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Minors Trust Research

Minors Trust Research. October 2015. MINORS TRUST RESEARCH. BACKGROUND AND OBJECTIVES. The amount of Big Money payouts for enrolled members is growing every year – with associated problems and concerns.

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Minors Trust Research

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  1. Minors Trust Research October 2015

  2. MINORS TRUST RESEARCH BACKGROUND AND OBJECTIVES • The amount of Big Money payouts for enrolled members is growing every year – with associated problems and concerns. • Xxx leadership asked Tribal Council to look into the idea of staggering Big Money payoutsto minors receiving payouts for the first time versus the current system of lump sum payments.

  3. MINORS TRUST RESEARCH METHODOLOGY • An outside research expert was brought in to oversee the multi-phase research, with enrolled XXX members conducting the data collection. • Treasurer, Treasury Manager, and Financial Skills Educator attended community club meetings to discuss the research and hear input from community members.

  4. MINORS TRUST RESEARCH METHODOLOGY 8 FOCUS GROUPS Community members from all areas except XXX were represented in the groups Potential participants were selected randomly and invited to groups; show rate was poor but was supplemented by personal contacts Each group included 2 to 7 respondents and lasted 90 minutes One group was moderated by outside researcher Jessica Broome; the remaining groups were moderated by XX member XXX Groups took place between August 10 and September 1, 2015 • 2 groups each of 4 segments: • Adults 18-21(received Big Money recently) • Adults 22-28(received Big Money in the past) • Adults 40+(never received Big Money) • Parents ofminors 15-17 90

  5. MINORS TRUST RESEARCH METHODOLOGY 297 INTERVIEWS 10 enrolled members were trained in interviewing techniques and conducted 297 face-to-face surveyinterviews with enrolled XXX members living on the XXX between August 31 and October 4, 2015. (See Appendix for instruments) Survey respondents were randomly selected from tribal enrollment records; addresses verified by Emergency Services. Response target was 5% of enrolled Boundary residents, with all communities proportionally represented.

  6. MINORS TRUST RESEARCH RESPONDENT PROFILE BC SB 45% Male 55% Female YH BY 18% recipients of big money payouts CC PT WT BT 32% parents of recipients 44% parents of expected recipients *Caution: Small base size

  7. MINORS TRUST RESEARCH KEY FINDINGS Financial Education Only one-third (34%) think minors they know are educated about finances Two-thirds (66%) of enrolled adults want more financial education 22% favor both 53% only favor staggering 21% only favor lump sum 93% have witnessed negative behavior by Big Money recipients

  8. MINORS TRUST RESEARCH Detailed Findings

  9. MINORS TRUST RESEARCH MINORS NEED INTENSIFIED FINANCIAL EDUCATION “They’re coming into money, and a whole generation, two generations before them, has never been taught how to be fiscally responsible.” –Parent “[The online class] was really easy to pass. Everyone I’ve talked to said that it didn’t teach them about finances or tell them what they should do with their money. I don’t think it should be online, it should be an actual class.” –Adult 22-28 “If you require them to take a class in Financial Literacy on their Minors’ Fund, $120,000 can change your life. It changed my life.” –Adult 18-21 Only 7% feel minors are very educated 34% feel minors are “very” or “somewhat” well educated in finances

  10. MINORS TRUST RESEARCH THERE IS ALSO A CALL FOR FINANCIAL EDUCATION AMONG ADULTS 24%feel they are very well educated in finances 66% are interested in morefinancial education “A lot of the stuff that people are missing, they might not want to come and hear in front of everybody else for fear of scrutiny or whatever. They could go to the library and watch a YouTube tutorial about things.” -Parent

  11. MINORS TRUST RESEARCH FINANCIAL EDUCATION SHOUD COME FROM PARENTS – AS WELL AS OTHER ENTITIES

  12. MINORS TRUST RESEARCH USES OF BIG MONEY “You know they just got their money, driving these high-dollar cars. A month later, you see them walking. And they're broke.” –Parent • 93% have seen at least one negative behavior • “When they get this Big Money, the first thing that looks in their eyes is the mall.” –Parent • “Then there are what they call vultures that wait on these kids to get their money and then they pounce on them.” –Adult 40+ • “I’ve heard of parents telling their kids, ‘you owe me this much for raising you.’” –Adult 22-28 • “It gives you the opportunity to have something. It’s good for some people that really, really need it, who have never had any disposable income.” –Adult, 22-28 • “You could start a business if you wanted to. Loan free.” –Adult 18-21

