New Report: Children's Savings Accounts Are Rising Steadily in the US

The children’s savings field continued to grow in 2018, according to a new report from Prosperity NowThe Movement Soars Ahead: The State of the Children’s Savings Field 2018 is the third annual children’s savings report by Prosperity Now. It is based on the organization’s 2018 children’s savings account (CSA) program survey, and discusses trends from previous surveys in 2017 and 2016. Three years’ worth of data on CSA programs—covering everything from account type to incentives to funding sources—reveal that some elements of CSA programs have remained consistent, while others have changed. Let’s dig in.

The Total Number of Children with a CSA Steadily Increased from 2016 to 2018

Prosperity Now estimates that more than 457,000 children had a CSA in 65 active programs at the end of 2018. For the last two years, the total number of CSA participants has grown by about 20 percent annually, mostly due to large programs enrolling new cohorts of children at the start of each program year. Nine new programs launched in 2018, including the pilot Keystone Scholars program in Pennsylvania, which expanded statewide in January 2019. Keystone Scholars is expected to enroll about 140,000 children this year—another leap for the field.

Tracking Results for CSA Programs vs. CSA Participants

The Movement Soars Ahead tracks results and progress across two units of analysis: CSA programs and CSA participants. These two measures can show dramatic differences, especially since 83 percent of CSA participants are in the six largest CSA programs.

For example, 75 percent of CSA programs use opt-in enrollment (parents or caregivers have to sign up for the program), while 25 percent use opt-out enrollment (they automatically enroll participants). However, 80 percent of CSA participants are in programs that use opt-out enrollment, with just 20 percent in opt-in programs. Depending on how one looks at the data, the percentages essentially flip.

Benchmark Incentives Continue to Gain Popularity

The percentage of programs offering benchmark incentives gradually increased over the last three years. Benchmark incentives provide an extra deposit into children’s accounts to reward a range of achievements and behaviors, such as good attendance and completing college readiness milestones. Overall, benchmark incentives rose from 41 percent of total programs in 2016 to 46 percent in 2018.

Even initial deposits, the most common incentive for CSA programs, saw an uptick from last year—rising from 70 percent of programs providing initial deposits to 74 percent. Fifty dollars remained the most common initial deposit amount.

Distribution of Funding Sources Held Steady in 2018

57 percent of CSA programs rely on multiple types of funding—an increase from 50 percent in last year’s report. Simultaneously, funding sources for CSA programs remained consistent between 2017 and 2018. In fact, the percentages of programs receiving support from the top two funding sources—foundations and individual donors—remained unchanged from 2017 at 69 percent and 46 percent, respectively.

Moreover, the percentage of programs receiving any type of government funding (from the federal, state or local levels) also held steady at 33 percent. However, this isn’t necessarily a positive sign for the field, since government funding can help make programs more sustainable and demonstrate a public investment in children’s futures.

Most CSA Programs Are Principally Concerned with Postsecondary Education

In 2018, we added a new question about the primary long-term goal of programs. Perhaps unsurprisingly, 62 percent of CSA programs indicated that their primary goal is around postsecondary education: either increasing the number of young people who complete college or career training, or increasing higher education expectations. A smaller portion of programs report that their primary long-term goal is building financial capability or economic mobility for participating children and families.

There’s a lot more to learn in the full report, which you can access here. We’ll dig further into these findings during a webinar on March 14—join us!