Windfall of funding

Sudden wealth isn’t a topic that would typically be part of a basic financial literacy course. It seems like even more of an odd fit for a new program for low-income Manitobans.

“We’ve been picking up on what people we worked with in the community have been asking about,” says Lisa Forbes, manager of social enterprise and fund development at SEED Winnipeg Inc.

Called “Sudden Wealth and Investing Basics,” the pilot is a response to what SEED has been hearing from Indigenous youth who may soon be recipients of legal settlements, she says.

These notably include a $530-million settlement to compensate children in care from 2005 to 2019 in Manitoba who had grant money unfairly clawed back and a $23-billion federal settlement over discriminatory child welfare practices and chronic underfunding.

“Overall, there is just more momentum in Indigenous communities about the need for skills to manage the money that may come,” Forbes says, adding the settlements per individual might range from a few thousand to tens of thousands of dollars — for individuals who grew up in foster care, these sums can be life-changing.

Also notable, however, is the program’s funding.

The Canadian Investment Regulatory Organization, which regulates the investment industry, is providing funding accrued from penalties from rule-breaking advisers and investment dealers. Overall, a handful of non-profits from across Canada, including SEED, will receive a share of the $1.7 million from CIRO.

“Specifically, these grants support organizations focused on underserved communities,” says Alexandra Williams, senior vice-president for innovation, strategy and stakeholder protection at CIRO.

She explains SEED received funding based on its proven track record of providing programming embodying the Truth and Reconciliation Committee of Canada’s call to action for more financial literacy and economic empowerment initiatives for Indigenous Peoples.

The SEED initiative is indeed a welcome addition, says a Métis wealth adviser in Winnipeg.

“It’s a great idea,” says Rob Tetrault, senior investment advisor and portfolio manager with CG Wealth Management, who has conducted seminars helping individuals receiving windfalls, including a few from Indigenous communities.

“I’m a big believer that people need to be armed with the right information to ask the right questions of financial advisers,” he says.

But that financial education component also must address the emotional impact of receiving lump sums of money.

“The message there is really about slowing down to take a breath” before making decisions, especially given individuals often experience a lot of social pressures, he adds. “In the first six months, relatives and old buddies come out of the woodwork seeking money.”

In turn, Tetrault suggests tucking the money into a savings account for a few weeks, leaving it largely intact — barring paying off debt and bills— while working to acquire the skills to figure out how to ensure the windfall has a maximum positive impact.

“Otherwise, you’re going to want to buy a million things, right?” Tetrault says. “That said, you can buy one thing to scratch that itch to splurge, but then tell yourself you’re going to wait until you figure out more long-term goals you want to achieve.”

The new SEED program addresses those psychological pressures of a windfall. “One of the activities focuses on encouraging individuals to take some time for reflection,” Forbes says.

Certainly, budgeting, saving and investing are also basic elements of the initiative. Yet given the money could be coming from a settlement, “It might be viewed as the result of something bad that has happened, which can come with a lot of emotional weight,” Forbes says.

Many individuals the program aims to support have told SEED they want any money they receive to have a positive impact in their lives, for their families and communities.

“They still want to purchase items they always wanted but could never afford before, but these young people are also talking about opening tax-free savings accounts and investing for their future.”

To do that, they recognize they need the skills and knowledge to navigate the financial system.

“People who grew up in foster care often don’t have that know-how — like opening a bank account or contributing to an RRSP (Registered Retirement Savings Plan),” she says. “And so that knowledge must come from somewhere.”

SEED is well-positioned to be that provider of financial knowledge, Forbes adds, given built up trust in Winnipeg’s Indigenous community. “They want to learn from a source for that knowledge that doesn’t have any angle.”

Indeed, SEED (Supporting Employment and Economic Development) has no “angle.” That said, it does have a mission, Forbes says.

“That mission is providing financial empowerment programs that alleviate poverty for Manitobans.”

Indeed, its new Sudden Wealth and Investing Basics program is a well-tailored fit after all.

Joel Schlesinger is a Winnipeg-based freelance journalist.

joelschles@gmail.com