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Cumulative Savings Ecosystem (Prototyping Mural Update 1/4)

Increasing savings and changing mindsets through automatic accounts, employer donation matching and giving from family and friends.

Photo of Gavin Cosgrave

Written by

Who is the target audience for your idea and how does it reimagine the cost of college?

What if all children had a 529 college savings account opened for them, and the government seeded the accounts for low-income families? Parent employer companies could double parent savings through donation mating programs. Family and friends could give to the account for birthdays and holidays. These cumulative savings could change the mindset of low-income families as their children enter the teenage years and make college more realistic.

Join the prototyping process and check out this mural: http://mur.al/Yxdd1Zgg

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What aspects of this process could be quickly prototyped?

How can we involve more stakeholders in the college savings process?

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Visit The Gift of Education website

What early, lightweight experiment can you try out in your own community to find out if the idea will meet your expectations?

- Ask local businesses and employees about donation matching programs. - Speak with The Gift of Education business, a local online gift registry. - Research California 529 plans and how they could be more effective and widespread

What skills, input or guidance from the OpenIDEO community would be most helpful in building out or refining your idea?

How could we practically test this idea?

This idea emerged from

  • An Individual

Evaluation results

8 evaluations so far

1. Does this idea make college more accessible, especially for low income students in the U.S.?

Yes! - 25%

To a degree - 75%

Not that I can tell - 0%

2. Does this idea think beyond current cost structures of college and activate new sectors or partners?

Yes! - 37.5%

It's attempting to - 37.5%

Not that I can tell - 25%

3. How excited are you about this idea?

I'm so excited I just can't hide it! - 50%

I'm pretty neutral in my excitement level - 25%

I don't feel very excited about this idea. - 25%

24 comments

Join the conversation:

Comment
Photo of Bettina Fliegel
Team

Gavin,
Loving this ecosystem!
I am doing some research and discovered the following:
1) One can choose a 529 plan from any state. You do not need to use the plan offered by the state that you live in. You can research which state has a program that has higher investment yields.
2) Some States and Cities are contributing money into a 529 account, or college savings bank account- CSA, when a child enters public school kindergarten class.
Examples - Nevada and San Francisco

Nevada http://collegekickstart.nv.gov/families/Overview/

San Francisco http://sfofe.org/programs/k-to-c
The San Francisco Program is multidimensional.
Every child entering kindergarten in the City’s public schools is automatically given a College Savings Account containing a $50 deposit from the City and County of San Francisco. "The program’s goal is simple, yet ambitious: to make sure every child in San Francisco can save for post-secondary education. This isn’t merely a “nice thing to do;” The program invests in the city's future, as college-educated people are a critical part of a city’s success. They are more likely to get jobs, open businesses and contribute to the tax base of the city. The accounts become financial education tools, fostering a more money smart population."

Benefit 1 - "Once a child has an account, the program offers incentives for children, parents, friends, and extended family to save earlier and to save more. Foundations, community organizations, local businesses and individuals are providing generous additional deposits and matching incentives."
2nd Benefit - Awesome! The accounts become a financial education tool.
Schools are integrating financial subject matter into the K - 12 curriculum. The bank account becomes a teaching tool. SF is the first city in the US to integrate learning in this way.
3rd benefit - This is huge...... Banking unbanked families. Lower income and immigrant families may have no relation to a financial institution. This creates opportunity as they have their child's account now and it makes it easier for them to open other accounts as well.

3) Employer Donation Matching - I found one firm that has started a program!
EdAhead - a program started at Dun and Bradstreet (a business firm - area of credit reporting.)
As per their CEO, in a NYTimes article from 2012 - "Jeffrey Stibel, the company’s chief executive, said he hoped other companies would adopt similar programs. “One of the biggest problems we have is finding talent, and it starts with education,” he said. “Education is more important than retirement.”

The company matches employee contributions to their child's 529, up to a certain amount per year.
One problem that they note is that the money the company contributes is taxable -so if they donate $500 total that increases the employees taxable income. For low income folk that might not be manageable. This company is also giving the employee extra funds to offset that additional tax burden.
(Other companies that might offer this Employer Matching might not be doing this. )
Here are some links that speak of this program.
http://bucks.blogs.nytimes.com/2012/12/04/a-company-match-for-college-savings/
http://www.usnews.com/education/best-colleges/paying-for-college/articles/2014/01/22/boost-529-plans-through-employer-contribution-programs
http://www.edahead.org/

Interesting and EXCITING - The Dun and Bradstreet program is a multiple match program.
Employee contributions are matched by company dollars and this activates a donation to local public schools by the company as well.
What if a corporation chose to do employee matching to college funds for individual employees, and this activated matching to local colleges in the community to offset tuition for low income students?

I wonder if this ecosystem might be broken down by where the funds are coming from and when in a child's life? Maybe outlining in this way can spark ideas on how to build up each area, or add to them?
Family, friends
Government - City or State (One article I read suggested that the Fed Govt match what the city/state contributes to CSA accounts when a child enters kindergarten.)
Employers
Perhaps matching from foundations, philanthropy
Community Organizations
Other?

Excited to see this develop Gavin!

Photo of Gavin Cosgrave
Team

Wow Bettina, thanks so much for providing this comprehensive resource!!
Ed Ahead looks like exactly the type of program that is needed to help move this forward.
Like most problems, the solutions already exist, just not at the scale needed.

Thanks again for your awesome research!

Photo of Bettina Fliegel
Team

Hi Gavin.  Congrats on making it to Refinement!  As I wrote earlier I love the idea.  
I like the questions that OI presented about who might develop the platform and what it might look like.  I wonder if Dun and Bradstreet might be interested in this idea and see it as something that can benefit their employees as they are already invested in the importance of higher ed.  Might they be a place to get feedback about the idea of an employer developing an ecosystem platform for their employees?  

Another Idea from a previous challenge that I think is great, and might fit into an ecosystem in some way is this one:https://challenges.openideo.com/challenge/renewable-energy/feedback/pay-millennials-if-their-parents-go-green    (It is a bit out there for your current ecosystem but maybe in the long term....)   This idea is to involve youth, pre-college, to nudge their families to invest in renewable energy and in return they would get funds that can be put towards higher ed.  I think a program that incentivizes parents, grandparents, anyone really, to invest in clean energy for their home, by offering funds to be applied to higher ed, to the youth of their choice, can be a win win for society overall.  Might local governments adopt something like this?  Any role for corporations, Foundations, or local businesses in a model like this?  The San Francisco program is so interesting as it tackles the issue in so many ways.  Can something like this be an addition?

Photo of Bettina Fliegel
Team

Hi Gavin.
I was reading that one of the rewards options on Amex Cards is to use one's points to contribute to a charity.  I was thinking that that might be a way to save for college, as it is money that is "extra" and might not be missed, or planned into one's budget?  Might one use it to add to their personal college savings ecosystem?
https://www.americanexpress.com/us/content/members-give.html

Bettina

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