The Indiana Assets & Opportunity Network has previously written about children’s savings accounts (CSAs) as a promising strategy to encourage low- to moderate-income children to pursue education after high school.[1] CSAs are gaining prominence nationwide as an asset building strategy that both motivates savings behavior and is associated with improved educational expectations, socioemotional development, college access, and academic success.

The Asset Funders Network (AFN) will soon release a report on private sector investment in CSA programs. A preview of the report shows growing interest in the field as reflected by generous funding awarded to active, as well as emerging, CSA programs. By the end of 2016, 313,000 children in 29 states were enrolled in CSAs—a 39 percent uptick from 2015’s end. This growth has been facilitated, in large part, by private sector investment.  

Though public sector investment in CSAs is significant, private sector investment surpasses it. 41 percent of CSAs received funding from a public source in 2015-16. Notable examples include the Kindergarten to College program started in 2011.[2] Meanwhile, 71 percent of CSAs received funding from a foundation and more than 40 percent received funding from corporations or businesses. Together, private sector investments in 2015-16 totaled $36.5 million.

Indiana has been competitive nationally in terms of attracting funders. Promise Indiana, a statewide CSA program, amassed $1,659,154 in private funding in 2015-16. This figure combines the revenue streams of all of Promise Indiana’s 14 sites, and ranks them first in the Great Lakes Midwest Region and fifth nationally by private funding amount of any CSA program. They have the highest number of funders (55) compared to the other top 5 CSA programs (6, 1, 4, and 6), suggesting they’ve received smaller median contributions than their peer programs.

Foundations and financial institutions, including banks and credit unions, were the largest private sector funders. Foundations make up more than 50 percent of funders (56 out of 110) while financial institutions make up more than 26 percent of funders (29 out of 110). 20 different community foundations invested in CSAs in 2015-16. Notably, 13 of the 14 Promise Indiana sites received investment from community foundations. These include Benton CF, Blackford County CF, Central Indiana CF, Community Foundation of Whitley County, Howard County CF, Kosciusko County CF, LaGrange County CF, Lawrenceburg County CF, Marshall County CF, Noble County CF, Northern Indiana CF, Portland Foundation, and Steuben CF.

Other identified Promise Indiana funders include the Olive B. Cole Foundation, Lilly Endowment, Parkview Health, the Charles Steward Mott Foundation, and Wells Fargo.

As we approach the holidays consider being a “champion” for a child in your life. Organizations such as BlackRock Financial Institutions Group, LEAF College Savings, and Gift of College allow family members, friends, and community members to buy gift cards only redeemable in a 529 CSA. Even if the gift recipient doesn’t already have a 529 CSA, parents are more likely to be aware of, and start, a 529 CSA for their child in order to obtain value from the gift.

Give the gift of education this holiday season and be sure to check out AFN’s upcoming report!

About the Asset Funders Network (AFN):

The Asset Funders Network (AFN) is a membership organization of national, regional, and community-based foundations, and grantmakers strategic about using philanthropy to promote economic opportunity and financial security for low- and moderate-income Americans.

AFN works to increase the capacity of its members to effectively promote economic security by supporting efforts that help low- to moderate-income individuals and families build and protect assets.

Through knowledge sharing, AFN empowers foundations and grantmakers to leverage their resources to make more effective and strategic funding decisions, allowing each dollar invested to have greater impact.

[1] Education after high school may consist of four-year college, vocational training, etc.

[2] Kindergarten to College is a universal, automatic-enrollment CSA program operated by San Francisco city-county government and San Francisco public schools.