Taking it to the streets: The role of universities in building financial

capability in the community

Mark Brimble and Victoria Vyvyan

Griffith Business School

Financial Literacy, Banking and Identity Conference

RMIT, October 2006

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The Research Questions:

• Why are more academics not involved in community projects?

• What is the role of universities in relation to community projects?

• Acknowledgements

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Background

• A hallway discussion• The Centre for Financial Independence and Education• Another hallway discussion• A look at the literature

– Lots of it– The Batson, Ahmad and Tsang (2002) four motives

framework

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Outline of presentation

• The literature• Method• The projects• Discussion: the four motives framework• Conclusion• Questions

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The LiteratureThe changing role of universities:

• The third role of universities: community service. Why?:

– Commonwealth Government policy change: a broader role for universities as cultural, social and economic change agents

– Massification of higher education

– Changing patterns of training

– Changing education models

– Increasing anchorage to geographic regions

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• Motives for community involvement

– Batson, Ahmad and Tsang (2002):

• Egoism: self-interest

• Altruism: to help others

• Collectivism: improving the welfare of a group

• Principlism: to uphold a moral principle

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Barriers to community involvement

• Time: to develop relationships and to acquire and develop staff expertise

• Funding: poor engagement history, little track record

• Academic staff engagement:

– Negative perceptions re value vis-à-vis research and teaching.

– Perceptions of being unable to be of relevance to the community

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• Financial Literacy/Capability

– An emerging issue of concern in Australia and other nations since significant financial system reforms in the late 1980’s early 1990’s.

– Evidence confirms the concern (Roy Morgan, 2003; ANZ 2005), Loibl and Hira (2006)

– Commonwealth Taskforce and subsequent Foundation formed.

– Financial Literacy vs. Financial Capability

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Hence this study reflects on three campus-community projects run by the Centre for Financial Independence

and Education to evaluate the potential role of universities in such community projects. The four motives framework is used to operationalise this.

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Method• Case study approach to three financial capability

community projects• Adopt a focus of behavioural and attitudinal

change to influence how participants behave, act and think about money.

• Motivate participants to get things in order, take positive, proactive steps to set and work towards goals.

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• Base Workshop Content

– Module One: Let’s Talk About Money

• What my family taught me about money

• Money beliefs and fears

• Goal setting

– Module Two: Getting it Together

• Knowing your financial position

• Budgeting

• Shopping

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– Module Three: Making Money Work for Me.

• Saving and investing

• Managing debt

– Module Four: My Plan

• Money and relationships

• My goals and plans

– Various delivery modes

– Tailored content/contextualisation

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Project One: Logan Women’s• Community Partner: Logan Women’s Health Centre.

• Participants: 35 women with varying age, education, cultural backgrounds and financial means.

• Format: 9 weekly workshops.

• Facilitators: CFIE staff,, Relationships Australia, Financial Councillors Association, financial planners, and Centrelink

• Ex-post outcomes included significant positive differences in key personal finance variables including:

– knowledge about investing

– monthly savings

– not spending without thinking

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– confidence that they would have enough to retire with

– knowledge about the flow of money into their household

– knowledge of where they spend money

– feeling positive about the future

– keeping to a budget and knowing where to get advice about investments and money.

• In addition:

– Developed links between the uni and community groups

– Led to the establishment of CFIE

– Participants continued to meet bi-monthly for a year

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“I do want to let you know that months on I am really seeing the benefits of attending your training course. I have a full time job that pays well, I am contributing extra into my super, paying off my hecs and have enough money to live well without fear. What I learnt most from your seminars is that financial goals take time to save for and that you can be saving for more than one goal at a time (this is a big shift from my previous effort where I would have one goal and focus entirely on that one area of my financial security ignoring other areas). I am also paying myself first and putting aside an amount each fortnight to invest in ethical funds at the end of the next financial year. It seems when I have my financial self organised there is emotional space and a material foundation to work on other areas of my life.”

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Project Two: YFS (Logan)• Community Partner: Youth and Family Services (Logan)

• Participants: 20 participants with varying demographics and circumstances.

• Format: Varying – 3 series

• Facilitators: CFIE staff, YFS, Relationships Australia

• Ex-post outcomes: Responses from all participants were encouraging, with several participants making positive changes in their lives including paying off debt, saving money, and gaining employment or making positive steps toward this.

