Commission, and the Federal Indian Minerals Office to provide this training,” Shawn said. “We look forward to providing many more, and having an even wider reach in the future enabling us to effectively build money management skills for this community.”

By Sarah Dewees, First Nations Senior Director of Research, Policy & Asset-Building Programs, and Rachel Vernon, First Nations Program Officer.

Native Youth Participate in InvestNative Online Financial Education Challenge

In December 2013, First Nations Development Institute (First Nations)  finished another round of its popular InvestNative Online Financial Education Challenge.  The online financial education curriculum, funded by the FINRA Investor Education Foundation, provides concise, interactive and youth-focus financial literacy lessons.   The curriculum is aligned with the Jump$tart National Standards in K-12 Personal Finance Education and has been further adapted to meet the specific needs of Native youth in their communities.

Working in partnership with several high schools across the nation, First Nations recruited more than 70 students to participate in the online challenge in December.  This is the fourth time the online challenge has been offered, and to date over 418 students have participated and about half (204 students or 49%) have successfully completed all modules.

Guided by the principles of behavioral economics, First Nations provided an incentive for students participating in the challenge, and students who completed all eight lessons and passed a series of assessments (one for each module) with an average score of 80% or more were entered into a lottery to win a pair of the popular Beats brand headphones.  High schools that participated last year included Gallup Central High School and Thoreau High School in New Mexico, and Meskwaki High School in Iowa.  Beats headphones winners from Gallup Central High School (above) and Thoreau High School (below) are pictured here.  

An evaluation of the curriculum in 2013 revealed that 91% of all students who completed an evaluation agreed that the curriculum was relevant to their lives and 95% agreed that the information presented would assist them with their financial needs.  First Nations will continue to work with community partners in 2014 to make this curriculum available for high school students and youth groups.

To learn more about the curriculum, visit www.investnativeonline.org.

By Sarah Dewees, First Nations Senior Director of Research, Policy & Asset-Building Programs

First Nations & Native America Calling Team Up on Radio Programs with Financial Focus

The national radio program Native America Calling and First Nations Development Institute teamed up this summer to offer a series of radio programs with a financial focus.   The series, which first aired June 14, was broadcast each Friday through July 12.

In the first program, host Tara Gatewood and expert guests discussed common selling and lending practices by automobile dealers in and around Native communities. Calvin Lee, an attorney with Navajo Nation Human Rights Commission, shared information about problems people have had with unethical car dealers near the Navajo Nation.   A second broadcast featured a conversation about minor’s trust payments and how young people can successfully prepare for receiving these large payments, or their “Big Money.”

Another program provided information about how to use credit wisely. The remaining shows focused on “an Indigenous perspective on spending” and understanding retirement planning.

These programs were sponsored in part by the FINRA Investor Education Foundation and the W.K. Kellogg Foundation.

Each weekly broadcast included a brief conversation with the “financial warrior” known as Dr. Per Cap. Dr. Per Cap originated as an advice column sponsored by First Nations that was designed to assist individuals and families in becoming financially independent.  On each program, producer Monica Braine consulted Dr. Per Cap for advice on a financial topic, and he shared his insights, advice and wisdom.

Native America Calling, produced by the Koahnic Broadcast Corporation (a Native-operated media center in Anchorage, Alaska), is a live, call-in program linking public radio stations, the Internet and listeners together in a thought-provoking national conversation about issues specific to Native communities.  It is heard on more than 52 stations in the United States and Canada by approximately 500,000 listeners each week.

For more information about the radio show, please visit www.nativeamericacalling.com, and for information about the Dr. Per Cap advice columns, visit http://www.firstnations.org/AskDrPerCap.

By Sarah Dewees, First Nations Senior Director of Research, Policy & Asset-Building Programs, and Benjamin Marks, First Nations Research and Program Officer.

VITA is Vital to Native American Communities

Part of First Nations’ mission is to provide financial education for Native American communities so that people can save, invest, prosper, and regain control of their assets. The goal is to help people learn to avoid financial pitfalls such as predatory lending practices that especially prey on American Indian people.  As part of this effort, we recently completed a “how to” manual that provides instruction on how Native and rural communities can start a VITA site, or a “Voluntary Income Tax Assistance” program.

The publication is titled Tax Time Savings for Native Communities: Ten Best Practices for Effective Native VITA Programs. In compiling the report, we interviewed five model programs, and then captured lessons learned and best practices.  We were supported in this work by the W.K. Kellogg Foundation, the Bill and Melinda Gates Foundation and The Paul G. Allen Family Foundation.  The publication can be found in the First Nations Knowledge Center at this link.

Native VITA sites provide free income tax preparation services to tribal members living on reservations and in rural communities. These sites reduce the cost of tax preparation for low-income families and help them avoid expensive products such as high-cost loans against tax refunds. VITA programs also help tax filers access the Earned Income Tax Credit (EITC) and other credits. The EITC is a refundable tax credit for low- and moderate-income individuals and families with children. Unfortunately, millions of EITC dollars go unclaimed each year, especially in Native communities. In 2007, First Nations estimated that in some Native communities as many as 70 percent of qualified tax filers failed to claim valuable EITC refunds.

Most low- to moderate-income individuals have few options available to them as they try to fulfill their legal obligation to file their federal tax returns each year. Many turn to high-cost tax-preparation services that may encourage filers to take out expensive loans against tax refunds. Tax filers who qualify for the EITC use these high-cost tax-preparation services and loans at a higher rate than those who do not qualify, which means that they are more likely to lose a portion of their refund to unscrupulous or overpriced tax preparers. In an attempt to overcome these challenges, we created this report to encourage tribes, tribally-based organizations and other Native leaders to implement VITA sites in their communities and persuade Native tax filers to take advantage of the EITC.

Most rural or reservation-based Native VITA sites, unlike urban VITA sites, face a unique set of challenges. The geographic isolation, low volunteer retention rates, economically distressed communities, and overall distrust of the federal government among many Native Americans can limit the success of traditional VITA site models (models developed by the IRS). In this report, we proposed some best practices designed to address these unique challenges by developing culturally-relevant strategies, structures, and activities for launching and expanding successful VITA sites in Native communities.

First Nations derived these best practices from surveys and in-depth interviews conducted with five successful Native VITA sites last year, including:

The lessons and methods learned from these five model programs will be valuable resources for tribes, tribally-based organizations, and others serving Native constituents who are dedicated to improving the economic condition of their communities.

Related to this effort, we also recently awarded grants for innovative VITA programs.  The recipients and grant amounts were:

First Nations believes that sharing information and models is an effective yet underutilized tool in Indian Country. We hope the report, and the information shared by these five organizations, will help other tribal leaders learn more about how VITA sites can help empower their communities.

By Sarah Dewees, Senior Director of Research, Policy and Asset-Building Programs