Children’s Savings Accounts

States & Asset BuildingNovember 11, 2003

Dr. Caroline E.W. GlackinCo-Chair, Governor’s Task Force for Financial

Independence (DE)cglackin@desu.edu

302-857-6943

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

SEEDUnique 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

SEEDTimeline 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

SEEDTimeline 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

SEEDCurrent 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 SEEDContact Information• Boys & Girls Clubs of Delaware• 669 South Union Street• Wilmington, DE 19805• Phone: 302.658.1870• Fax: 302.658.3907• Website: www.bgclubs.org