K-12 Pilot Programs Shape Tomorrow’s Entrepreneurs

A well rounded K-12 educational system has long been regarded as a prerequisite for robust regional growth. An accessible supply of early stage capital is another key ingredient for entrepreneurship. Can both be accomplished simultaneously?

A recent white paper from CFED suggests yes, public school systems can do more to prepare students for participation in the entrepreneurial community. Linking Youth Savings and Entrepreneurship proposes it could be as simple as combining existing education programs to encourage entrepreneurship while promoting sound personal fiscal management. The result is students building their own nest eggs to launch entrepreneurial opportunities once they finish high school or college.

Several pilot programs specifically address the need for entrepreneurial education in K-12 schools, adding a finance twist as well:

* Since 1979, the REAL (Rural Entrepreneurship through Action Learning) Entrepreneurship program uses school-based enterprises to teach students of all ages in a variety of venues about small businesses and financial responsibility while addressing the needs of the community.
* People for People Inc. at Philadelphia’s People for People Charter School recently completed its second school-based enterprise, enabling fifth- and sixth- graders to earn money to deposit in SEED (Saving for Education, Entrepreneurship, and Downpayment) savings accounts provided by the organization’s Community Development Credit Union. These accounts provide incentives for future savings through matching funds and must be used to finance higher education, start a small business, buy a home or retirement.
* Mountain Top Café, a coffee shop created and run by special education students at Kennesaw Mountain High School in Georgia, also provides delivery through an online ordering system. The project began after teachers received training at a Georgia REAL Institute and were able to adapt the curriculum for a special education environment. In addition to the workplace training, students also have an opportunity to deposit their earnings in savings accounts or invest in the business.

By offering opportunities to learn about small businesses and save money for life after graduation, these programs make students more comfortable participating in the regional economy, CFED writes. Programs that have linked participation in school-based enterprises to student savings accounts have experienced greater success on both fronts.

Encouraging kids to save money is not easy, however. More than 2,000 SEED accounts are being tested as a tool for financial education at 13 sites around the country. CFED writes that many have found matching funds and other financial incentives have not been sufficient to encourage student saving. The study found a majority of current program partners agree that adding school-based enterprises can increase successful participation, while teaching students personal fiscal responsibility at the same time.

For developing regions, these school-based programs create a foundation for increasing entrepreneurship and investment, encourage personal savings, lower future bankruptcy rates by improving financial management skills, and give students the means to save money for college and business start-ups.

CFED suggests an additional benefit is these entrepreneurship-finance programs provide an opportunity to bring together financial institutions, local entrepreneurs, schools and citizens to discuss and promote regional development.

Linking Youth Savings and Entrepreneurship is available at: http://www.cfed.org/publications/documents/Linking_Youth_Savings_Entrepreneurship_final.pdf

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