Development Finance and Economic Security

Landmark Children's Savings Accounts Program Launches in Oklahoma with Support from the Ford Foundation

4 June 2008—The state of Oklahoma is joining 12 other U.S. communities in an ambitious national pilot program, supported by the Ford Foundation, to test the impact of long-term savings accounts for children. It is the first time that a state government is taking the lead in launching such accounts—known as Children’s Savings Accounts—joining smaller initiatives in cities such as Chicago, St. Louis, Philadelphia and Austin, Texas.

These accounts provide children with a financial nest egg to grow over the course of their lifetimes, promoting saving and opening the door to education, employment and homeownership later in life. The program also includes a study to measure the results and impact over the course of children's lives.

SEED for Oklahoma Kids will provide 1,000 of the state's newborns with a $1,000 start-up account aimed at eventually funding a college education. Families can add to the accounts, in some cases attracting matching funds from partnering institutions. The initiative was announced by Oklahoma Governor Brad Henry and State Treasurer Scott Meacham.

A National Reach

The Oklahoma project is part of a national program tracking the impact of these accounts on American households. It looks specifically at the effect that saving and accumulating assets has on families and the educational achievement of their children.

The Ford Foundation is the lead funder, and has invested more than $25 million to support similar programs in the 12 additional communities across the country.

As the largest of all the test sites, and the only one to provide accounts to newborns, SEED for Oklahoma Kids is the capstone of that work. Foundation officials hope the knowledge gleaned from these efforts will lead to a national program that provides savings accounts for all newborns.

"The Ford Foundation believes that helping families save for the future is key to promoting economic and social mobility among all Americans, especially low-income households," said Frank DeGiovanni, director of economic development at the Ford Foundation. "Our funds serve as risk capital to develop the best new strategies to help more families enter the economic mainstream."

A Long-Term Investment

The Ford Foundation has long been at the forefront of efforts to generate wealth-building programs for low-income American families. Children's Savings Accounts build on the success of the foundation's support for a similar experiment to test Individual Development Accounts (IDAs), matched savings accounts for adults. IDAs encourage low-income workers to accumulate savings by matching individual contributions with funds from federal and state governments, foundations, businesses and non-profit institutions. The money in these matching funds accounts are to be used for higher education, homeownership or investing in a small business.

The demonstration paved the way for IDA programs across the country. By 2005, more than 20,000 IDA participants had enrolled in 500 programs throughout the nation, with funding from federal and state governments as well as private sources. The experiment has shown that low-income people can save and invest in productive assets when appropriate incentives are offered.

To learn more about the Ford Foundation’s efforts to help families and communities build assets, read Ford Reports.

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The Ford Foundation is an independent, nonprofit grant-making organization. For more than half a century it has been a resource for innovative people and institutions worldwide, guided by its goals of strengthening democratic values, reducing poverty and injustice, promoting international cooperation and advancing human achievement. With headquarters in New York, the foundation has offices in Africa, the Middle East, Asia, Latin America, and Russia.