Consider the Effect "A Few Thousand Dollars" Could Have on Your #GivingTuesday!
#GivingTuesday provides an occasion to reflect on giving and investing, and on the determinants that make a dollar invested or given into 20 cents or 20 dollars. The multiplier depends on the way the dollar given or invested leverages the talents, work, energy, and value-creation of people.
“A dollar is not necessarily a dollar. It may be worth 20 cents or 20 dollars, depending upon how it is invested.”
In writing A Few Thousand Dollars: Sparking Prosperity for Everyone, I thought a lot about how money, a simple tangible counter, can morph depending on psychology, time, circumstance, leverage. A dollar spent on a cup of coffee disappears in a caffeine rush; a dollar invested in a business may generate jobs and income and equity. A central thesis of the book is that everyone needs FutureMoney – money that can be invested for future gain – and not simply PresentMoney – money used to pay current expenses, or PastMoney – money to pay past debts and interest. FutureMoney acts as hope in concrete form; debt can be profoundly depressing, stressing. I recount the incident that in many ways sparked my life’s work – observing how money low-income women saved in a Christmas Club didn’t earn interest, while the excess reserves of the wealthy not only earned interest, but higher returns.
Matched savings, the central mechanism of Individual Development Accounts (and 401k’s), a seemingly straightforward exchange rate, turns out in practice and upon reflection, a much more profound transaction. Matches magnify savings in multiples. It is a way to close the racial wealth divide by providing higher match rates to low income and low wealth people. Matched savings is a way to build capital, but it turns out also to build confidence, competence, and connections too – the central dynamics of development.
At the risk of being self-serving, can I suggest that giving to Prosperity Now directly or through the purchase of a copy of A Few Thousand Dollars, is a leveraged gift/investment? All royalties from the book will go to Prosperity Now. New Press, the publisher, is itself a non-profit focused on socially and economically progressive books, so any profits it recognizes are also recycled. Of course, Prosperity Now relies on donations as well as earned income to fund our work, be it solutions development, applied research, field engagement, policy advocacy, market development designed to open the doors of prosperity for all.
It is my fondest hope that A Few Thousand Dollars fuels a broader discussion and a demand for a fundamental change in tax policy to make the highest return investments we know how to make – in the productive capacity of all American people. This is an investment that can truly create cultivate prosperity for all. In Maimonides’ hierarchy, giving livelihood is the highest form of charity. Here, a dollar truly becomes twenty as it leverages the common genius of the American People.