Debt Traps by Necessity

San Jose     The Everett Program at the University of California at Santa Cruz specializes in technical solutions for social change organizations.  ACORN has enjoyed a partnership with the program for the last three years that has seen several students work with our hawkers union in Bengaluru the first year, another team work with the ACORN Home Savers Campaign in the USA last year, and this year work to produce PSAs to run for ACORN Honduras on television in that country.

Annually, I visit there when I’m in the California in order to meet the students face to face and move the partnership along.  This year was interesting not only as they showed me the progress on the video, but also talking to a class of Everett students about techniques to develop organizational commitment and how to develop campaigns.  I also interviewed several of our interns for Wade’s World.  The combination of these conversations may have been helpful to them, but the real eyeopener to me was the huge debt trap that seems almost inevitable for these students, even with their eyes open as well.

Having just done a campaign training in Oakland only days before on payday lending, I used that as an example in Santa Cruz as well.  The students told me that the average all-in cost for this public university was about $36,000 per year.  There is a housing shortage on campus where many of the common spaces are now bedrooms, and two-person rooms are now sleeping three.  In town, it’s no better.  Asking the class about their individual rents, the responses were as low as $750 for one young woman living with 7 or 8 others, but more commonly the rents per person ran from $1200 to $1400 per month.  The Census Bureau recently released a report indicating that the median rent is now over $1000 per month throughout the country.  A rent freeze measure on the ballot in Santa Cruz in the last election fell short along with the statewide expansion of rent control for additional cities.

Some students knew about payday lending, but that tended to be only the few who had come from lower income neighborhoods in California.  Most had bank accounts, but no one had a physical checkbook, and most claimed little experience with overdrafts since they lived out of the instantaneous information online on their balances, and banks blocked them going past the levels.  Asked how they picked their banks, one explained he was “born into it,” and others nodded in agreement.  Virtually all of them seemed to be facing the prospects of significant school debt when they would graduate.

Financial literacy is a fairly meaningless phrase when you really don’t have much money and are forced by necessity to embrace predatory products and debt prospects.  I thought about this reading about a migration of payday lending practices into lending arrangements for rent for millennials with irregular income.  An article in the Wall Street Journal described the companies entering this space:

Uplift, one of several startups offering loans to recent college graduates, professionals moving to a new city and others who want to build credit or could use assistance making rent payments. These companies, which also include Domuso and Till, are entering a market long associated with payday lenders. Compared with cash-advance loans, which come with annual interest rates as high as 700% in some states, funds from the rent-lending startups are available at much lower cost. Some are competitive with credit-card borrowing rates at less than 20%.

Reading that piece and thinking about what I was hearing from these young students, I couldn’t help thinking that I was working with minnows while the barracudas were circling.  It wouldn’t be pretty, and swimming in debt and desperation, too many of them will be easy prey through desperation rather than choice.

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Why is it so Hard to Talk about Organizational Structure?

Milwaukee       Amani United, like a butterfly trying to emerge from a cocoon, is an embryonic organization attempting to emerge from its status as a project of a larger organization into a membership, resident-led organization that can spread its own wings and fly.  On this point everyone agrees, including the leadership core of Amani United and its parent organization, the Dominican Center.  Getting there is never easy, but it is easy to forget how important it is to get the structure right from the very beginning, and that was the task for hours of discussion on a harsh spring evening in Milwaukee as Amani leaders gathered to take on this task.

Ironically, structure is so important, but why is it so hard to talk about organizational structure?  I think there are a lot of reasons.  Organizational experience and participation continue to plummet whether in unions, voluntary associations, scouting, church, or even the NRA.  People just don’t have the cradle-to-grave kind of organizational attachments that were common fifty years ago.  But, it’s not just that.  The models are less transparent and less discussed.

Regular reports indicate that civic education is no longer a fundamental part of public education throughout the United States.  Fewer schools teach it at all as a mandatory subject.  People no longer know, even in a rudimentary way, how local, state, and federal governments work.  There’s also every indication that confusion is by design rather than accident.  Right now, in the standoff between Congress and the White House over information and transparency and the Trump administration’s refusal to respond to subpoenas, we can see a vivid example.  Politicians and governmental employees at all levels don’t want the public to know how it all works or see behind the screen of TV, tweets, and press releases.  Such concerted efforts to not make democracy work, make it harder even at the grassroots level for people of good will and intention who are trying to design a structure for their own organization to puzzle out exactly what their own democracy should be, making every choice hard and every decision difficult.

Trying to address this with the Amani United leaders, I devised a page-and-a-half “decision tree” or checklist of threshold structural questions with yes-or-no answers in some cases and little-more-none and similar multiple-choice selections when it came to accountability questions.  Where people came to consensus most quickly was on the need to hold leaders accountable, and this might be part of the reaction to current organizational and governmental practice.

The hardest questions revolved around confusion over exactly what a nonprofit association is and what it can do as a nonprofit versus a tax-exempt nonprofit.  Funders and others have so hopelessly blurred the lines that regular citizens simply don’t know the difference, forcing them to make kneejerk decisions that might hobble their futures without even understanding the choices they might be making.  The other Gordian knot is membership itself.  People are clear they want leaders accountable, but it becomes harder for people to easily sort out their conflicting desires to both be inclusive in their community and also be effective as an organization.  Can just anyone be a member?  Should there be classes of membership with different rights and obligations?  Should members pay dues and agree to the principles of the organization?  Can nonresidents be members of a community-defined organization like Amani United, and what should be done about property owners who may be absentee landlords.

Yes, these questions aren’t easy to answer in the best of circumstances, but once everything about organizational and civic activity is “throw the rock and hide the hand,” people are left clueless in trying to devise a more perfect union in their own organization.

What can I say?  It’s a process!

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