How to Invest in a Kid's Future: Buy Shares
Ruth Walker, writer of The Christian Science Monitor, The Christian Science Monitor
Any youth group can sell candy.
The Boys' and Girls' Clubs of Edmonton took a different approach to fund-raising this year: They sold shares in the futures of the kids themselves.
For $1,500, payable in three $500 installments over three years, Edmontonians looking to donate creatively could buy a "Class A share" on the club's "Futures Exchange." The immediate reward is a receipt for tax purposes. But there is a longer-term payoff too - for both the investors and the young people. "By the time we turn 35, they get 1 percent of our gross income," says teen Carmen Miller, who met her "shareholder" at a recent luncheon organized by the clubs. "We thought it was a good idea." "We signed up for it," says Lori Bonneux, like Carmen a participant in one of the clubs' teen-leadership programs. "And every year we give them an annual report on what we've done." The 1 percent commitment, a one-time payment, is a moral rather than a legal contract. And it's the Boys' and Girls' Clubs that get the up-front capital, not the kids, though the funds are spent on their behalf. But the commitment seems to have got the kids thinking. Says Carmen, who wants to go into forensic sciences after she completes her education: "I want to make my shareholder proud of me." "If I drop out of school," says Lori, who wants to study psychology and go on to work with children, "I'd be disappointed. I wouldn't be able to make enough for my shareholder. She'll be retired by then. I want her to be happy she invested." Kerry Harty, who conceived the program, thinks it will work because it's what he did himself as a young man. To help finance his own education as a "mature student" after he was married, this former high school dropout sold "shares" in himself to the three willing investors he was able to find: his father and two of his professors. When he turned 35, he paid them off - with 1 percent of his gross earnings as vice president of RBC Dominion Securities here, $5,000 (Canadian; US$3,300) apiece. "The people who bought shares in me were taking a risk," he says. "This guy could have gone either way." Of the program at the Boys' and Girls' Clubs, Mr. Harty says, "The whole idea of issuing a share is to assign value." The kids have been told that if they get into trouble with the law, for instance, their share price goes down - figuratively that is, because there is no plan to have the shares "traded." But, Harty continues, "we're trying to create a link in the kids' minds between present and future, to make them realize that the decisions they make today have an impact on their life at 35. …