Testimony

Helping Teachers and Communities Raise the Grade Among Californians on Personal Finance Matters

We're Facing an Epidemic

Consumers from California to the East Coast are facing challenges of epidemic proportion in understanding personal financial matters. Studies have shown that the public lacks adequate understanding of how to manage their financial situations. Growing personal bankruptcies, increasing credit card debt, rising loan balances and prevalent “buy now, pay later” attitudes have all fanned the flames of a burning problem—the public is in trouble and needs information and resources for handling personal finances and making the right decisions. Knowledge is power, and in this case, the right financial literacy resources and training will empower Californians to put out the fire.

As the distinguished guests—and the Honorable Assembly member Lieu—have noted here today, the need for personal finance education in California is extremely urgent. What we collectively do today will have tremendous impact on the future financial literacy of your constituents.

Our Mission: To Protect the Public Interest

In 2003, as part of its mission to help protect the public interest, the California Society of CPAs (CalCPA) began an evergreen program to improve the financial literacy of Californians. CalCPA members—CPAs—have the knowledge and skills to help educate consumers in the state. Understanding personal finance is a fundamental part of a CPA’s core skill set, so it was a natural fit for CalCPA members to help the public gain the knowledge and understanding necessary to overcome financial illiteracy. Serving as a free, public resource in this area helps CPAs fulfill their core mission to protect the public interest.

CalCPA has more than 30,000 members to help deliver personal finance education into California classrooms, donating their time to achieve a greater good. To demonstrate our commitment to raising the bar, CalCPA created the CalCPA Institute as a nonprofit organization formed specifically to promote financial literacy in California. This has helped CalCPA members to work with more than 7,000 California students annually and educate them about personal finance matters. The students our members work with are as diverse as our great state. They represent all races, faiths and cultures. They range from children working 40 hours per week to support their families to college-bound students who have had every penny they ever spent handed to them by parents. Interestingly, what our members have found is that many of those children who work full time and attend school full time are among the most astute with money and the lessons learned about money management; wisely using credit, budgeting, saving and investing resound strongly and are put into practice immediately.

Considerable Education Resources for California Teachers

CalCPA has numerous free resources available for teachers to help improve their students’ financial literacy, including these highlighted below:

• Our greatest resource is our people. CalCPA’s more than 30,000 financial professionals are available to serve our schools and communities as presenters, mentors and expert advisers. They can address any financial topic a teacher wants to cover. As CPAs, our members provide unbiased, objective advice and perspectives. Our members have no special interest other than protecting the public interest. 
• MoneyTalks DVD. This eight-minute DVD features “man-on-the-street” interviews with Californians that uses humor to describe how they manage their finances. The DVD is a great discussion starter to engage student and adult audiences alike in conversations about financial literacy. The California State Library system has already distributed MoneyTalks system-wide. The National Association of Black Accountants distributed MoneyTalks nationally as it launched a new financial literacy campaign. Several other state CPA societies are also using MoneyTalks as part of their own local financial literacy outreach. MoneyTalks is being incorporated into grass-roots outreach related to one of the prestigious Ad Council’s latest national public service campaigns—Feed the Pig. Feed the Pig is a joint effort between the Ad Council, the American Institute of CPAs (AICPA) and state CPA societies such as CalCPA. The campaign targets 25-34 year olds and encourages savings and other small steps consumers can take to improve their financial situations.
• NEFE/CalCPA Curriculum — The primary curriculum CalCPA’s CPA members deliver to high school students was developed by the National Endowment of Financial Education (NEFE), one of our partner organizations. CalCPA offers schools sample curriculum guides and student workbooks. These materials have been recently updated and a revised curriculum will roll out for the 2007-08 school year. The comprehensive curriculum guides provide background information, learning objectives, linkage to national standards, step-by-step instructions, visuals and dozens of enrichment activities. All of these materials are available free of charge to schools.
• “Taking Control” – A quick-read piece designed for high school students that gets them thinking about their own level of financial literacy.
• Teacher Training Workshops – CalCPA and CalCPA Institute, along with the University of California Cooperative Extension and the California & Nevada Credit Union League, will host multiple teacher training workshops during the 2007-08 school year. Materials from these workshops will also be made available at various teacher conferences and forums throughout the state.
• California Summit on Financial Literacy – In 2006, CalCPA and the California Jump$tart Coalition co-hosted the first California Summit on Financial Literacy, which was attended by more than 500 individuals and many of your distinguished guests here today were either speakers or active participants during the summit. In 2008, we would like to build on the success and host an event for California high school and college educators focused on financial literacy.
• Financial Smarts for Teachers – CalCPA is working with the California Jump$tart Coalition and California Council on Economic Education on a program called Financial Smarts for Teachers, which provides personal finance education to teachers so they will have a better understanding of their own finances, and in turn will be better prepared to teach the subject to their students.

