The children’s savings field continued to grow in 2020, according to a new report from Prosperity Now, Sustaining the Movement: The State of the Children’s Savings Field 2020, which shares findings from our 2020 Children’s Savings Account (CSA) program survey. The report’s findings reflect how programs adapted to COVID-19 since 2020 brought unique challenges to the field. The report shows trends over the past few years across major components of CSA programs – including enrollment type, funding sources and long-term goals.

The Total Number of Children with a CSA increased by 30%. 

Prosperity Now estimates that, at the end of 2020, more than 922,000 children had a CSA in 109 active programs. This growth has been driven by large statewide or municipal programs that automatically enroll new cohorts annually. Six new programs also launched in 2020, including CollegeBound St. Paul. According to our survey data, several programs delayed the launch or expansion of their programs to 2021 or beyond because of COVID-19. 

Trends in critical design features hold steady.

As in previous years, the percentage of children enrolled automatically in CSA programs continues to make up the majority of children enrolled. Automatic enrollment (also known as “opt-out”) accounts for 82% of enrolled participants. This type of enrollment is favored by large municipal and statewide programs because it allows for efficient and effective enrollment, especially among disadvantaged populations. Nearly half of CSA programs use 529 college savings accounts to hold program funds, but those programs have 84% of the total CSA participants. Among the programs that use savings accounts rather than 529s, 52% of the accounts are held at banks, 39% at credit unions and nine percent at a combination of both. 

Programs adapted communications and programming to meet families’ needs during the pandemic. 

Sustaining the Movement offers a deeper look at how COVID-19 has impacted CSA programs, showing both the challenges they faced and how they adapted. Significantly, 83% of programs indicated that they had difficulty engaging with participants and families virtually. While many CSA programs focused on serving low- and moderate-income families prior to the pandemic, this year 58% of programs reported that their families are experiencing financial hardships. More than one-third (36%) of programs added or changed incentives to allow participants to complete activities safely at home. Even though program staff had to react quickly to this unprecedented crisis, many programs have indicated that some changes might be here to stay. For example, a few programs offering virtual financial coaching or workshops have seen an uptick in participation because attending virtually reduced barriers to participation (e.g., childcare or transportation). For more details on how programs adapted to COVID-19 related challenges, check out our blog post. 

Reducing racial inequities emerged as an important goal for CSA programs.

While increasing the number of young people who complete postsecondary education remained the top long-term goal of programs (with 42% selecting this as their top goal), the goals also reflect an emerging emphasis on addressing disparities by race. Nearly 40% of programs selected decreasing racial inequities in educational attainment as one of their top three goals, and 21% selected decreasing the racial wealth divide. 

Most CSA programs offer multiple ways to boost account balances. 

In addition to the initial (or seed) deposit provided by 76% of programs, nearly three-quarters (72%) offer some type of program contribution to incentivize family deposits, and 44% offer contributions to reward participants for reaching a milestone (e.g., first birthday bonus) or completing a benchmark activity (e.g., completing a financial education workshop).

This year’s report featured a new addition which looked at how many programs offer targeted contributions to participants from low-income households (also called progressive incentives). Of programs that offer targeted contributions, 63% do so by limiting program eligibility to participants from low-income households, 21% offer an income-restricted savings match, and 17% provide additional deposit(s) for participants from low-income households or who attend a school that predominately serves low-income students. One program offers an additional contribution to participants who are Black, Indigenous, Asian or Latinx. These findings reflect an increased interest in the field in promoting equity and addressing systemic challenges that participants face.

There’s a lot more to learn in the full report. We’ll also dig further into these findings during a webinar on March 31. Join us by registering here.  

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