The D2D Fund: Teaching Financial Literacy through Casual Gaming

The gaming industry is one area of the economy that seems to be weathering the storm pretty well.  And casual gaming?  Well, don’t brush off the importance of a little bit of bubble shooter after work.  Maybe Americans are looking for ways to de-stress and detach themselves from their current financial woes, but whatever the case, the D2D Fund — a not-for-profit organization focused on financial literacy — is looking to take advantage of this shift in focus and integrate some financial education into the mix.

We spoke to Nick Maynard, their Director of Innovation and New Product Development at D2D, to find out how the D2D Fund is changing the financial education landscape and what they’ve got in the works for the future.

How did D2D get its start and what is its mission?

The Doorways to Dreams Fund (D2D) was co-founded in 2000 by Harvard Business School Professor and Associate Dean, Peter Tufano. The mission of D2D is to increase savings and asset-building for poor and working poor Americans. We are a nonprofit, 501c(3) organization working with the financial services industry, national non-profit groups, grassroots community agencies, and public policy organizations to generate promising ideas and pilot test scalable innovations.

Do you think that young adults are more receptive to learning about financial concepts via video games as opposed to in a classroom?

[Our co-founder] Peter Tufano articulates it this way, “D2D’s vision is “financial entertainment.” Taking cues from business and entertainment, we need to work with and for consumers in the development of engaging new media that teach them how to better manage their money.

We’ve heard from our partners that attendance for financial education is difficult to muster, but when asked to play-test a video game, the interest level requires a waiting list. This is not surprising. We believe that digital media offers the potential to marry fun and education since 72% of Americans are playing video game and the rates of play are highest among those under the age of 35. In particular, casual video games are the fastest growing segment in the game industry; and the casual segment is dominated by female players

Your Celebrity Calamity game was focused directly at young women to help them better understand basic personal finance, but it seems like it would be well suited for older children and teenagers too. Are you reaching out to that demographic as well?

While not our core audience, we do hope to attract partners interested in helping us test with these age groups. Casual video games, while popular among females, are designed for broad audience appeal. We’ve completed very limited testing with high school students, and the results were quite positive. We think that older children and teenagers would benefit from playing the game.

Is Celebrity Calamity set up to focus more on the entertainment aspect of gaming or is it more “in your face” financial instruction?

While focused on fun, Celebrity Calamity has explicit learning objectives that include:

* Paying more than the minimum credit card payment
* Minimizing credit card finance charges
* Avoiding all fees including bank overdraft, credit card late payment, and credit card over-limit
* Making good annual percentage rate (APR) choices.

The game also includes a number of implicit learning objectives, such as raising awareness of spending behavior and the value of saving money.

Our vision for games is a library of casual games, like Celebrity Calamity, each teaching discrete financial lessons. With that in mind, D2D is currently working on our second game which just passed the Alpha milestone of development. The subject matter is personal budgeting, and the women with whom we are making the game are very enthusiastic about the new prototype.

How do you distribute these games?

Having successfully achieved a major milestone in making the first ever financial literacy casual video game, the next phase of our work will focus on distribution and social marketing testing.  We plan to test distribution in channels that have the potential to reach millions of low-to-moderate income Americans.  These include employers, community colleges, grass-roots organizations and financial services firms.

In return for working with us on measurement and data gathering, we don’t plan to charge our partners for Celebrity Calamity.

How do you anticipate financial service firms distributing these games to lower income families?  Don’t lower income families have a history of shunning more traditional financial service firms — many times using check cashing facilities instead of using a bank account?

It is important to remember that low-to-moderate income (“LMI”) households are a diverse population.  While a significant percentage are “unbanked,” many LMI families are quite comfortable with mainstream financial services.  In some cases, households in this segment may be using both mainstream and alternative financial services.  In the financial services space, D2D works on projects with banks, credit unions, tax preparers, and alternative financial services providers in order to reach as many LMI families as possible.  We approach game distribution in this channel with a similar mindset.

I know there’s talk about implementing personal finance studies into New Jersey high schools. Do you have any plans to work with schools and somehow integrate this or other financial-based games into the curriculum?

As we discussed above, while not our core audience, we would be interested in working with schools to explore how games, like Celebrity Calamity, might be integrated into planned curriculum.

I read about the “Prize Linked Savings” that D2D is working on. What exactly is this and how does it work?

We are working with our partners on [a raffle savings account] Save to Win.  After three months, 4,763 Save to Win accounts had been opened resulting in $1.1 million in deposits.  As you know, savings is essential to the American dream, both for individuals hoping to attain it and for the country as a whole to recover and rebuild a strong economy. For most of the last decade, Americans have borrowed more than they have saved. Prized-linked savings products offer savers a return both in the form of a chance to earn large prizes and in interest or dividend income. Prized-linked savings products are offered in over twenty countries around the world – including the United Kingdom, Sweden, South Africa and in many Latin American and Middle Eastern countries.

The Save to Win savings raffle offers a $100,000 guaranteed grand prize that will be awarded to one lucky winner. In addition, $39,000 in monthly prizes will be awarded. In the Save to Win savings raffle, every $25 saved each month earns an entry, up to 10 entries per month.

The Save to Win Project explores the potential of a prize linked savings product to spur savings, as well as the feasibility of offering it at scale. The project has been organized by the D2D Fund in partnership with the Filene Research Institute and Michigan Credit Union League. The Center for Financial Services Innovation has provided financial support for the project. Eight Michigan credit unions have joined together to offer a PLS product during 2009.

Besides games, what other products has D2D developed and how are they dispersed to lower-income individuals?

We offer US Savings Bonds at tax-time through Volunteer Income Tax Assistance (VITA) sites.  For more than three years, we’ve been running the Savings Bond Tax Time Pilot project [and] over 80 VITA sites throughout the country this year were given special permission to offer tax filers the option to buy a U.S. savings bond with part of their refunds. To date, we have sold over 3,000 U.S. Savings Bonds for more than $600,000 to low- and middle-income taxpayers who use VITA sites.

Beyond products, [we're] also working on savings marketing innovation. Using the Zaltman Metaphor Elicitation Technique (ZMET), we’ve applied research on how low-to-moderate income consumers think and feel about money and savings to the development of new savings marketing imagery and messaging. Our credit union partners have launched field tests, and CEFCU (Peoria, IL) saw a 104% increase in share (savings) accounts, year over year, and 85 new members during the test period.

What does the next few years hold for D2D as far as expanding and new product development?

We remain committed to the vision that innovations can positively improve the financial lives of households. Whether in the form of new savings policy at the US Treasury, new financial statements for customers, video games that demonstrate a new approach to ‘financial entertainment,’ or marrying lotteries and savings, we are excited that our model of innovation and partnership can bring about positive change. In this age when “financial innovation” is treated by some as a curse word, we believe that responsible innovations can help corporations, governments and non-profits better serve the financial needs of America’s households.”

Photo credit: mattc3004