Giving is great, but lemonade stand should teach entrepreneurship
Making more lemonade
July 9, 2010BY TERRY SAVAGE Sun-Times ColumnistMy recent column about teaching children how to run a lemonade stand seems to have caused quite a furor. In case you missed it, I explained to the young girls -- who were giving away their product -- that the whole idea of having a business is to figure out your costs and then set a price that gives you a profit. In fact, that's the basis of our American entrepreneurial, free-enterprise system.
I regularly write a personal finance column, explaining investing, financial planning and the economy. However, that "lemonade stand" column triggered a barrage of complaints accusing me of destroying the children's charitable spirit of giving. The e-mails I received from around the world were anything but charitable, accusing me of being Scrooge, ignorant, selfish, arrogant -- and a lot of other words I couldn't put into print.
Three girls giving away free lemonade isn't cute, it's indicative of the lack of economic responsibility we're passing on to future generations.
(AP File)
RELATED STORIESThere is no 'free' lemonadeClearly there is a great misconception that entrepreneurship and generosity are incompatible. But that's far from the truth. Just look at Bill Gates and Warren Buffett -- two of our country's greatest entrepreneurs, who are in the process of giving away hundreds of millions of dollars to causes they think are worthwhile. But first they had to earn that money!
My column was intended as a lesson on entrepreneurship -- not as a criticism of charitable giving, which I value highly on a personal basis. And the lemonade stand was not only a lesson for children, but a metaphor for our financial troubles today. We need entrepreneurs to create jobs and keep America growing out of this recession.
Only a growing society can afford the resources to take care of those who cannot help themselves. Whether you regularly tithe a portion of your income, or just drop a coin in the Salvation Army bucket , whether you leave your entire fortune to charity or give financial aid to your elderly parents -- you need to make the money first.
Our economy is in the midst of a great financial crisis. Many of us are lamenting that consumers did not have the financial literacy to understand those crazy mortgages they were offered, or to resist the lure of credit cards that led Americans so far into debt.
It's important to start teaching those financial lessons at an early age. These little girls, around age 7 or 8, are already targets of consumer marketing -- for everything from toys to videos, from fashion to food. Certainly, it's also the right time to teach them the value of the money they spend, and how difficult it is to earn it.
Whether these kids were charging money for the lemonade in order to make a profit or to give it to a charity, the lessons of working to earn the money would be memorable.
The children weren't rescuing people from the heat, since it was a temperate day. They were just looking for something to do -- and there was no one around to teach them how a lemonade stand should really work.
For many years, I've been on the board of Junior Achievement in Chicago and have been an adviser to the Women's Business Development Center. Both are organizations dedicated to teaching about the opportunities of our free enterprise system. This is especially important for girls who might otherwise grow into young women still earning only about 73 cents on the dollar compared with men -- an average pay discrepancy for jobs in large companies. Surely, we want to help them do better.
Empowering children to learn about the value of money and the importance of being hardworking and entrepreneurial are values we should all share -- along with a respect for the genuine needs of others and the values of giving. The laws of economics in an incentive society are not on a collision course with charity. They need to work hand in hand. And that's The Savage Truth.
Terry Savage is a registered investment adviser and a co-host of "Monsters and Money in the Morning" on WBBM-Channel 2 from 5 to 7 a.m. weekdays. Post questions on Terry's blog: terrysavage.com and blogs.suntimes.com/savage.
Great article about Entrepreneurship in relation with the lemonade stand.
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