Compounding Interest as a "Confidence Snowball"

Each year at the Forge we take our students through a money management training. One of the key principles of that training is explaining to them how the rule of compounding interest works in their favor in terms of investment, but works against them in terms of debt. It’s a great lesson to teach and it is one that I learned in high school from an honors English teacher of all things. He stopped class for 2 days to teach us about money. It was the only lesson on money I received from anyone in my life as a teen.

Well, the other day I was doing a Zoom call with some local high schoolers and their teacher talked about their need to have experiences. That teacher and I have discussed at length the idea that part of what the Forge is disrupting is the scarcity of experiences that many teens seem to have these days. We do this by giving them jobs, skills, and mentorship. He mentioned that these experiences compound over time in life and I began to think about compounding interest as a social mathematical factor rather than simply as a financial one.

The reality is that investing in human beings operates by the same principles. You need to invest in them early and often and keep moving forward trusting that the good work will compound over time. And just like retirement, the likely returns may not happen while you are around. My faith teaches me this idea repetitively. I serve a God who invests for the long haul rather than the short fire sale. I serve a God whose way of doing and being requires that I trust at every turn without necessarily being able to see the eventual outcome become realized. Half the time I am not even sure what the final picture may look like.

What triggered all of this was that a student’s parent had texted me the other day to let me know that simply bringing her out for a few landscape jobs has boosted her confidence. She is learning that she can earn money and that she is capable of doing things…including socializing. It’s provided an opportunity to compliment her on what she is good at: detail work, following instructions, and keeping moving.

What that mom was saying, without knowing it, was that she can see the downhill roll of a growing “confidence snowball” that is critical to every adolescent becoming a healthy adult. Each one of those experiences with caring adults, caring community, and accomplished tasks will compound over time in terms of her ability to interact, take risks, and clear hurdles. That interest will further compound if we can help this student to realize that she also has a calling to then serve others in a similar fashion. And I remain convinced that kind of outward investment is fulcrum point at which the compounding curve explodes upward. We become most fully human in helping other to become image bearers of God. We begin to lift when our sense of what matters proceeds beyond ourselves. Christ models that. Christianity insists on it.

"We're Gonna Need a Bigger Boat"

One of the things that I keep learning as I do this ministry as social entrepreneurship thing is that it often seems like feast or famine.  Some days it seems to me like forever since new business has come through the door and other days it gets really stressful simply because there is too much business and not enough time. 1 step forward two steps back.  In my case, I work a 60 hour a week job and then have to figure out how to coordinate a separate social entrepreneurship (a landscaping company) on the side.  The difficulty is that until we either get enough business or a large enough grant I can't provide enough hours to sustain the employee that I would want.  It's a constant tension.  Yesterday was a case in point.

This past weekend we had done our first training for the non-profit wing of what we do.  We do 5 trainings a year that focus on work and life.  Students attend these trainings and are assigned a personal mentor after the 2nd training. Our aim was to have 12 students in the room. We got to 8 with another two waiting in the wings. I was frustrated a bit because I had sent out multiple communications to the local school districts in the area, but hadn't really gotten any solid bites. People forwarded the information to other people, who forwarded it to other people, who then sent it onward into electronic scholastic purgatory (it has flames, Ticonderoga pencils, and too much standardized testing). I expected that this kind of information passing would be the case. School employees are just swamped.  But, all in all the training went really well and we had a bunch of new students show up. It was pretty exciting despite not reaching our targeted goal. And the number  of students was just about right for our group of mentors.  So, in some ways it felt like bit of famine, but it was manageable and that felt pretty good.

Well, when I rolled into the office yesterday I received three emails in short succession from various school counselors and career advisers. All of them were asking for more information or for a special meeting with some of their students. Another student from our church then asked if she could join the program. She had missed all the communication I had sent out. I got off my my email and the first thing I thought was, "We're gonna need a bigger boat."

The whole dilemma in our program is how fast you can scale.  We want to strike a balance between profit and just enough grants to keep us going. We want to balance having students get work experience and having enough time for relationships and coaching.  We want a good number of students so that our program feels worth while, but we also need to balance that with the proper number of high quality mentors so that we are getting at the real work we set out to do.  It's a hard balance to strike.

So, I had started the day with contented disappointment and finished with, "I need more mentors." I had this sense that this is how the disciples must have felt when they pulled the nets in from the sea teeming with fish. Half the crew (the crazy entrepreneurial ones) thought that this was the best damn day they had ever had on the water! The other half (the details people) felt that this was not the sort of abundance anyone could handle. I have often wondered if they had a sense of the kind of harvest that Jesus was really pointing to.  Because in actual practice the harvest of people that he refers to is a bit of a mixed bag. Sure it's lots of fish, but the mass of teeming humanity is often hurting, angry, and broken. Getting them in the boat is one thing, but getting them to shore without sinking your whole operation is another.  The harvest that Jesus' actual way of living brings is just as scary as it is joyful. It points to the grunt work of helping to reshape and forge human beings and anyone with half a brain and any experience with people should find that a bit daunting.

But,  this is just how it goes in this new world that I am inhabiting. Abundance comes, but it creates new adaptive problems.  They are exciting and terrifying all at the same time.  It's tricky and I am trying to avoid being gobbled up. One of my favorite prayers used to hang on a placard in my brother's room growing up. It had an anchor and some waves and it said, "Oh Lord, the sea is so big and my boat is so small." I have this inkling (or maybe it's a sinking feeling) that the more we open our doors through missional work, the more we will discover the vast needs that are out there. It's overwhelming.  We're gonna need a bigger boat.

