Key Takeaways
- Gov. Gavin Newsom urged California families to claim Trump accounts and funds from the state’s children’s savings accounts.
- California will partner with the federal government to solicit donations so that funds will be split between the two accounts.
- California is also developing a navigation tool to help families access free money available at the federal, state and local levels.
Gov. Gavin Newsom threw his support behind the Trump accounts Friday, encouraging California families to apply for the federally created child savings account even as questions remain about the program. So far, around 600,000 accounts are believed to have been created for California children.
He also announced the Golden State Challenge, a public-private partnership with Invest America, the initiative formed alongside Trump Accounts, which will designate corporate and philanthropic donations to Trump Accounts and California’s Children’s Savings Accounts program.
For the first time, perhaps putting politics aside, Newsom is supporting — and encouraging — families to demand the Trump accounts.
“We’re here to encourage people to take advantage of it, to not fall prey to politics or cynicism, or maybe even the fear that ‘if I download a Trump account it means something,'” he said. “It’s not. It just means something to your child. It’s not Trump’s money; it’s your child’s money.”
His call to action even encourages funding the federal accounts.
The federal government launched the Trump accounts this year; It is a savings program intended to be a long-term retirement and wealth-building tool that allows businesses and government entities to contribute.
California launched its Kids Investment and Development Savings, or CalKIDS, program in 2022. It provides children from low-income families and English learners with between $500 and $1,500 for college or career training, as well as start-up deposits for the state’s newborns.
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More than 6 million California school-age children and newborns are eligible for state-funded savings accounts, a number that increases each year. Money is automatically deposited in a student or newborn’s name, but families must claim the accounts. by registering online. Although constantly increasing, 1 million, or almost 17%, of eligible accounts have been claimed.
The Golden State Challenge implores businesses and philanthropic organizations to donate to the initiative, with contributions split between eligible CalKIDS accounts and Trump accounts.
Until now, CalKIDS has been solely state funded.
Trump accounts, on the other hand, can receive an initial federal deposit as well as contributions from family, philanthropists, nonprofit organizations, government agencies and businesses. The U.S. Treasury, for example, will deposit $1,000 into the accounts of children with Social Security numbers born between 2025 and 2028. In California, more than 350,000 of the 400,000 babies born each year in the state could be eligible.
Besides depositing seeds for newborns, other organizations can contribute to the Trump accounts of all children in a specific state or geographic area. And companies can contribute to their employees’ accounts.
“It’s direct. It’s tangible. It’s results-oriented,” Newsom said Friday. “You can see it, taste it, feel it. You’re making a difference directly for the next generation. You’re giving them hope.”
Michael and Susan Dell, founders of Dell Technologies, have donated more than $800 million to provide $250 in deposits to 3.3 million California children ages 10 and younger who live in communities where the median family income is less than $150,000.
Micron, the semiconductor maker, is contributing $250 to children living in Sacramento and Santa Clara counties, potentially reaching 80,000 children. The company will also put up to $1,000 in employee contributions into their children’s accounts.
Other companies have also announced contributions or matching programs for their employees’ children. Companies also promise to “adopt” schools or put money into the accounts of children in the communities they serve, according to Brad Gerstner, founder and president of Invest America.
Gerstner announced Friday that one anonymous philanthropist had adopted the city of Oakland and another planned to adopt all of East Palo Alto’s children, about 6,000 children.
Already, an anonymous donation of $3.5 million to San Francisco will raise $500 for every child born in 2026.
Five hundred eligible Kern County newborns will each receive $1,000, thanks to a foundation donation.
Still, questions and concerns remain about the Trump accounts, while federal guidance on some aspects of the program is still being developed.
California’s experience with CalKIDS offers a lesson: Even when money is available to help children, families may not take advantage of it if there is a lack of awareness, lingering questions or a new process to follow.
To help families, California is developing a pilot tool, the Early Investment Accounts Navigator, available later this year, that will identify all accounts their child may be eligible for, including newly created Trump accounts; CalKIDS for more than 6 million children; California’s HOPE Trust has 82,000 foster youth bereaved by the pandemic; and locally operated children’s savings programs in more than a dozen counties and cities across the state.
For example, a newborn in a low-income family in Oakland already has $500 in an Oakland Promise Brilliant Baby account, $100 from CalKIDS and $1,000 in a Trump account – one at the local, state and federal levels.
Other states will be able to adapt the navigation tool to their local and state programs.
This story was originally published by EdSource.
