Disclaimer: Posts are solely the views of the author and do not represent the views of Brandeis University or the Institute for Economic and Racial Equity.
Earlier this month, IERE’s Children’s Savings Account (CSA) team released a report in partnership with the Asset Funders Network detailing the scale and makeup of funding in the CSA field. The report is a snapshot of CSA funding in 2019, at a moment of tremendous growth in the field and on the eve of the COVID-19 pandemic. While our primary aim was to provide an update to similar reports released in 2014-2015 and 2017, we also sliced the data we gathered in new ways, producing insights about public and private funding in the field, what funders are most excited about, and how the field is responding to COVID and racial equity.
Rooted in the assets field, CSA programs offer a promising strategy to build a college-bound identity and make post-secondary education an achievable goal for more low- and moderate-income children. CSAs provide kids with savings accounts and financial incentives for the purpose of education after high school. Beyond their financial value, CSAs are associated with beneficial effects for children and parents, including improved early child development,i,ii child health,iii maternal mental health,iv educational expectations,v,vi,vii and academic performance.viii,ix,x Many of these benefits are strongest for children from low-income families.xi,xii,xiii,xiv
The CSA team at IERE tracks and analyzes developments in the CSA field. Our work helps funders, program managers, and researchers across the country strategize around program improvement and policy dissemination—and, as IERE researchers, we approach this work with an equity lens. In the few years that I have been on this team, the CSA field has grown dramatically. By our own count, in 2017, fewer than 400,000 children in the United States had CSAs. By the end of 2021, we expect to pass the one million mark.xv
Philanthropy and other private funding sources have played a key role in facilitating the growth of the CSA field, and public investments are increasingly important as well. The CSA field is growing and evolving rapidly, so it is valuable to document the sources of financial support and how these change over time. Our team set out to do this by surveying CSA programs about each of their funding sources and aggregating what we learned into a picture of whom the funders in the field are and what they’re funding within programs.
We learned that funders provided $56.9 million for use in 2019: $38.4 million from public sources and $18.5 million from private funders. As Figure 1 below shows, although public sources collectively provide a greater dollar amount, private philanthropic organizations make up the vast majority of funders for CSAs in 2019 (161 private funders compared to 32 public grantmakers).
Figure 1: Value of funding and number of funders in 2019, by public/private
Another way to understand private and public funding in the CSA field is to look program by program. Figure 2 summarizes the breakdown of CSA programs with public funding, those with private funding, and those with both public and private funding. Of the 75 funded programs that responded to our survey, 41 (55%) relied exclusively on private funding in 2019. 13 programs (17%) received only public support. The remaining 21 (28%) received a mix of public funds. Interestingly, some of the programs in this last category were heavily funded by either public or private sources, while others had a roughly equal split.
These findings highlight the importance of private philanthropic support in the CSA field, as four in five CSA programs (83%) have at least some private funding. It also illustrates the growing potential of public-private partnerships in support of CSAs.
Figure 2: Programs receiving private and public funding
We also looked at how this funding was used in 2019. Some CSA funders provide funds for general use, but most funding streams are tied to specific purposes. In our survey, we asked CSA program managers to answer the following questions:
- “For each grant you received, what were the intended uses?”
- “How much money was associated with each intended use?”
Unsurprisingly, most CSA funding (in terms of both number of allocations and overall dollar value) goes towards incentives for families. Incentives such as seed deposits, matches to family savings, and “benchmark” deposits that reward certain milestones or behaviors are the heart of most CSA programs. $10.8 million in private funding and $35 million in public funding went towards incentives for children. Notably, relatively little funding ($205,000 and $160,000 from private and public funding, respectively) supported evaluation, program development, and program expansion.
The 2019 CSA Funding Survey offered a picture of the CSA field just before the COVID-19 pandemic struck. Data collected in this survey and published separately in our report Looking to the Future: The Children’s Savings Field Responds to COVID and Racial Equity suggest that the pandemic and its ripple effects are likely to shift available public and private funding, as well as the resources needed by CSA programs.xvi CSA programs are already adapting to respond to their communities’ new and evolving needs. Most programs will require new funding and partnerships to fully commit to this work.