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• ‘If I hadn’t done this course I wouldn’t know where to start’

• ‘I feel more secure, its less complicated and I know what to do.’

• ‘I have all the information to put it together so I feel like I can start putting it together’

• ‘I have respect for money where I didn’t have this before’

• ‘I have less debt, it was a huge eye opener’

• ‘I feel more in control’

• ‘I’ve paid off two debts, saved $500 in six weeks’

• ‘ My debt is down to $300’

• ‘ I don’t buy crap anymore – I am a more aware shopper’

• ‘I feel more comfortable talking about money – more confident’

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Most valuable aspects:• ‘Knowing my goals and being able to share them with the group’• ‘Debt: Knowing where your money is going’• ‘Setting my goals, the planning, the information’• ‘Knowing where your money is going’• ‘No pressure, it was more of a learning thing than a judgemental

thing’• ‘Puts it all into perspective’• ‘Understanding that you are not the only one’• ‘A little bit of information from the right people will help, they won’t

bite’

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What worked well:• ‘You are not a couple of stuck up know it all yuppies’• ‘Relaxed atmosphere – good atmosphere’• ‘Talking about family and fears first before other stuff about money’• ‘The activities’• ‘Understanding people’• ‘Small group was good, you got to know people better, it was easier

to talk’• ‘It wasn’t a lecture’• ‘Discussions were relaxed’

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Project Three: Loganlea High

• Community Partner: Loganlea High School

• Participants: 30 participants.

• Format: Four full day sessions over four weeks

• Facilitators: CFIE staff, YFS, Relationships Australia

• Ex-post outcomes: positive responses to questions:

– Since doing this course I think that I understand more about money.

– This course has helped me understand more about my emotions, values and money

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– Since doing this course I feel more confident about being able to set goals and actually achieve them

– I think that I will be able to use the information and skills I learnt in this course in my own life

– I think the course is really important for young people like me

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Discussion

• Initial and subsequent feedback from participants suggests that the expertise and resources of universities can contribute to developing the financial capability of the community in a meaningful way.

• But is this enough?

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Discussion: Altruism• Projects have the potential to improve the financial and

emotional welfare of participants, at least in the short term • Consequently, the altruistic side of academics and

institutions can be put to use in such projects. • The value of this in terms of job satisfaction, recruitment and

retention should not be underestimated as the emerging interest in corporate social responsibility suggests.

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Discussion: Collectivism• Financial capability can also be seen as an issue for groups

such as families and couples.• There is also the suggestion that improving the financial

literacy/capability of the community will have a positive macro-economic impact on the economy.

• In fact the CFIE, at the time of writing, was engaged in a project with Relationships Australia working with couples that was yielding positive feedback from participants.

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Discussion: Principlism• There is also scope for campus-community projects to

appeal on this level.• Social justice, for example, can also be a factor that

influences the engagement of academics and institutions in campus-community projects.

• For example in the projects discussed here, issues in relation to responsible lending practices such as those in lower socio-economic groups often having lower levels of financial capability and hence are often taken advantage of in the financial system constantly arose.

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Discussion: Egoism• There is scope for academics and universities to benefit

substantially from such projects:– Potential to produce research– Relationship building with community and industry entities

that are potentially beneficial in a variety of ways – Creating opportunities for students and therefore improving

retention and graduate outcome statistics– The opportunity to establish research groupings and

centres around financial issues– Media coverage of the projects.

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Discussion

• These potential benefits should not be ignored, particularly in an environment where:

– Funding is increasingly difficult to attract– Pressure is building for innovative teaching practices– Universities struggle with the mounting external pressure

to be more relevant and accountable to the public. • Accordingly, we propose that carefully designed and ‘pitched’

projects such as those referred to above could serve to entice more academics and institutions to engage in such activities.

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Concluding Comments• Universities operate in an ever changing environment,

where they are increasingly expected to be relevant to their communities.

• Financial capability issues provide an opportunity for academics and universities to engage with their communities.

• We suggest there are also a variety of potential benefits that could flow from such activities

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• Institutions will have to take steps to engage academics such as:

– develop internal grant schemes aimed at stimulating campus-community partnerships

– develop co-operative education programs

– revise procedures and policies for promotion, recruitment and performance management of staff

• Finally, we encourage, universities, community groups and the broader finance industry to get involved and work collaboratively to build the financial capability of the Australian community.

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Thank you for your attention. Any questions???