What Has CalCPA Accomplished?

Involved in hundreds of financial literacy efforts statewide, CalCPA and its members have been able to contribute to improving the situation for the public by educating them and improving their knowledge. Below is a sampling of some of CalCPA’s accomplishments:

Reaching Thousands of Californians

• CalCPA members spoke to more than 10,000 Californians in 2006—more than 20,000 Californians since our financial literacy initiative launched.
• During the 2005-06 school year, CalCPA member volunteers visited hundreds of classrooms and made financial literacy presentations to more than 7,000 students.

Making a Difference in the Classroom

• CalCPA and its members are working with student groups at San Francisco State, University of San Francisco, CSU Stanislaus, CSU Sacramento, CSU Los Angeles, San Diego State University, CSU Fullerton, Cal State Pomona, Cal State San Bernardino and other universities to advance personal finance education on those campuses or in their communities.
• In 2006, in collaboration with the California Teachers Association, CalCPA members presented personal finance lessons to all juniors and seniors at Hiram Johnson High School.
• Developed free toolkits for use in CalCPA’s Dollars & Sense programs that cover financial matters seen in 12 different life stages, from high school to retirement. These kits have been adopted nationally as part of the AICPA’s 360 Degrees of Financial Literacy program.

Helping Local Communities

• Hundreds of CalCPA members are involved with Junior Achievement as volunteers.
• CalCPA members support public education by providing regular money management articles to newspapers statewide. Additionally, CalCPA members have done a series of educational briefings with reporters on understanding financial statements.
• Lead dozens of Dollars & Sense presentations, including some hosted by legislators. Other hosts have included senior centers, businesses, associations, colleges, community groups, churches, nonprofits and others. Presentations have been made in English, Spanish and Mandarin.
• Since 2006, in cooperation with the California National Guard’s Operation Ready Families Program, CalCPA members have offered free tax counseling services to military personnel and their families at National Guard armories statewide.
• CalCPA members help thousands of Californians each year via tax call-in programs with television and radio stations, as well as newspapers.
• In November 2006, CalCPA co-hosted a 5k/10k race in Los Angeles that provided an avenue to disseminate financial literacy information to more than 900 runners and raise awareness regarding financial illiteracy.
• CalCPA members prepare thousands of pro bono tax returns annually for low-income taxpayers in California through participation in programs hosted by Tax-Aid, the IRS Volunteer Income Tax Assistance (VITA) and legislators.
• For the past few years CalCPA members have provided low-income families with college-bound children pro bono tax estimates as a part of the SUCCESS Consortium’s Cash for College program, an initiative that involves several legislators.
• CalCPA members participate in dozens of community-based programs that provide personal finance education in under-served communities, including:
  • The Wall Street Wizards, a financial literacy program for African-American youth in Oakland and the San Francisco Bay Area.
  • Larkin Street Youth Services in San Francisco, which provides resources and service to homeless youth. CalCPA members educated caseworkers so they were better equipped to help their clients move toward financial independence and off the streets.
  • Community Self-Sufficiency Collaborative in Ocean Beach to provide financial planning, budgeting and money management education, as well as help individuals and families apply for the Earned Income Tax Credit.
  • Through connections with AARP and local Councils on Aging, CalCPA members have delivered workshops to hundreds of senior citizens.
  • Presentations also have been made to pregnant teens, victims of domestic violence and others.

Assisting Business Owners

• CalCPA has partnered with the U.S. Department of Labor on several programs, all designed to increase the financial literacy of small-business owners. They have included educating women and other small-business owners on setting up and administering pension, health and other benefit plans, and as well as increasing financial professionals’ fiduciary responsibilities as they relate to such plans.
• CalCPA regularly collaborates with the San Francisco Hispanic Chamber of Commerce and Small Business Administration to provide financial education to primarily Latino individuals and business owners in San Francisco.

Resources for Disaster Victims

• Often, individuals do not take advantage of financial information and resources until disaster strikes, and this is why CalCPA has established a disaster recovery partnership with the IRS. This partnership, which launched after Hurricane Katrina, places CPAs at Federal Emergency Management Agency (FEMA) and other disaster recovery sites following federally declared disasters to provide assistance to victims. The IRS has recognized CalCPA member volunteers for their efforts. Additionally, prior to the partnership, CalCPA has demonstrated years of commitment to providing disaster recovery assistance following disasters in California. These efforts include mobilizing volunteers and providing pro bono assistance.

Through CalCPA’s Web site, www.calcpa.org, CalCPA makes available articles and podcasts on money management and personal finance topics. The site also includes an Ask a CPA (www.calcpa.org/ask) feature through which the public can submit specific, financial-related questions to CPAs.