`` the States
IDAs in
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
IDAs in the States
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?
IDAs in the States
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)
IDAs in the States
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)
IDAs in the States
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)
IDAs in the States
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
IDAs in the States
Four Significant State IDA Policy Trends
Legislation Strategy and Design
Funding Appropriations
Program Administration
Program Evaluation
IDAs in the States
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.
IDAs in the States
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).
IDAs in the States
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.
IDAs in the States
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?
IDAs in the States
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?
IDAs in the States
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.