San Francisco Treasurer Jose Cisneros and Michael Sherraden, director of the Center for Social Development (CSD), spoke at a media and policy briefing at the National Press Club on Sept. 21 to release the findings of the largest, most rigorous study ever of Child Development Accounts (CDAs) established as early as birth and designed to provide more stable and productive lives for American families.
The report, “Lessons from SEED,” is the product of CSD, Corporation for Enterprise Development (CFED), Initiative on Financial Security at the Aspen Institute, New America Foundation, and the University of Kansas School of Social Welfare.
The Saving for Education, Entrepreneurship, and Downpayment Initiative, or SEED, is a 10-year, multi-million dollar national policy, practice and research initiative to develop, test and promote matched savings accounts and financial education for children and youth. It was designed to set the stage for universal, progressive policy for asset building among children, youth and families.
Central to SEED was a community practice demonstration that opened accounts for 1,171 children at 12 nonprofit, community-based organizations across the country. Beginning in 2003, these local organizations piloted the accounts, exploring various program designs and savings incentives for participants of different ages in a range of demographic, geographic and organizational contexts. Additionally, SEED for Oklahoma Kids (SEED OK) began operation in 2008 and opened CDAs for another 1,360 children using the state’s college savings plan platform.
CDAs are long-term asset-building accounts, established for children as early as birth and allowed to grow over their lifetime. The accounts are generally started with an initial deposit from public or philanthropic sources, and built by contributions from family, friends and the children themselves. To provide further incentive for poorer households to save, the accounts of lower-income children may receive additional financial assistance in the form of a larger initial deposit or a higher match. At 18, the savings in the accounts may be used for a range of asset-building purposes – most often to finance higher education, but also potentially to start a small business, buy a home or fund retirement.
Cisneros has been centrally involved in a new San Francisco program to provide college savings accounts for city kindergartners. Sherraden, the report’s lead researcher, is the creator of the widely praised Individual Development Accounts (IDAs), a matched savings program designed to help working poor people save money and accumulate assets. IDAs have been adopted in federal legislation and in more than 40 states. Legislation introduced in Congress would establish $500 savings accounts for each child born in the United States.
Joining the pair in discussing the findings of the report and the importance of CDAs will be [View video of the event]:
- Lisa Mensah, executive director of the Aspen Institute’s Initiative on Financial Security
- Ray Boshara, vice president and senior research fellow at the New America Foundation
- Robert Friedman, chair of the CFED board
- Joshua Flores, a young student who became a SEED saver while attending the People for People Charter School in Philadelphia