Children’s Savings Accounts States & Asset Building November 11, 2003 Dr. Caroline E.W. Glackin Co-Chair, Governor’s Task Force for Financial Independence (DE)

Topics State Asset Building Policy – Delaware Governor’s Task Force for Financial Independence Children’s Savings Accounts – SEED Collaborative

State Asset Policy Delaware Governor’s Task Force for Financial Independence First statewide task force to address the broad topic of asset building Co-chaired by State Treasurer Jack Markell & Caroline Glackin of the First State Community Loan Fund & Center for Community Research & Service at the University of Delaware Deliberate mix of public, private & nonprofit leaders Assisted by the Corporation for Enterprise Development with Citigroup financial support

Delaware Task Force for Financial Independence Categories of Exploration Asset Facilitation Asset Incentives Asset Protection Removal of Barriers to Asset Accumulation

Recommendations Given fiscal constraints, all were either low or no cost to the State of Delaware Support for the exploration of children’s savings accounts through a demonstration program was one recommendation

Children’s Savings Accounts in Delaware Interest generated during Governor’s Task Force work Collaborative a subset of Task Force Application for Savings for Education, Entrepreneurship & Downpayment (SEED) Policy & Practice Initiative by Delaware collaborative through FSCLF Final application by the Boys and Girls Clubs of Delaware

SEED Boys & Girls Clubs of DE Only statewide Boys & Girls Club in the United States Serves 1 out of 7 school-aged youth in Delaware 15 club facilities, 9 school sites, & 5 extension programs Administering club has 1,500 members

SEED Target Population 75 children & their families Youth participants in the BGCD after school programs Middle school children (11-13 years old) African American, Latino & Caucasian Most households are low-income & low-wealth

SEED Unique Aspects Only SEED site with middle school students as target population Trust accounts held at Smith Barney Accounts held until age 18 (limited exceptions) Ages 18 – 21: use restricted to homeownership, small business, automobile, education, job skills Age 21+: age of majority, remaining funds are unrestricted Statewide collaborative developed this from Task Force & recruited the lead agency

SEED Key Partners Boys & Girls Clubs of Delaware (BGCD) Citicorp Trust Bank, fsb & Smith Barney Office of the State Treasurer Delaware Financial Literacy Institute First State Community Loan Fund Nehemiah Gateway Community Development Corporation Center for Economic Education & Entrepreneurship – University of Delaware Center for Entrepreneurship – Delaware State University

SEED Account Structure Investment account (co-owned as trust account) $375 initial deposit - after 10 week child training $1,000 in savings matches ($250/year for 4 years) $625 in benchmark incentives, including parent incentives

SEED Timeline I BGCD orientation – September 2003 Information sessions/recruitment – beginning in September Enrollment – October – January Financial fitness classes for kids – December/January Financial fitness classes for parents & IDA options – January 2004

SEED Timeline II Open accounts – February – June 2004 Add funds for incentives – February 2004 through May 2008 Maintain monthly contact – through June 2005 Maintain quarterly contact – through May 2008 Matched withdrawals – after age 18

SEED Current Status 31 children pre-enrolled with signed parent agreements Funding from CFED & Citigroup Foundation with other funding in final rounds Accounts to be opened in December Children enrolling from low-income areas served by 2 BGCD clubs

Delaware SEED Contact Information Boys & Girls Clubs of Delaware 669 South Union Street Wilmington, DE Phone: Fax: Website: