Smith Receives Goldman Sachs Funding to Close Financial Information Gap for Women

Acumen in Personal Finance -- Throughout the Life Span -- is Key Goal of New Program

At the end of the 19th century, Sophia Smith, sole survivor of her family, made a bold investment. She stipulated that her estate be used to found a college at which "women might receive an education equal to that of men."

Today, with the help of one of the world's leading financial services firms, Smith College is taking steps to ensure that its graduates possess the same financial autonomy and courage that were shown by its founder more than 125 years ago.

In partnership with Goldman, Sachs & Co. and Ann Kaplan, a Smith alumna and trustee, who together are providing $2.5 million in seed money, Smith is launching a Women's Financial Education Program, a comprehensive effort to help young women take hold of their own financial futures by understanding the central role of economics in their lives. The program, believed to be the first in the nation aimed specifically at undergraduate women, is intended to strengthen the college's ability to attract and prepare students for leadership positions, particularly in the worlds of business and finance.

This fall, when the program is formally launched, students will be offered an array of noncredit, evening and weekend mini-courses and invited lectures on topics including entrepreneurship, investing and tax planning, loan and credit card debt management; compensation and salary negotiation, philanthropy, investor responsibility, and retirement planning. The courses will be taught by experts from inside and outside the academy, will have no prerequisites and will emphasize quantitative competence and financial literacy as essential life skills.

"Women's participation in all levels of the economy - whether as business leaders, corporate directors, entrepreneurs, legislators, philanthropists or heads of households - is shaping the world in unprecedented ways," explained Smith College President Ruth J. Simmons.
At the same time, Simmons observed, women as a group still have not achieved full economic equality. Among other indicators, women continue to earn less than men, are underrepresented as business leaders, are less likely to have retirement plans, and are more likely to live in poverty at some point in their lives. Bridging that gap, Simmons believes, is among the critical responsibilities educators must face.

"Until women can fully participate as decision makers in those institutions that design, govern and affect the economic aspects of their lives, full equality for women as a whole will remain an elusive ideal," she predicted.
"We cannot claim to be educating women for leadership if we don't also teach them how economic forces directly and indirectly shape their own lives and the fates of their families and communities."

Such matters also concern Federal Reserve chairman Alan Greenspan, who has warned in recent speeches that poor financial education has kept those with less economic literacy from fully benefiting from the recent economic expansion. Greenspan has urged improving basic financial education at the elementary and secondary school levels, in order to help young people avoid poor financial decisions that can take years to overcome. Similarly, Laura D'Andrea Tyson, a 1969 graduate of Smith and the first woman to head the White House Office of Economic Advisors, has frequently argued that economic and quantitative literacy is a priority for the nation, and for women in particular.

For Goldman Sachs, partnering with Smith offers an opportunity to join forces with a leading educator of women, to create a new paradigm for women's financial education.

"Every woman needs to master her personal finances," explained Kaplan, a 1967 graduate of Smith and one of the first women to be named a partner at Goldman Sachs. "In exercising financial independence, influence and control, she secures not only her own future but that of generations to follow."

Financial education necessarily involves quantitative skills and reasoning, an area that the Smith program will emphasize. Students will learn to gather and analyze financial data, such as stock indices and corporate earnings reports; calculate asset prices; understand asset allocation and international portfolio diversification, as well as the mathematics of risk and return; use financial planning simulation models; and gain hands-on experience with Web-based investment and financial planning instruments. In this way, the program will also address the college's goal of bolstering the quantitative skills of students across the curriculum.

Most importantly, says Smith economist Mahnaz Mahdavi, who will direct the new program, Smith students will learn that financial matters "are not something to be left to someone else."

"Throughout her life, whether a woman chooses to handle her own finances directly or to hire someone to manage them for her, she must know the right questions to ask and the right answers -- the right returns -- to seek."

After all, Mahdavi cautioned, "A woman is not truly independent unless she is financially independent."
Smith College is consistently ranked among the nation's best liberal arts colleges. Enrolling 2,800 students from every state and 50 other countries, Smith is the largest undergraduate women's college in the United States.

April 24, 2001