Banks and the Fight Against Generational Poverty

Last week the Indiana Bankers Association had the privilege of hosting the 2014 meeting of the Central States Conference, welcoming 16 state association executives and their volunteer leadership bankers to beautiful West Baden Springs, Indiana. Our closing speaker at the event was Dr. Ruby K. Payne, founder of a professional development organization called “aha! Process.” Dr. Payne addressed the urgent need for leadership at the local level in the fight against generational poverty. It was a nontraditional topic for this auspicious group – or for any bankers conference – yet the presentation was extremely well received. Ruby did an outstanding job of conveying the problems associated with combating poverty. What our country has been doing for the past 50 years clearly is not working. Poverty is more ingrained in our nation today than when we launched a war on poverty in 1964. Government assistance programs are designed to help people get by, not to get ahead. Giving money to sustain life does not solve the problem. Investing in education – both for those in poverty and those fortunate enough to be self-sustaining – offers a much better chance to stem the growing tide of poverty.

Ruby Payne’s program presents an opportunity to take a different approach. It is based on creating communication between those in poverty and those who are self-sustaining. Many community organizations, churches, local units of government and a few businesses have adopted the program worldwide. With the exception of the few businesses that have adopted it, the other organizations rarely have enough financial resources to underwrite the program appropriately. Part of the solution, in my opinion, is for business to become more involved. Specifically, the banker in each community has a self-motivated interest to help, plus that banker can bring other businesses to the table. The facts are that women without a high school diploma or a GED reproduce at a rate of 2.5 children each, while those women with a college degree reproduce at a rate of 1.1. Plus the average age of the mothers at birth differs significantly. Those without a diploma tend to have children while in their teens, while those with a degree tend to have children at about 30 years of age. Today in the United States, 46.5 million people are living in poverty, roughly 15 percent of the population. If current trends continue, within 100 years, more than 50 percent of the U.S. population will be living in generational poverty. Our form of government will be compromised or may even fail when more people are receiving support from government than contributing to it through the payment of taxes.

Consequently the very survival of our communities – and the banks and businesses in them – depends upon how we deal with this problem of generational poverty. Arguably, banks are in the best position to lead the charge in solving this problem. They are able to convene all other interested parties to collaborate locally to deal with their unique situations. I was pleased to walk away from the meeting last week knowing that Ruby Payne had struck a chord with my counterparts and the volunteer bankers who lead their respective organizations. Many thanked IBA for bringing this issue to their attention; many indicated that they want Ruby to speak to their members. Success, of course, will only occur after thousands of local communities adopt plans to combat poverty … and it will take a long time. It is difficult in today’s world of managing business in 90-day segments to plan for something that may take 30 years to be deemed successful. But as Ruby pointed out in her presentation, it often takes 20 years or longer to be an “overnight” success.

–  S. Joe DeHaven

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