  13. MINORS TRUST RESEARCH SUPPORT FOR PAYMENT TYPES

  14. MINORS TRUST RESEARCH WIDESPREAD SUPPORT FOR STAGGERING PAYMENTS This is clearly a contentious issue, with passionate arguments on both sides—sometimes from the same person. However, we see broad support for some form of staggered payments. 53% 21% Only Support Staggered Payouts Only Support Lump Sum Payout • Bigger payout • Less tax burden • Less vulnerable to predators • Growing maturity • Increased money management skills • “If they get a staggered amount, the first part at 18, they spend it all up and they go broke and they say, hopefully, ‘Wow, I don’t want to do that again.’” –Parent • “I don’t think that giving a lump sum is good for anybody—not even an adult.” –Parent • Some are mature enough to handle it • Some need it for family, home, etc. • Staggering creates a “culture of dependence;” may dissuade work • Expected resistance from recipients • “[Staggered payments are] too little for kids if they want to buy a place to live or a car. And some of them have kids already.” –Parent • “[If staggering is implemented], some kids will think they’re trying to be controlled, like the Tribe’s trying to save their money and that’s not what they want to do. Like the Tribe is trying to tell them what to do.” –Adult 22-28

  15. MINORS TRUST RESEARCH CONSIDER THE AGE OF STARTING DISTRIBUTION Although the survey did not test distributing Big Money at different ages, the idea of a distribution starting at 21 was discussed in groups, with arguments on both sides. Younger Tribe members were the strongest advocates for delaying Big Money payout. “I’m 20… that gave me more time to think about what to do with it.” –Adult 18-21 On starting distribution at a later age: “I don’t disagree with the staggered terms. I hate to see these kids getting killed and addicted and things like that. We all want what’s best for them, but at 18, they’re adults.” –Parent “I would be for getting it at 21. It would stay in there invested and you still get per cap when you turn 18. But I think a lot of people would want it [at 18].” –Adult 22-28

  16. MINORSTRUST RESEARCH Detailed Options

  17. OPTION A – LUMP SUM AT 18 • All payout options require: • 18 or older • High school diploma or GED • Complete application and online “EBCI Manage Your Money” course 56% 44% Strongly Somewhat SomewhatStrongly oppose oppose favor favor All tax numbers are based on 2014 IRS tax tables

  18. OPTION B – 4 ANNUAL PAYMENTS • All payout options require: • 18 or older • High school diploma or GED • Complete application and online “EBCI Manage Your Money” course • * Per capita payments remain unchanged and are included in each staggered scenario. 24% 76% Strongly Somewhat SomewhatStrongly oppose oppose favor favor All tax numbers are based on 2014 IRS tax tables

  19. OPTION C – 4 PAYMENTS, ALTERNATING YEARS • All payout options require: • 18 or older • High school diploma or GED • Complete application and online “EBCI Manage Your Money” course • * Per capita payments remain unchanged and are included in each staggered scenario. 36% 64% Strongly Somewhat SomewhatStrongly oppose oppose favor favor All tax numbers are based on 2014 IRS tax tables

  20. OPTION D – INCREASING PAYMENTS • All payout options require: • 18 or older • High school diploma or GED • Complete application and online “EBCI Manage Your Money” course • * Per capita payments remain unchanged and are included in each staggered scenario. 29% 71% Strongly Somewhat SomewhatStrongly oppose oppose favor favor All tax numbers are based on 2014 IRS tax tables

  21. MINORS TRUST RESEARCH ALL FOUR OPTIONS • All payout options require: • 18 or older • High school diploma or GED • Complete application and online “EBCI Manage Your Money” course • * Per capita payments remain unchanged and are included in each staggered scenario.

  22. MINORS TRUST RESEARCH STRONGEST SUPPORT FOR 4 ANNUAL PAYMENT OPTIONS SUPPORT 44% 76% 64% 71%

  23. MINORS TRUST RESEARCH SUMMARY AND RECOMMENDATIONS Option B4 Year Payout Option DIncreasing Payments Over 8 Years Option ALump Sum Option CPayment in Alternate Years Limited support. Main reason for maintaining status quo is financial need and ability to buy land or A home outright Greatest support. Community members acknowledge reduced tax burden and possibility of improved money management abilities. Preferable to lump sum, but least preferred among staggered options. Community generated idea; support comparable to option B. Proposing a change:Neither B nor D should generate much community opposition

  24. MINORSTRUST RESEARCH Questions?

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