Making the Most of Your Children's Savings Account Program

July 26, 2016

By Liz Glaser, Graduate Research Assistant 

The Corporation for Enterprise Development recently began running a series of webinars devoted to CSAs, or Children's Savings Accounts. The series, which is archived online, covers a range of information related to launching CSAs. Each webinar focused on different programs and elements, but there were overarching themes that should be considered when developing, implementing or perfecting CSA programs. We’ll share some of those themes in this blog post, highlighting the importance of collaboration and communication throughout the process.

Children's savings accounts promote asset-building and savings for postsecondary educational opportunities, and over the past several years have been directed toward low- to moderate-income families as a way to start thinking about college savings. Many of these account programs are managed by nonprofits or government agencies, and the accounts themselves are managed by banks and financial institutions. States like Massachusetts, Maine and Rhode Island have statewide CSA initiatives, and some cities like San Francisco manage them on a local level. Each of these account programs requires strong partnerships, clear communication and family engagement.

In each webinar, CFED introduced local and state-run initiatives that have been successful. From Missouri to California, each CSA program focused on similar elements. The first element was finding the right financial partner to hold the accounts. The second was strong messaging – early and often – to the beneficiaries. The third was perfecting parent engagement.

One of the most important aspects of a successful CSA program is a strong relationship with a financial partner. As noted in the third webinar, determining what an account will look like is a three-pronged approach. First, your program must select the type of financial institution that is right for your community: a 529, credit union, bank, etc. Finding the institution that is enthusiastic about managing these types of accounts will make it easier to collaborate and manage the relationship. Then, the back-end structure needs to be configured, and following that, the institution and CSA program have to determine what the experience will be like for the participants. Finding the right home for your CSA program allows you to build engaged partners who are willing to work creatively together to ensure that the program runs smoothly.

Messaging, and using communication effectively, is a constant theme in successful CSA programs. Many parents who receive CSA grants and benefits may not know that after receiving a grant, they must actually open an account, which is why regular, accessible communication is so integral to CSA success.

With College Bound Baby, a CSA program in Maine, marketing materials like posters were placed directly in hospitals, clinics and medical facilities, and officials also used literature and various forms of collateral materials to get the message across. Eventually, because of the development of strong partnerships as well as the re-launching of some of the initiative, communication about the CSA was even made available on the birth papers that parents sign at the hospital.

CFED notes that “tailoring program messaging to resonate with parents will help ensure that their needs and expectations are addressed, and will spark excitement about the program” (Markoff & Derbigny). Because these accounts exist for the benefit of parents and their children, communicating the importance of saving – along with highlighting the process – is a key element across all types of CSA programs.

As noted above, parent involvement is a direct goal of strong messaging. Family engagement is one of the core tenets of CSA accounts because families are the direct recipients of the services.

CFED explains: “Keeping participants connected throughout the program helps to ensure that they understand the account and incentives offered and the value of making their own savings contributions.” Additionally, engaging families can create more opportunities to educate families on financial matters and provide incentives to use these programs.

A recent Congressional legislative proposal from Rep. Ben Ray Lujan (D-N.M.) would direct these incentives to parents. In Luján’s Save for Success Act, providing a tax incentive annually would help parents feel connected to the process of saving and allow them to reap both short- and long-term benefits. Some programs engage with parents by sending out updates and reminders that correspond with events like Mother’s Day or Christmas, while others use high-touch methods of classroom lessons, family workshops and referrals to other programs. These methods depend on the pre-existing family relationships with savings accounts, but all programs must make engagement a clear priority as they work toward program success.

By choosing the right financial partner, messaging effectively, and making a clear effort to engage parents, CSA programs can successfully help low-income students reach their college dreams. The CFED webinar series reminded many of these programs that the spirit of sharing and collaboration go beyond a program and their financial partner – the collaborative nature must be shared among all different CSA programs. As these webinars progressed, it was clear that program administrators want to learn from each other and share continued success to help expand the reach and efficacy of CSA programs nationwide.

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