Spotlight Story

A Bright Future with Baby Bonds
Investing in our kids from birth is a bold step towards achieving racial economic justice. Prosperity Now recently held a virtual event to call on lawmakers to make this a reality by introducing Baby Bonds legislation. Hosted in partnership with The New School’s Institute on Race, Power and Political Economy (IRPPE), the event took a deeper dive into the recently-released paper, A Brighter Future with Baby Bonds: How States and Cities Should Invest in Our Kids. Moderated by Kimberly Adams, host of NPR’s Marketplace, event speakers included Professor Darrick Hamilton of The New School and IRPPE, Connecticut Treasurer Shawn Wooden, DC Councilmember Kenyan McDuffie, and Shira Markoff, Policy Fellow at Prosperity Now. 

Speakers discussed how Connecticut and Washington, DC are leading the way in implementing first-in-the-nation Baby Bonds programs and shared how other states and localities can create Baby Bonds programs as a step toward narrowing the racial wealth divide. The event also discussed how Baby Bonds can complement other proposals like an expanded Child Tax Credit to address financial insecurity and racial economic inequality. Over 300 people attended the event, showing keen interest in policies to address wealth-building for children and the racial wealth divide. View the event recording here.

Policy Updates

Proposed California Legislation Could Lay the Groundwork for Statewide Baby Bonds
On January 19th, California State Senator Nancy Skinner introduced the Hope, Opportunity, Perseverance, and Empowerment (HOPE) for Children Act (SB 854). The HOPE for Children Act will provide children from low-income households who have lost a parent or guardian to COVID-19 and eligible foster youth up to $4,000 in a state-managed trust fund if they are under 10 and $8,000 if they are 10-18. Advocates also say that this bill could provide the foundation for a future statewide Baby Bonds program that would address generational poverty and economic inequality in California.

Washington State Treasurer Promotes Baby Bonds Legislation
Washington State Treasurer Mike Pelliccioti (D), State Senator Yasmin Trudeau (D) and Representative Monica Stonier (D) have been leading efforts to pass Baby Bonds legislation in Washington, called the Washington Future Fund. The bill’s supporters also include a Republican co-sponsor in both the House and Senate. Under the bill, the state would invest $3,200 for each child whose birth is covered by Apple Care, the state’s Medicaid program. Beginning at age 18, recipients could use the funds for a home, postsecondary education or a small business. T The bill passed through the House and Senate policy committees, but it did not pass through the appropriations committees given the short legislative session. Instead, supporters are looking to pass a budget provision to allocate funds for a committee to examine the program impact of the Washington Future Fund as a step toward eventual passage.  

Providence Promise Receives Boost of Funds from the American Rescue Plan
Providence Mayor, Jorge Elorza, recently outlined a plan to spend Providence’s remaining $123.7 million in federal funding from the American Rescue Plan, which provided COVID-19 relief funds to states and localities. His plan included a $2 million allocation to expand Providence Promise, a CSA program that supports families in Providence in saving toward their children’s post-secondary education.

Michigan Supports CSA Expansion
Michigan is investing two million dollars to support the state’s growing CSA field. The state issued a request for proposals for two $500,000 grants to new community CSA programs. The state also awarded a one million grant to the Community Economic Development Association of Michigan (CEDAM) to provide technical assistance to new programs, create statewide CSA infrastructure, and grow donations to the state’s programs.

In the News

Prosperity Now Policy Fellow, Shira Markoff, Discusses Baby Bonds with Yahoo Finance
Prosperity Now Fellow, Shira Markoff, joined Yahoo! Finance Live to discuss the impact of Baby Bonds as a tool to close the racial wealth gap. She discussed the key elements of a state or local Baby Bonds policy proposal and how Baby Bonds could complement other policies, such as an expanded Child Tax Credit. Yahoo Finance also published an article about Baby Bonds, which discussed both state proposals and the federal American Opportunity Accounts Act proposed by Sen. Booker (D-NJ) and Rep. Ayanna Pressley (D-MA-7).

Resources and Publications

New Report on Inclusivity in CSA Programs
The Institute on Economic and Racial Equity at Brandeis University recently released a new report Seeds of Equity: Fostering Inclusivity in Children’s Savings Account Programs, which includes findings from interviews with staff from 14 CSA programs across the country. The report discusses which populations face barriers to participating fully in CSA programs, what barriers to inclusion families may face and ways to address these barriers.

A Brighter Future with Baby Bonds: How States and Cities Should Invest in Our Kids| Prosperity Now and The Institute on Race, Power and Political Economy| January 2022

Policy Design for Child Development Accounts: Parents’ Perceptions| Center for Social Development| January 2022

Children’s Savings Accounts: A Core Part of the Equity Agenda | Asset Funders Network | February 2022