Bad Times? Good Times?
by Bob Nechal
Bob has been a member of TCFM’s Finance Committee for several years.
He approached CDFR saying he had a contribution to our ongoing financial discussion.
We are happy to publish it.
What coulds’t thou say? We would like to read your ideas, and might be glad to publish them as well.
We believe this discussion of TCFM’s financial future
is a crucial part of our community’s development, going into the years ahead.
The discussion that we are having at Twin Cities Friends Meeting (TCFM) is providing a rich forum for an exchange of ideas about the amount of money that TCFM needs, and the meeting’s use of that money. There is much sharing of stories related to the purpose of the meeting’s funds and how these dollars should be managed at our meeting. From my perspective, however, the discussion needs a background review of today’s economic environment. Too often statements are made based on past experiences (and the associated assumptions) taking place in a very different time. I believe it to be important that we examine the economic makeup of our meeting’s members and attenders as well as the reality of today’s economy.
The US Economy in 2013
Unfortunately, we are living in the reality of the 1% – 99% paradigm. The income and wealth gaps are the widest in United States history and getting worse. Overall economic growth is anemic. The share of wages as a portion of the overall economy has declined from 70 to 64%. Except for the upper 1%, real wages are declining. The economically poor (bottom half of society) depend on some form of government assistance which is under continual assault of being eliminated or reduced.
Retirement security is rapidly becoming a dream rather than something one can look forward to. For many people pensions either have been eliminated or are disappearing. Social security is under threat and will surely bring fewer benefits in the future. Today, when someone contracts a life threatening disease, people without adequate health care insurance die 5 years sooner than those who have high quality health care insurance.
Profile of Twin Cities Friends Members & Attenders
I have been a member of TCFM for seven years and an attender for the two years prior. I offer the following groupings for the purpose of clarifying our thinking regarding our conversation about money. TCFM’s members and attenders seem to break out into 3 separate groups with each having a unique economic profile.
- Older friends – made up of folks nearing retirement up to people who are living as active 90+ year olds. The bulk of the meeting’s wealth resides with these folks and they contribute generously. Their incomes are for the most part stable. The group’s contributions will diminish as people pass away.
- Middle aged friends – made up of working professionals who live busy lives and are facing financial challenges. Paying for college is $25,000+/year for a public school and $50,000+/year for a private school. To support 2 children going through 4 years of college is a total cost of between $200,000 – $400,000. These folks also need to fund their own retirement, and hope that the market doesn’t crash and wipe out their retirement funds. Many have to support their children during their children’s early adult years because the children cannot find decent paying jobs. It is highly unlikely that our middle aged friends will be able to replace the disappearing income coming from older friends.
- Young friends – made up of young adults (35 and younger). These folks either are doing OK (paying their bills, saving a few dollars), just making it (living from paycheck to paycheck, perhaps using a little credit) or losing ground (marking time by taking on debt or by living off the generosity of others). No one knows the future but economically speaking, this group of people is unlikely to earn as much money as the first two groups. This group’s ability to contribute significant dollars to TCFM’s finances is problematic.
What is the significance of this assessment and its implications for the conversation about money?
- It is unlikely that TCFM members and attenders contributions can be expected to increase over the near term and mostly likely will decline as our elder members pass away.
- The meetings ability to rapidly raise money from its members and attenders is likely to diminish over time. People will not have as much money that can be allotted to the meeting.
Overall, the financial ability of TCFM members and attenders to contribute to the meeting’s finances can be expected to decline. It is prudent to take this reality into account whenever there is a discussion about the meeting’s long term financial strategy.