Operation HOPE expands reach of "silver rights" initiative to deliver financial literacy
program aimed at helping teens and young adults think more strategically about spending
LOS ANGELES, CA – November 19, 2008 – Recent survey results show African American high-school seniors and college students are still trailing behind their white counterparts in financial literacy, according to a study issued today by "silver rights" organization Operation HOPE (HOPE). The nonprofit believes the outcome reflects an increased need for financial education.
Dr. Lewis Mandell’s commissioned report compares test results of African American students, and shows that financial literacy of African Americans is related to income, among other things. For the third time, results reflect a decline in scores.
When contrasted with the financial literacy of whites with the same incomes, the highest income African Americans (those with family incomes above $80,000) had financial literacy scores that were just 71.9 percent of whites. In contrast, the lowest income African Americans had financial literacy scores that were 95.6 percent that of whites in the same income group. The report also revealed that African American students are better spenders than savers.
In contrast to young white adults, African American high school seniors of the same age are more likely to use credit and debit cards, are less likely to have a bank account, and are less likely to work part-time or summers while they are still in high school. This orientation toward consumption and away from saving may help explain higher relative scores of African Americans on spending rather than saving questions.
However, the picture brightens slightly as high-school African Americans move on to college. In 2008, the nationwide financial literacy survey included college students; as anticipated, college students in general turned out to be far more financially literate than high school seniors. College students carried a mean score of 61.9 percent compared to 48.3 percent for high school seniors. Also improving was the racial gap between African Americans and whites, which closed to 88.9 percent for college students as opposed to 78.7 percent for high school seniors.
The gap has prompted Operation HOPE to expand its "silver rights" campaign – developing a program to stem the high-school drop-out epidemic by educating 5 million youth, their teachers, parents and guardians in financial literacy. Additionally, in 2008 the organization began a five-year partnership with the White House Initiative on Historically Black Colleges and Universities (HBCUs) to provide money management skills to students of the 105 HBCUs nationwide.
"Education is the ultimate poverty eradication tool," said Operation HOPE Founder, Chairman and CEO John Hope Bryant. "While all young Americans are in need of and deserve to learn financial survivorship skills, this is particularly important for African Americans who currently lag in both the financial resources and financial literacy necessary to become stakeholders in our ‘ownership’ society."
Of the 6,856 students who took the national survey, 13.6% or 931 were African American. Additional statistics show that:
- African American students from the lowest income families had a financial literacy score of 47.6 % and African American students from the highest income families had a score of 54.8%.
- African American students scored 36.7% on Money Management, 37.1% on Savings but 43.2% on Spending.
This survey is the third report commissioned by Operation HOPE in cooperation with Dr. Lewis Mandell of the University at Buffalo School of Management and the Jump$art Coalition that tracks the financial literacy of African American young adults as a stand-alone group. Click here to access the full report.
About Jump$tart Coalition for Personal Financial Literacy
The 2008 Jump$tart Survey, the Financial Literacy of Young African-Americans Adults, was prepared by Dr. Lewis Mandell, Jump$tart Coalition for Personal Financial Literacy and State University of New York at Buffalo and is based upon a Survey sponsored by Merrill-Lynch. Jump$tart began measuring the financial literacy of you ng adults in their last year of high school in 1997. The widely reported results tell a dismal story. Few high school seniors are capable of passing a multiple choice examination which measures their ability to make informed financial choices in matters that are critical to persons of their age. To compound this problem, scores have declined significantly since the test was first administered in 1997. At the request of Operation HOPE, a separate analysis is conducted to measure the financial literacy of African-Americans who were included in the overall Jump$tart survey.
About Operation HOPE, Inc.
Operation HOPE is America’s leading nonprofit social investment banking and financial literacy empowerment organization. With more than 400 private sector partners, 1500 nonprofit organizations and schools, and 100 government partners in 68 major U.S. cities as well as South Africa, Operation HOPE has raised more than $400 million in its pursuit of educa ting, assisting and inspiring the next generation of global stakeholders. Through international initiatives and its three principal programs: Banking on Our Future (teaching school children about money), HOPE Coalition America (financial emergency preparedness and disaster relief), and Walk-In HOPE Centers (loans, bill pay, computer literacy, understanding banking principles) Operation HOPE has assumed the responsibility of piloting the "silver rights" movement towards making free enterprise and capitalism relevant to all underserved communities.