In two rapid-fire pages, this report spotlights the power — and untapped potential — of Individual Development Accounts, which give families with fragile finances a unique opportunity to think beyond the struggles of today and invest in tomorrow. This fact sheet is one installment in a 10-part series, called Building Family Economic Success, that highlights how the Foundation is helping to economically empower families across America.
The challenge of thinking long-term when money is short
Findings & Stats
Individual Development Accounts (IDAs) are special accounts that offer low-income individuals a chance to build assets and save for the future. In IDA programs, an account holder deposits money and it’s matched — often at double the value — by private or public funds.
Assets Get Due Attention
Most efforts to combat poverty focus on a family’s current income and their ability to fulfill basic needs, such as securing clothing, housing and food. However, experts are beginning to recognize that another factor — financial assets — is equally important in determining a household’s economic health.
Casey in Action
Three ways that the Foundation is working to help low-income families save and build assets include: 1) promoting policies that support asset development; 2) investing in ways to broaden the range of available asset development strategies; and 3) building an infrastructure that can support an expanded IDA field capable of reaching millions of low-income families.
A Limited Reach
Today’s IDAs serve only a fraction of the millions of families who might benefit from their savings potential. Casey’s advice? Make the accounts simpler and more cost-effective to help expand IDA programs to a grander scale.
Individuals can only use their IDA savings for specific purposes, such as buying a home, launching a business or paying for education.
In America, 40% of white children and 73% of black children grow up in families with zero or negative net financial assets.
Statements & Quotations
The median white household has seven times more assets than the median African-American household.
The IDA field needs increased resources dedicated to policy, research, and technical assistance to expand its reach to more people.
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