It's always gratifying when your assumptions are backed up by evidence. Like, when I thought adding a little coffee to my chocolate cupcakes might take them from "yummy" to "ghahhar (read: sound of Homer Simpson in presence of doughnut)." I had reason to believe this might be so: it had been a successful strategy I'd used in other baking applications. But, to borrow a phrase from my mother, sometime you just don't know until you know.
Having proof of concept, demonstrated success of an idea, is particularly important when it comes to policy making. The Asset Building Program has long advocated The Saver's Bonus, a proposal that would leverage the scale and resources achieved at tax time to offer an opportunity for low-income families to save my offering facilitated account opening and a direct match incentive, as a needed policy. So, when the City of New York launched $aveNYC in 2008 to test this concept, and after 3 years, found overwhelmingly positive results, we knew we had a winner. Now, at the end of the first year of SaveUSA, and expansion of the $aveNYC model to Tulsa, Newark, and San Antonio, we have more reason to expect the success of this model on a national scale.
Here are some highlights from a hot-off-the-presses report from NYC, who administered the program:
- 1,664 accounts were pended
- over $875,000 were committed to the accounts at the time they were opened
- almost 3/4 of participants maintained their account for the entire year term required to receive the match
- participants average $902 in savings after the match
In addition to these outcomes, the report is rich with findings about obstacles that were encountered in the field during implementation and how those were resolved and provide valuable insights for other tax time pilots.
Over the coming tax seasons, we'll be looking to see if these accounts were maintained, how the savings were used, and other impacts that program had on the financial lives of those who participated. But, based on the body of evidence that this new report is adding to, those results will be icing on an already ghahhar cupcake.