The following is excerpted from Issue 23 of The Corporate Citizen. To learn more about how your community involvement efforts can connect to overall business success, read the Community Involvement Study, available exclusively for members. Not a member? Learn more about corporate membership with the Boston College Center for Corporate Citizenship.
Since first opening its doors in 1975, Vanguard has flourished using a business model that is built on three foundational values: integrity, focus, and stewardship. A "mutual" mutual fund company, at Vanguard there are no outside owners—instead, the company is owned by its funds, which in turn are owned by their shareholders. As such, Vanguard has the privilege of serving as a dedicated steward of not only its clients' investments—but also of its communities, as the firm understands that strong communities are key to sustainable growth and prosperity.
Vanguard also understands that these communities are only as strong as their most vulnerable members—children. That's why Vanguard's Office in Community Stewardship focuses its efforts to advance early childhood development and education.
"The same philosophy we share with our clients helped shape our cornerstone philanthropic focus: Investing early pays off. Decades of research demonstrates that high-quality evidence-based investments made early in a child's life lead to measurable and lifelong cognitive, emotional, and economic improvements," said Carra Cote-Ackah, Vanguard's executive director of community stewardship.
Vanguard has developed a number of initiatives to achieve its objective of supporting and educating children, including the My Classroom Economy program, which makes use of its employees' unique skills and resources to increase financial literacy. During Boston College Center for Corporate Citizenship's 2017 International Corporate Citizenship Conference, experts at Vanguard treated attendees to a deep dive into the program, which integrates free materials into K-12 classrooms to bolster students' understanding of money, how to budget and save, and how to put it to work for them. The My Classroom Economy program can be downloaded and utilized by any educator who wishes to instill in students a deeper understanding of financial trade-offs, including the value of money and the concept of compounding.
"My Classroom Economy builds on our business expertise and on our investment philosophy," said Cote-Ackah. "This program helps students increase their financial understanding and sense of responsibility so that they are better positioned to begin making successful investment decisions—as early as kindergarten with age-appropriate curriculum."
The 10-week program can be used just as easily in an English class as in a Math course, and is experiential in nature. The creation of a "mini-economy" in the classroom essentially works as follows: Students earn (make-believe) money for doing a pre-appointed job (elementary school students may receive wages for being a line-leader; high school students might have jobs that more closely mirror those outside the classroom, like banker or engineer). Bills, taxes, rents, and fines must be paid, while opportunities to earn bonuses, buy insurance, participate in auctions, and invest are also available. Teachers are able to customize all elements of the classroom economy so that the program functions as an overlay to their curriculum.
My Classroom Economy's impact is extensive: Since 2011, the program has reached 50 states, benefiting more than 600,000 students. Developed with the help of educators, the program has continued to evolve thanks to early pilot participation and ongoing research studies. A large part of the success of the program can be attributed to Vanguard crew (employees), who helped create and build out My Classroom Economy on top of their regular nine-to-five responsibilities.
"We are leading programs that really put a giant stamp of generosity and altruism on our company," said Kyra Scalea, Vanguard’s manager of community stewardship. "At Vanguard, our corporate culture of doing the right thing permeates through our volunteer program and corporate citizenship strategy. We do the right things for our clients, our crew, and for our communities."
By aligning this initiative with its corporate goal of helping others achieve financial literacy, Vanguard is not only preparing My Classroom Economy participants for financial success, it is also attracting the kind of employees who share Vanguard's values. Research has shown that potential employees are attracted to companies with good corporate citizenship performance in part because they anticipate pride in working for that organization, expect that their values would be aligned, and believe that the company treats its employees well. [i]
These comprehensive benefits of My Classroom Economy are not lost on Nate Prosser, senior manager of leadership development at Vanguard, who explained, "By tying My Classroom Economy to Vanguard's core purpose, which is to take a stand for all investors and to treat them fairly and give them the best chance for investment success, we created a program that resonates with people—both internally and externally."
[i] Jones, D., Willness, C., & Madey S. (2014). Why are job seekers attracted by corporate social performance? Experimental and field tests of three signal-based mechanisms. Academy of Management Journal, 57 (2), 383-404.