I was asked to respond to a series of questions about philanthropic and investment needs in my area. Here are the questions, followed by my answers:

1.       What are the top Lending, Investing and Giving opportunities?
2.       What are the pressing issues in the community? What has changed from last year and how can we be more responsive?
3.       What are the emerging needs/trends within the broad issue areas: such as Affordable Housing, Workforce Development, Education, Neighborhood Preservation, Health/Human Services – Critical Needs?
4.       Are there certain issues [survey sponsor] is or can be addressing through volunteerism? Please give examples. 
5.       Are  Nonprofit Board memberships, VITA, Financial Literacy in Schools (youth) and for Adults important needs in your community. Please specify which ones.
6.       Do the Bank of America Nonprofit Impact Series webinars and Connect to Own webinars (which provides nonprofit capacity building training to assist nonprofits) address community needs? If you are unaware of these webinars, do you see a need/added benefit for them in your community? How can [survey sponsor] complement these efforts?

My answers:

1.       Downtowns are making a comeback, and that trend presents some investing and lending opportunities. The city of Wilson, with some private investment partners, has recently rehabbed two downtown commercial buildings into residential lofts. These projects are rentals, but similar projects could be created with owner-occupied condominiums. Similarly, older residences in the downtown perimeter could be a good investment for lenders willing to be flexible with buyers interested in renovating older homes. By doing this, neighborhoods could be stabilized and residential decay could be stanched. Giving opportunities abound in this same downtown area. Historic preservation organizations and low-income housing nonprofits, such as Habitat for Humanity, can encourage redevelopment of older neighborhoods. Donations to these nonprofits can create a symbiotic relationship with investment strategies in the same area.
2.       The largest impediment to economic growth and success, in my opinion, is the low level of education in too many eastern North Carolina counties. Lack of education and social skills present an insurmountable barrier to good jobs. Too many eastern North Carolina families suffer from multi-generational aversion to education. Parents who did not have a good public school experience will not encourage their children to study and work hard. They will not push their children to learn; the parents may even harbor hostility toward teachers and other authority figures, and this hostility is passed down to the children. Single-parent families tend to exacerbate these problems because of the lack of a loving authority figure and the inconsistencies and uncertainties related to coming and going of adult males in the home. Bringing stability to children can be a first step in breaking this cycle, but greater efforts are needed to improve parenting skills and raise the priority for education. Since last year, home construction and renovations have picked up. If this activity can be routed to help low-income families through lower-cost home ownership, the impact can be long-lasting.
3.        The trendiest concern in the community seems to be hunger in children, but I question the validity or at least the urgency of this issue. Advocates cite statistics about “food insecurity,” a term too vague to track with any certainty. Federal SNAP (Supplemental Nutrition Assistance Program, previously known as food stamps) provides food assistance to millions. Some surely slip through the cracks, but I do not think the need is as great as the publicity this issue receives would imply. Education and affordable housing, it seems to me, are more urgent and carry the possibility of long-term solutions rather than just supplying the next meal. Historic preservation can work in conjunction with affordable housing efforts if underused or abandoned structures are renovated as affordable housing. I don’t question the need for crisis assistance of various types, but I think the best philanthropic investment will be in long-term solutions to deeply rooted problems.
4.       Every nonprofit needs volunteers. [Survey sponsor] can create a culture of volunteerism and encourage employees to volunteer in a variety of different ways, getting employees (who may already volunteer) to work outside their comfort zone. Any volunteering is valuable. Volunteering that alters the lives of the volunteers and the clients is the best of all.
5.       Our community is fortunate to have many committed nonprofit board members, but it can always use others with different skills and ideas. Financial literacy education is needed in schools and among adults as well. In my career, I hired many young college graduates who had a degree and good skills but had little concept of what it meant to live on a budget, pay taxes and save for the future. Financial literacy is a needed course of study in both elementary and secondary education. Financial literacy is also a crying need in the adult population, especially the lower-income population. An example: an applicant for low-cost housing explained that her biweekly paycheck is electronically deposited into her bank account. The day the money hits the bank, she goes to the bank, takes out all the money in cash and carries it around in her purse, paying bills in cash until the next paycheck. She saw nothing wrong with her system, which is not uncommon. Many adults do not understand interest rates, savings accounts, or how to keep track of their money. Smarter financial decision-making could boost the entire economy.
6.       Frankly, I have not found the [survey sponsor] webinars particularly valuable. Because they are aimed at such a broad audience, and my situation is somewhat unusual because our nonprofit is so small.
 

Retirement dreams crumble before reality

When my 401(k) statement came in the mail earlier this year, I refused to open it. I knew the balance would be nauseatingly bad. I didn't need more bad news. I had not gone online to look at my statement since last July, before the credit crisis sledgehammer battered all investments. That was when I took the advice of a couple of former colleagues who were more experienced investors and closer followers of the markets than I and converted some of my cash account into an Asia-Pacific fund on the sage advice that Asian markets would do well even when U.S. markets were down.

Today, half the money I put into that fund is gone. Bravely, I called up my account this morning to see how bad the damage was. From the peak of my retirement investments, which I had built up over 20-some years of sacrificial, consistent saving, I had lost about a third of what I had. Even through the end of last year, knowing that my paychecks were coming to an end, I kept saving, thinking that, with the market down, I'd be buying cheap.

Now, with no more money coming in and no more money going into my 401(k),  I'm no longer "buying cheap." I'm just watching my investments dwindle, and with them the financial security I had hoped to gain for retirement. When 401(k)s and IRAs were first marketed in the early 1980s, the television commercials touted the possibility of retiring as a millionaire. Given the double-digit interest rates at the time and 30 or 40 years to invest, such a scenario seemed plausible. More of a realist, I never thought I'd reach those lofty levels, but I did hope that my persistent savings and investing luck might lead to a nest egg of as much as $500,000. After the tech bubble and NASDAQ collapse around 2000 wiped out about a third of my funds, I recalculated my dreams and hoped I might reach $300,000 by the time I reached retirement age, and I seemed on track to achieve that, or come close to it.

But last year's worldwide market collapse and the loss of my job has shattered even that downgraded dream and forced me into a new reality. Today, after looking at all the negative returns from every fund in my account, except cash, I surrendered and transferred a large chunk of what was left in stocks and bonds to a cash fund. The cash fund won't stay ahead of inflation, paying maybe 2 percent, if that, but a tiny increase is better than a big decrease.

My experience is multiplied by the millions as American workers have been led to believe that 401(k)s and IRAs would provide for their retirements, supplementing the Social Security checks that will provide for a subsistence existence, at best. Defined-benefit pensions, which once dominated American corporations, have largely disappeared, replaced by individual investment accounts. Only governments and a few large corporations are still offering pensions; the rest of us are left at the mercy of the stock market.

For people my age, there is little time for the market to recover its losses, and the lost income while the market tanked might never be recovered. The golden age of retirement has passed. I have already conceded that, once I find a job, I'll need to work well past my usual retirement age. Millions of others in my age cohort are reaching the same conclusion.

The 1980s promise of retiring a millionaire has been replaced with the reality that, for many of us, retirement will never happen.