An affiliate of Southern Development Bancorporation

1. SEED Initiative IDA State Policy Conference November 11, 2003 An affiliate of Southern Development Bancorporation

2. Good Faith Fund • Programs • Industry Partners • Asset Development • Public Policy

3. IDAsType of Asset Purchased

4. IDAsCumulative Savings

5. IDAsBanking the Unbanked

6. Why SEED? • Fits closely with mission and range of programs and strategies • Wanted to provide rural site • If it can work in the Delta, it can work anywhere

7. Design Questions • We don’t have expertise with children. With whom can we partner? • How can we design something that is scalable? • With which financial institutions do we partner? • Can we find some legislative or other champions? • What can we build on of ours and of our partners? • Can we do some things better?

8. SEEDTarget Population • 75 three-year olds in Phillips County, Arkansas • Participants in Head Start and HIPPY programs • Most will have incomes below the poverty line

9. SEEDPhillips County Demographics • 33% poverty rate, 45% for African Americans • 54% with incomes less than $25,000, 66% of African Americans • 38% of adults with less than high school education, 46% of African Americans • County population - 26,000 • 2200 children under 5

10. SEEDKey Partners • Mid Delta Community Services Head Start • Helena-West Helena School District HIPPY Program • First National Bank of Phillips County

11. SEEDKey Design Elements • Accounts seeded with $500 deposit and $500 match • Deposits by family and friends matched 1:1 up to another $1000 • Start with savings account, transfer to 529 account later • Developmentally appropriate lessons on money and savings for children • Build on existing structure of Head Start and HIPPY

12. SEEDKey Design Elements • Economic skills classes for parents: • Money management • Spending as a habit, saving as a goal • Financial Services • Credit Management/Solving Debt Problems • Renting, Leasing, and Buying • Options for investing in education/helping your child prepare for college

13. SEEDTimeline • Head Start and HIPPY Staff Orientation (September) • Hold Information Sessions in conjunction with regular parent meetings (October – November) • Enroll participants (December – January) • Economic Skills Classes (January 2004 – November 2004) • Education Investment Class (January 2005)

14. SEEDTimeline • Roll savings into higher yield accounts (Spring 2005) • Maintain monthly contact with families (Present – May 2005) • Maintain quarterly contact with families (June 2005 – December 2007)

15. SEEDPolicy Expertise • Secured funding and tax credit for IDA demonstration in Arkansas • Removed asset test from Medicaid for children • Changes to state welfare reform law • Increased funding for child care • Scholarship program for non-traditional students

16. SEEDPotential Policy Activities • Research and advocate for changes to state or federal benefits programs to support SEED accounts • Work with CFED and other demo sites to build support for state and/or national policy for SEED-like accounts