1. Strategies to Build Individual Assets: IDAs, EITC, and CSAs Building Financial Assets Conference Sponsored by the Jessie Ball duPont Fund Airlie Conference Center □ October 25-27, 2006 Carl Rist, Director, SEED Initiative CFED

2. www.cfed.org Establishing the need for asset building: The 2005 Assets and Opportunity Scorecard Most comprehensive tool yet to measure ownership and financial security at the state level. Provides comparable, state- by-state data on asset accumulation and protection.

3. www.cfed.org A look at Florida Overall grade on asset performance: C Overall policy rating: Standard IndexGradeRating Financial securityCSubstandard Business DevelopmentBSubstandard HomeownershipBFavorable Health careFStandard EducationCFavorable Tax policy and accountability Substandard

4. www.cfed.org Noteworthy data on asset building for Florida 29 th in net worth of households 28 th in asset poverty 35 th in homeownership rate No state-funded IDA program No state EITC TANF asset limit = $2,000 (average)

5. www.cfed.org A look at Delaware Overall grade on asset performance: A Overall policy rating: Favorable IndexGradeRating Financial securityASubstandard Business DevelopmentCFavorable HomeownershipASubstandard Health careAFavorable EducationCFavorable Tax policy and accountability Favorable

6. www.cfed.org Noteworthy data on asset building for Delaware 12 th in net worth of households 4 th in asset poverty 2 nd in homeownership rate No state-funded IDA program No state EITC TANF asset limit = $1,000 (below avg.)

7. www.cfed.org A look at Virginia Overall grade on asset performance: C Overall policy rating: Substandard IndexGradeRating Financial securityCSubstandard Business DevelopmentFFavorable HomeownershipASubstandard Health careCSubstandard EducationBFavorable Tax policy and accountability Substandard

8. www.cfed.org Noteworthy data on asset building for Virginia 21 st in net worth of households 26 th in asset poverty 6 th in homeownership rate State-funded IDA program No state EITC TANF asset limit = no limit (one of only two states)

9. www.cfed.org A Proven Asset-Building Tool: Individual Development Accounts Individual Development Accounts (IDAs) are:  Centerpiece of a new asset-building strategy  Restricted savings account, used for: Homeownership Business start-up Post-secondary education and training  Designed to increase savings of poor, working poor and welfare recipients.  Incentive? Match from public or private sources, PLUS economic literacy training.

10. www.cfed.org How IDAs Work

11. www.cfed.org IDAs: Precedents and models Over 300 programs and 15,000 savers across the U.S. Delaware:  Delawareans Save Florida (Jacksonville area):  NE FL CAA, Real Sense Prosperity Campaign/IDA Partnership Virginia (Richmond area):  New Visions, New Ventures, Inc.

12. www.cfed.org IDAs: Impact ADD evaluation (large-scale IDA demonstration with over 2,000 participants). On average, ADD participants:  Had family income at 116% of the family-size- adjusted poverty line,  Saved $19.07 per month in average net deposits (1.6% of monthly income),  Made a deposit in about 6 of every 12 months,  With an average match rate of 2:1, accumulated $700 per year in IDAs.

13. www.cfed.org A New Idea: Children’s Savings Accounts What difference would it make if every child started with an account at birth? What are CSAs? A vision:  $1,000 at birth for every child,  Accounts used for asset building,  Universal system (“opt-out” model)  Progressive matches  Appropriate financial education delivered at scale

14. www.cfed.org CSAs: Precedents and Models International precedents:  U.K. Child Trust Fund  Canada Learning Bond  Singapore (Child Development Accounts) SEED Demonstration in U.S.  Multi-year, multi-site experiment with SEED (children’s savings) accounts  1,250 accounts with children in 12 sites, including 500 in Michigan.

15. www.cfed.org CSAs: Precedents and Models (more) Y.E.S. (Youth Experiencing Savings) at Boys and Girls Clubs of DE  71 middle-school aged children  Models delivery of SEED accounts via Boys and Girls Clubs.  Accounts held at Artisans Bank and Smith, Barney.

16. www.cfed.org CSAs: Impact SEED Progress SEED Initiative, as of December 2005:  1,089 accounts open  Avg. accumulation varies across sites and age cohorts

17. www.cfed.org Resources: IDAs:  www.cfed.org - clearinghouse  www.assetsalliance.org - training  http://gwbweb.wustl.edu (Center for Social Development) – research http://gwbweb.wustl.edu CSAs:  www.cfed.org (SEED Initiative) – clearinghouse www.cfed.org  www.assetbuilding.org (New America Foundation) – federal policy www.assetbuilding.org  http://gwbweb.wustl.edu - research http://gwbweb.wustl.edu

18. www.cfed.org Contact: Carl Rist CFED 123 W. Main St., Suite 210 Durham, NC 27701 919.688.6444 919.688.6580 (fax) carl@cfed.org www.cfed.org www.cfed.org/go/scorecard