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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, 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


  • 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 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 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)


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)


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


Four Significant State IDA Policy Trends

  • Legislation Strategy and Design

  • Funding Appropriations

  • Program Administration

  • Program Evaluation


  • 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.


  • 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).


  • 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.


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?


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?


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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