Why For-Profit? A story about research, dignity, and my neighbor.....

One of the questions that I have had to deal with as I have started my "Youth Ministry that Works" process is, "Why go for-profit?"  Many people don't have a clue as to why a minister would start a for-profit company to do social good.  The answer is a bit complicated, but I think it is worth a lengthy post.

Very early on in my process I had to decide whether or not my company would be for-profit or non-profit.  To be honest,  I didn't know much about either and what their advantages and disadvantages would be. The only for-profit experience I had was through my father who mostly worked for larger companies.  My non-profit experience had been confined to my church ministry over the last 15 years which is a different and often peculiar beast unto itself.

So I tried to engage a process of research and discernment to make my decision.  Here is what it entailed:

-I researched the differences online.

-I spoke with someone in the finance world that has worked both for-profit and non-profit entities.

-I spoke with someone who works with a major grant foundation in the Pacific Northwest and asked her thoughts.

-I spoke with an attorney.

-I read a couple of books.

-I prayed.

Here is what I think I learned.  First, I learned that each has its own benefits. I won't get into those here, but one of the major hurdles I ran into was that I wanted my enterprise to be faith based and that would immediately cut me off from most non-profit funding. Second, non-profits are expensive to start up and have tons of restrictions surrounding a board of directors etc.  They are often unsustainable models without leaning on regular charitable giving.

In the for profit model I was able to start my social enterprise for about $900 in fees for licences etc. That of course does not include my start up equipment. But, for that relatively small amount I had a business up and running, at least in name.  My non-profit folks told me that starting a non-profit is much trickier and takes a lot more time. I would also need to assemble a board.  Along the way I repeatedly heard that grant writing is a pain in the butt from a number of people who know a whole lot more about it than I do. While my small business friends do complain about how the tax system, I seem to prefer that over constantly having to ask for money. I know that many non-profits make money hand over fist (See: Goodwill). Most do not. They are reliant upon the benevolence of others and I sometimes get tired of that dynamic from working in the church. To put it into crude business terms, the church lives off of cultural subsidies in some ways.  This leads to my main conclusion.  For-profit, when done with some ethical integrity, encourages harder work and maintains the most dignity for both the giver and the recipient. Dignity.

It is my firm belief that increasingly we are starting to recognize that giving things away often robs the recipient of some of their dignity each time they receive.  One of the books that has re-shaped my thinking on the for-profit and non-profit worlds is Robert Upton's, "Toxic Charity". If you haven't read it, you should.  I think what we are starting to see that no strings attached giving robs the recipient of a little bit of their dignity each time they receive.  I suppose this makes me a bit of a capitalist, but I am okay with that. I think that we are at an intersection in our world where the Iines between the for-profit and non-profit worlds are starting to blur significantly.  You can understand this trend in 4 minutes if you watch this clip of my friend Andy Lower presenting on this topic for the Eleos Foundation.

I wanted a company structure that encouraged high accountability amongst my students for the quality of their work. I also wanted one where the customer didn't feel like they were simply giving us money.  Instead they were paying a competitive price for a service rendered with a company that was forced to compete with other similar companies. Yet, we were still engaged in a social good. In this way, the customer trades away none of their dignity and my employees feel like the company stands and falls on the quality of their output.

This idea became particularly poignant this past week as someone at my church came up to me and shared about the impact that Mowtown Teen Lawn Care was having on someone in our community who is a customer. The particular customer that we have has a home that they have a great deal of trouble maintaining. Over the years a number of neighbors had begun to pitch in on the home doing occasional clean up. Sometimes they did it out of love and sometimes they did it so their neighborhood looked more presentable.  But, over time this person at my church began to sense that their neighbor resented the help, and that because of their particular social anxiety they did not like having their neighborhood in their back yard.  They tried hiring local teenagers to do the work every once in a while, but the students lacked the right tools and their work was often sub-par. Further, since the neighbors paid the teens, the customer was still receiving a hand out in a way.  And so Mowtown got a call.

What I learned on Sunday from this person at my church was that the customer was overjoyed! They actually enjoy having teenagers in their yard because they know that they are helping those teens to grow and develop. Yet, they are doing so while paying a competitive price which takes no dignity away from them as they receive our services. They are no longer a recipient. In many ways the for profit model levels the power dynamics in a relationship. When done right I might even argue that it is the most humane solution to social issues. Both parties are making their community better while not having the image of God in them diminished.  Sadly, many of our charitable works achieve just that sort of diminshment when we are honest with ourselves. One party feels great while the other feels their struggles are only confirmed and underscored by the services rendered free of charge. Please hear that I am not against non-profits and am a firm believer in no strings attached giving when it is done short term and in crisis situations! But overall I prefer the equality of the for-profit model.

Basically what I am trying to do is take smart third world principles for doing the most social good and am applying them to the American Church and to American Youth Ministry. I have begun to wonder how often we rob both our students/congregants, and those they serve, of dignity by our subsidized model of ministry. I say that as someone who is paid by that very model. I think the current ministry model not only robs people of dignity but it produces youth ministries that tend to be low in terms of participatory opportunity and low in terms of the kind of accountability that produces spiritual growth.  But, that will be for my next post.

So to put it succinctly: I went for profit.

God bless and keep innovating!