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The Case for Social Capital Literacy

Let us ask you a question, and we want an honest answer.

If you were to pass away tomorrow what’s your plan to pass your valuable social capital to your heirs?

Every dollar you earn, every piece of real estate you own, and each investment portfolio you possess, if you’re wise, you want them to be left to your children. For even the Bible says, “a good person leaves an inheritance to their children’s children.”

The accumulation of assets without a plan typically sounds, at least in some investment circles, sacrilegious. Why would a person work so hard to leave all their assets to Uncle Sam? While most of us intrinsically know the importance of estate planning, many don’t do it. Stories of relatives who passed without a will read like a phone book, and the drama that ensues resembles a horrible soap opera.

That’s why estate planning is a key component of financial literacy training. However, there is another all important literacy that needs to be developed in many communities. We would argue that it’s equally, if not more, important than financial literacy because it’s about the only asset that always keeps giving. We’re talking about social capital literacy.

At Social Capital Builders, we define social capital as the value of an individual’s connections to people, institutions, and organizations. In our national survey of 633 adults, 44% landed their job through a personal connection.1 Social capital is what gives people the valuable labor market information they need to make better decisions about careers, investments, and actions.

Hear us out. Regardless of the number staring at you from your bank account, or the value of your financial portfolio, you possess something more valuable that you can pass on to your children and, if you feel remotely philanthropic, some of the less fortunate youth in your community. You have a legacy that can give them the tools to flourish, lifting them up into great opportunities that can bring them success. What you have is social capital.

Why are some groups earning six times the poverty rate and others are stuck in it? Is it simply education, training and credentialing? If we are honest, social capital is what usually determines the quality of the work experience, the value of the credential, the relevance of the skill, and the likelihood of getting into college, and more importantly, the chances of completing it. 2

That’s why at Social Capital Builders, we created the world’s first Social Capital Literacy Curriculum. Social capital literacy is an understanding of the value of authentic, high value connections and the ability to audit, access, build, maintain, manage, grow and effectively use various social capital building skills, tools and strategies to promote lifelong financial and social well-being. A growing body of research now points to the pivotal role social capital plays in long-term labor market success and economic mobility. Researchers using data from the National Longitudinal Survey of Youth discovered that young and older adults (ages 29-43) who obtained their job through their social network had higher wages relative to adults who used formal job searching techniques.

If we placed equal or greater effort in helping low-income youth of color develop social capital literacy like we do financial literacy, maybe they would have better chances at earning some real finances. Remember, this generation is the first that will not earn more than the generation that created them. The gap between the haves and the have-nots continues to widen and the pandemic has turned economic chasms into craters. Helping young people of color develop the social capital literacy to compete in the 21st century is where we are investing our capital. How about you?

Edward DeJesus is the President of Social Capital Builders. Sign up for the Opportunity Newsletter and stay updated on the work of Social Capital Builders.