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State Policy Trends for Individual Development Accounts (IDAs) 1993-2002 States and IDA Policy: Knowledge Building, Networking PowerPoint PPT Presentation


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``. State Policy Trends for Individual Development Accounts (IDAs) 1993-2002 States and IDA Policy: Knowledge Building, Networking and Creating New Opportunities Conference November 2002 Karen Edwards Center for Social Development Washington University, St. Louis, MO

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State Policy Trends for Individual Development Accounts (IDAs) 1993-2002 States and IDA Policy: Knowledge Building, Networking

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State policy trends for individual development accounts idas 1993 2002 states and ida policy knowledge building netw

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State Policy Trends for

Individual Development Accounts (IDAs)

1993-2002

States and IDA Policy: Knowledge Building, Networking

and Creating New Opportunities Conference

November 2002

Karen Edwards

Center for Social Development

Washington University, St. Louis, MO

http://gwbweb.wustl.edu/csd/statepolicy


State policy trends for individual development accounts idas 1993 2002 states and ida policy knowledge building netw

  • Six Key Policy Development Questions for

  • Individual Development Accounts

  • What is the purpose of developing IDA policy?

  • Who will the new policy serve and why is it necessary?

  • Are asset-building policies already in place that could accommodate IDAs?

  • If IDA policy is instituted, how will it be implemented?

  • What is the projected cost of implementing IDA policy and do potential

  • funding sources exist?

  • Do projected benefits of implementing IDA policy justify projected costs?


State policy trends for individual development accounts idas 1993 2002 states and ida policy knowledge building netw

State IDA Policy Picture in 1993

  • 1 state had legislated IDAs (Iowa)

  • No other states had included IDAs in welfare reform plans

  • Only 2 states (besides Iowa) had proposed IDA legislation

  • Only 3 known (unrelated) community-based IDA programs

existed: located in Indiana, Montana, and Mississippi

  • No federal IDA legislation had passed (1 bill was written, but not

yet proposed – this bill eventually developed into AFIA)


State policy trends for individual development accounts idas 1993 2002 states and ida policy knowledge building netw

State IDA Policy Picture in 2002 (only 9 years later)

  • 34 states have legislated IDAs (plus D.C. and Puerto Rico)

Majority of legislation passed between 1997 and 2000

  • 8 states have created IDA programs by administrative rule

  • IDAs included in federal welfare reform law of 1996:

  • 30+ states included IDAs in welfare (TANF) plans

  • 4 states are positioned to propose or pass IDA legislation

  • 500 + community-based IDA programs in 49 states

  • Federal IDA legislation passed with funding (AFIA – 1998)

  • SWFA proposed – federal tax credit legislation for IDAs (2002)


State policy trends for individual development accounts idas 1993 2002 states and ida policy knowledge building netw

Typical State IDA Program Funding Streams

  • State general funds (12)

  • State tax credits (10)

  • Temporary Assistance for Needy Families (TANF) (17)

  • Community Development Block Grant (CDBG) (6+)

  • CSBG, FHLB and other public funds (10+)

  • Assets for Independence Act Funds (AFIA) (18+)

  • Office of Refugee Resettlement Grant Funds (ORR) (9+)

  • Private funds (Foundations, Corporations, FIs, Individuals)


State policy trends for individual development accounts idas 1993 2002 states and ida policy knowledge building netw

Typical State IDA Policy and Related Program Issues

  • Policy intent and program design (limitations and restrictions)

  • Capturing and retaining funding sources

  • Creating an IDA program from policy (who does it and how?)

  • Leveraging state tax credits (turning straw into gold)

  • Program administration (who does it and how?)

  • Program delivery (fiduciaries, marketing, and costs)

  • Limited technical assistance and related reporting requirements

  • Support for networking, coalition-building and collaborations


State policy trends for individual development accounts idas 1993 2002 states and ida policy knowledge building netw

Four Significant State IDA Policy Trends

  • Legislation Strategy and Design

  • Funding Appropriations

  • Program Administration

  • Program Evaluation


State policy trends for individual development accounts idas 1993 2002 states and ida policy knowledge building netw

  • Common Elements of IDA Programs Established Through State Policy:

  • Designated as a “Demonstration” or “Pilot” program (at least to start).

  • A community-based program delivery structure – often includes specific

  • qualifications or requirements for delivery organizations.

  • Program delivery organizations are most often designated as non-profit

  • organizations: 501(c)3s – tribal governments are often not mentioned.

  • Targets specific geographical areas and/or populations to be served.

  • Stipulates qualifications for account holders such as household income

  • (most often a percentage of the federal poverty level) and net worth.

  • Accounts holders must be adults, with few exceptions.


State policy trends for individual development accounts idas 1993 2002 states and ida policy knowledge building netw

  • Common Elements Continued:

  • Account structure is time-limited, savings capped, and has a capped

  • match rate (designed to be short-term).

  • The total number of possible participants is restricted – either by stated

  • numbers or by limited funding.

  • Pre-determined choices of asset goals are established: typically limited to

  • homeownership, small business capitalization, and college education.

  • Some financial education is required to be offered to IDA holders.

  • Program administration is most often shared between the state and a

  • non-profit organization in contract with the state (with program

  • implementation responsibilities falling mostly to the non-profit).


State policy trends for individual development accounts idas 1993 2002 states and ida policy knowledge building netw

  • Common Elements Continued:

  • Program evaluation may or may not be required; but some form of

  • reporting to the state is required.

  • Funding is typically appropriated from TANF dollars, state general

  • funds, and/or state tax credits – in that order of occurrence.

  • Little or no funding is appropriated for program development, program

  • operations, dedicated program staff, program evaluation, or networking.

  • Allows, encourages, and sometimes requires that funding be raised

  • from non-state sources.

  • Program design must sometimes be in agreement with IDA requirements

  • of PWRORA and/or AFIA IDAs.


State policy trends for individual development accounts idas 1993 2002 states and ida policy knowledge building netw

A State/Federal Policy Nexus

  • Federal policies relating to similar or identical initiatives vary in design and execution from state to state. What can we learn from this phenomenon? How could IDAs fit in?

  • States often play the role of “incubators,” for new and innovative policies. How do we best use the lessons learned about IDAs to inform federal policy makers?

  • State and federal policies relating to similar or identical initiatives may develop simultaneously, but are not necessarily complimentary. How can this policy disconnectedness be overcome?


State policy trends for individual development accounts idas 1993 2002 states and ida policy knowledge building netw

Back to the Future

  • What asset-building policies currently exist (state and federal)?

  • What are these asset-building policies designed to do?

  • Who do existing asset-building policies target?

  • Who takes advantage of existing asset-building policies?

  • How are existing policies tested and implemented? Do IDAs fit in?


State policy trends for individual development accounts idas 1993 2002 states and ida policy knowledge building netw

Selected State IDA Policy Resources

  • Center for Social Development’s web page: http://gwbweb.wustl.edu/users/csd - go to “State IDA Policy”

  • Corporation for Enterprise Development’s web site: http://www.idanetwork.org - go to “State Pages”

  • Edwards, Karen and Rist, Carl (2001). IDA State Policy Guide: Produced jointly by the Corporation for Enterprise Development and the Center for Social Development

  • Shreiner, Clancy, Sherraden, (2002). Savings Performance in the American Dream Demonstration, Final Report, Center for Social Development.

  • Grinstein-Weiss, Schreiner, Clancy, Sherraden, (2001). Family Assets for Independence in Minnesota Research Report, Center for Social Development.


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