Last week, the Census Bureau released new data showing that one in seven Americans, including one out of every five children, are now living in poverty. This week, some one thousand advocates, program directors, community organizers, business owners, policy analysts and researchers are gathering in Washington for CFED’s biannual Assets Learning Conference to discuss emerging ideas for helping children and families achieve economic security and stability.

As part of the conference kick-off, several organizations that are leaders in the asset building field came together yesterday to release a new report, Lessons from SEED, a National Demonstration of Child Development Accounts. The SEED project is a comprehensive initiative, combining policy, practice, and research, designed to explore a national system of savings and asset-building accounts for children and youth. Child Development Accounts, or CDAs, are intended to give children in low-income families a “financial head start” towards economic opportunity by beginning savings from as early as birth. CDAs are generally “seeded” with an initial deposit from public or private funds, after which children and parents are encouraged to contribute to the account, often with the incentive of matching contributions. The accounts provide savings that can later be used as productive investments that provide the pathways to opportunity and security, by paying for college, buying a home, starting a business, or for retirement. Read the rest of this entry »

For many of us, the economic events of the past two years have eroded our savings and heightened our sense of economic fragility. Yet for many low- and moderate-income households, savings have long been out of reach. The 2009-10 Assets and Opportunity Scorecard, which OK Policy released in partnership with CFED, revealed that in 2006, more than one in five Oklahoma households was in “asset poverty”, meaning that it had insufficient net worth to subsist at the federal poverty level for three months if income were interrupted, such as due to a job loss. Without savings, any minor setback can turn into a full-fledged crisis. More importantly, perhaps, without access to savings to attend college, buy a home, start a business, or retire, the pathway out of poverty and towards economic security is blocked.

It is for this reason that an important and growing movement of anti-poverty advocates have focused in recent years on ways to support savings among low and moderate-income families. As we discussed in our issue brief, “More than Just Getting By, ” public policies in this country have long encouraged savings, ownership and wealth creation through such mechanisms as the home mortgage deduction and preferential tax treatment of capital gains and college 529 plan contributions. The problem is that most low-income households are not in a position to benefit from the asset building policies embedded in the tax code. As a result, one study found that 45 percent of the benefits from federal asset development policies went to the richest 1 percent of households, while less than 3 percent of the benefits went to the bottom 60 percent of households. Read the rest of this entry »