As the CSA field and the country face unprecedented challenges, policymakers and philanthropic organizations will seek solutions that help struggling families to both weather this crisis and build hope for the future. Drawing on a strong evidence base, CSAs have attracted support from a broad array of public and private organizations, with increasing investments over time. The CSA field is well-positioned for the future, but further support will be necessary so that CSAs can reach more children and adapt their work to the demands of the moment.
[i] Huang J., Kim Y., Sherraden M. (2017). Material hardship and children’s social-emotional development: Testing mitigating effects of child development accounts in a randomized experiment. Child: Care, Health and Development 43(1): 89-96.
[ii] Huang J., Sherraden M., Kim Y., Clancy M. (2014). Effects of child development accounts on early social-emotional development: An experimental test. JAMA pediatrics 168(3): 265-271.
[iii] Zhang A., Chen Z., Wang K., Elliott W., III, Morrow S. p. (2020). Association between children’s savings account and parent rated children’s health: A preliminary study. Sociology Mind 10(1): 1-14.
[iv] Huang J., Sherraden M., Purnell J. Q. (2014). Impacts of child development accounts on maternal depressive symptoms: Evidence from a randomized statewide policy experiment. Social Science & Medicine 112: 30-38.
[v] Kim Y., Huang J., Sherraden M., Clancy M. (2017). Child development accounts, parental savings, and parental educational expectations: A path model. Children and Youth Services Review 79: 20-28.
[vi] Kim Y., Sherraden M., Huang J., Clancy M. (2015). Child development accounts and parental educational expectations for young children: Early evidence from a statewide social experiment. Social Service Review 89(1): 99-137.
[vii] Elliott W., III, Choi E. H., Destin M., Kim K. H. (2011). The age old question, which comes first? A simultaneous test of children’s savings and children’s college-bound identity. Children and Youth Services Review 33(7): 1101-1111.
[viii] Elliott W., III, Kite B., O’Brien M., Lewis M., Palmer A. (2018). Initial elementary education findings from Promise Indiana’s Children’s savings account program. Children and Youth Services Review 85: 295-306.
[ix] Imboden B. A., Shuang Y. (2017). A Mixed Research Methods Study of Chelsea CSA Program. Boston, MA: Inversant. https://inversant.org/wp-content/uploads/2018/11/Chelsea-report-Final-2017.pdf.
[x] Elliott W., III, Lewis M., O’Brien M., et al. (2017). Kindergarten to College: Contribution Activity and Asset Accumulation in a Universal Children’s Savings Account Program. Ann Arbor, MI: Center on Assets, Education, and Inclusion (AEDI), University of Michigan. https://aedi.ssw.umich.edu/sites/default/files/publications/Contribution-Activity-and-Asset-Accumulation.pdf.
[xi] Huang J., Kim Y., Sherraden M. (2017). Material hardship and children’s social-emotional development: Testing mitigating effects of child development accounts in a randomized experiment. Child: Care, Health and Development 43(1): 89-96.
[xii] Huang J., Sherraden M., Kim Y., Clancy M. (2014). Effects of child development accounts on early social-emotional development: An experimental test. JAMA pediatrics 168(3): 265-271.
[xiii] Huang J., Sherraden M., Purnell J. Q. (2014). Impacts of child development accounts on maternal depressive symptoms: Evidence from a randomized statewide policy experiment. Social Science & Medicine 112: 30-38.
[xiv] Elliott W., III, Kite B., O’Brien M., Lewis M., Palmer A. (2018). Initial elementary education findings from Promise Indiana’s Children’s savings account program. Children and Youth Services Review 85: 295-306.
[xv] IERE analysis of fieldwide data. (2020).
[xvi] Loya R., Smith-Gibbs M., Ejaife O. L. (2020). Looking to the Future: The Children’s Savings Field Responds to COVID and Racial Equity. Waltham, MA: Institute for Economic and Racial Equity, Brandeis University. https://heller.brandeis.edu/iasp/pdfs/racial-wealth-equity/csas/looking-to-the-future-csa-covid-equity.pdf.