Big Bucks to $top Teen $moking

So Metro was perusing, in his way, the local rags for Canada, and he saw there this article entitled "Teens Offered Big Bucks Not to Smoke".

Basically, the deal is that kids are being offered $5,000 to stay smoke free until their high-school graduation. Kids in grades 5 to 8 make a pledge to stay in school and smoke-free until graduation. In return, they'll get a cheque.

From the first, this smelt funny. Knowing something of the success of, for example, virginity pledges, I wanted to investigate further.

I mean, it sounds good, and failing to smoke has significant benefits beyond the obvious: You'll reduce your chances of contracting cancer, you'll smell better, and you'll significantly reduce your odds of dying in a hotel fire.

But I just feel that something too good to be true ("free money"), is. And the article was a bit sparse on detail.

The organization behind this, called REWARDS (Rewarding Everyone Who Acts Responsibly and Doesn't Smoke) sounds fishy already. Uber-clever acronyms are often a sign that the acronym's meaningless. It bills itself as a "life-skills" training group.

Most of the real info is not actually available on the front page. Red flag number two. And much of the website content seemed evasive to me--perhaps because they had, as yet, not answered my major question:

According to the Globe and Mail article, students have to "recruit sponsors" to contribute "a small amount of cash". How small, exactly?

Reading into the site I discovered a few things:

The life skills outfit gets kids to pledge to stay in school and stay smoke-free

Compliance is monitored by blood tests, supposedly sensitive enough to detect tobacco use while discounting second-hand smoke inhalation

Kids can fall off the wagon and pay a $500 penalty, or earn back the penalty money by completing community service or writing an essay about the experience

Here's where it starts to get stinky: Kids must recruit four sponsors. Those sponsors must contribute $15 each per month for a student starting the program in grade 5. For a student in grade 8 it's $30.

So I did some math:
$15 x 4 sponsors x 84 months to graduation equals ...

Anyone?

$5,040. That's what it equals.

For the later entrants, that becomes:
$30 x 4 sponsors x 48 months equals?

Well now, let's not always see the same hands.

$5,760.

So in return for four of your friends contributing over $5,000, the REWARDS organization will pay you $5,000. Oh, and they'll apparently send you motivational newsletters and suchlike throughout the program.



The goal of the program's founder is 100,000 sucker--I mean, participants. Assuming that the average contributor is paying $22.50 per month for 5-and-a-half years (very crude maths here, the average money is likely higher, I think, while time would likely be shorter).

That's 400,000 sponsors x $22.50 per month x 66 months. I had to redo the maths three times before I could believe it:

$594,000,000

Yep. Over 8 million bucks a month in contributions. For a payout of how much? $500,000,000. (5k per student x 100,000).

Leaving the philanthropists of REWARDS with ... ? Put down your wing, young Mr. eAgLe, and drop those tentacles, Ms. Coaster ... Let someone else have a go.

$94,000,000

Pretty sweet for a five-and-a-hall year investment of bugger-all, I'd say.

Of course, this model assumes that:
a) Every enrolee completes the program successfully (see "Virginity pledges" again) and that everyone gets the full $5k.
b) That there's no such thing as compound interest.

I'm not going to get into the complex computations of interest on an increasing lump of cash. I mean, isn't ninety-four million enough? I'm not against anyone making a profit, particularly not in a good cause. But "investing" in your kids' futures in this way is far less productive than starting, for example, an RESP toward their college costs. And as a bonus, the more educateed people become, the less likely they are to smoke!

Oh sure, there are probably operating costs coming out of that $94 mil. Secure databases don't maintain themselves for free. And someone has to produce this "motivational material".

But as a writer of similar products permit me to tell you that I could produce reams of motivational material in print, internet, audio and video form for considerably, in fact pathetically, less than $8 mil per month.

I wonder if they're hiring? And do they have an employee share plan?