On Tuesday, September 21, the Asset Building Program at the New America Foundation hosted the launch of "Lessons From SEED," the largest, most rigorous study ever of Child Development Accounts, at the National Press Clubwith discussion of its findings and policy implications by Jose Cisneros, Treasurer of the City and County of San Francisco; Michael Sherraden, Professor at Washington University; Lisa Mensah, Executive Director of the Aspen Institute’s Initiative on Financial Security; and New America’s Ray Boshara, Vice President and Senior Research Fellow. The panel was moderated by Robert Friedman, Board Chair at CFED.
The Saving for Education, Entrepreneurship, and Downpayment Initiative, or SEED Initiative, is a 10-year research project which tested matched savings accounts and financial education for children and youth. The project opened accounts Child Development Accounts (CDAs) for 1,171 children at 12 nonprofit, community-based organizations across the country, at-birth, in order to provide more stable and productive lives for those children and their families.
Dr. Sherraden gave an overview of the report, which found that Child Development Accounts resonate with American’s values of thrift and investing in the next generation; that even very low-income families were able to save despite economic and institutional barriers; and that the design of the CDA has a great impact on the take-up of the savings product and the rate at which a family saves.
Mr. Cisneros shared the plans of the City of San Francisco to launch a new initiative to provide the first universal, publicly funded, seeded, automatic, and matched savings account program in the country to all students entering kindergarten in the city. The “Kindergarten to College” program will launch this fall and offer an account with $50 for each incoming students with an additional $50 for students eligible for free or reduced lunch and offer a 1 to 1 match on savings deposits up to $100. This program will also offer a platform for teachers to introduce financial education into their curriculum.
Mr. Boshara reflected on the progress made by the asset building field to establish CDAs as a social policy tool within federal, state, and municipal governments. He added that the power of assets to impact an individual’s wellbeing throughout her lifetime and across generations has attracted a diverse set of supporters that cut across party affiliations.
Ms. Mensah spoke to challenges of perception in implementing a universal CDA program, particularly of the accounts to be seen as a handout rather than an investment in life long savings goals. She asserted that CDAs could be for retirement security this century what Social Security embarked on in the last.
Those interested in learning more about Child Development Accounts can learn about the ASPIRE Act, or support this concept by joining the Child Savings Account Coalition.