Tuesday, December 25, 2007

Quirky Philanthropy: Turning Shoes into Scholarships

How folks with large surpluses choose causes to fund is endlessly fascinating. There are literally millions of causes out there, and of course if you have enough money, you tend to set up your own foundation, Warren Buffet none withstanding. (His money is going to the Bill and Melinda Gates Funds, since he didn't want to waste money duplicating their efforts.)
Recently Harold Alfond, founder of the Dexter Shoe Company in Dexter, Maine, died and left a foundation that will fund $500 to each baby born in Maine to start a tax-free college fund. This is his answer to global vs. local, deep vs. wide, proactive vs. crisis relief - the kinds of needs one balances in funding causes.
At first glance, $500 doesn't seem, even with 18 years of tax-free compounding, that it will go very far in paying for college, since a year at an elite private school now costs about $45K. But something else is at work here. The project is called the Harold Alfond College Challenge; his aim is for parents to have a goal of saving for their children's advanced education. Humans respond well to goals - they focus our attention. Having the money there, growing, makes college seem possible for those who have never imagined it before. One of the most interesting things I learned this past year of blogging is that people with a financial plan - any plan at all - prosper more than those without one. So the $500 hopefully will shape many families' financial behaviors in positive ways; Alfond is hoping his generosity will be matched and leveraged, so families will grow these accounts themselves and see their kids as future college students, taking schooling more seriously because they have an educational future. Seems like a neat idea, rather than fully funding x number of scholarships for kids 18 years later who would be the kids who grew up in homes with a college focus already. They will all be shooting high anyway. This program hopes to pick up kids who would have never considered college. But he is egalitarian. Affluent Maine babies (from the Lucky Sperm Club!), get the $500, too!

1 comment:

Grace said...

What a wonderful story!