What are baby bonds?

The bottom 50% of U.S. households— over 66 million families—own just 2.5% of total household wealth. Baby bonds, a type of early wealth-building accounts, have extremely promising evidence on bridging the US wealth gap.

Baby bonds are government-funded trust accounts for low-income children, which help break cycles of poverty by providing early assets to those historically excluded from wealth accumulation through capital. A newborn is seeded an account with cash which is invested and publicly managed. It becomes accessible in young adulthood for wealth-building purposes like education, homeownership, or starting a business.

Connecticut pioneered this approach by establishing a permanent "baby bond" for every baby born on Medicaid, followed by similar legislation in California and Washington, D.C.  Nationwide momentum is building around this concept as well, with nearly two dozen states and municipalities exploring or implementing early-wealth building initiatives, plus recent federal legislation establishing “Trump Accounts” effective in 2026.  “Trump Accounts” are federal tax-advantaged children’s savings account program wherein every baby born in the United States between January 1, 2025 and December 31, 2028 will receive a one-time $1,000 government contribution into a designated investment account.

Colorado is one of 20 other states that is actively considering implementing a state-wide baby bond program. This philanthropically funded pilot will help lay the necessary groundwork and iron out the implementation details required to ensure success of any future possible Colorado baby bonds program..

What will the state-wide Colorado pilot entail?

The pilot will provide 100 young people across Coloardo with individual accounts seeded with $20,000 and invested in diversified exchange-traded funds (ETFs).  This amount was selected to simulate what a baby bond issued at birth would accrue to roughly by the age of 18.

The participating young Coloradans will receive tailored financial coaching and engage with interactive learning tools designed to develop their understanding of capital markets and foster their identity as participants in the wealth economy.  After an initial vesting period, young people will gain access to their funds for specific wealth-building purposes, including higher education or technical training, homeownership, business ventures, or retirement. The accounts are projected to acrrue further growth before the age of disbursement, providing assets that can unlock opportunity.

The Colorado pilot is generously supported through the philanthropic contributions of Gary Community Ventures, Goodman Philanthropies, and a coalition of allied local Colorado partners. Impact Charitable has been selected to design and administer the pilot. Impact Charitable partners with public and private funders who want to mobilize their assets into their communities in creative and impactful ways,  and will oversee a third-party evaluator to assess the impact of the pilot.

Why did Goodman Philanthropies invest?

Baby bonds are one of the most promising early assets policies and programs with demonstrated evidence. With now significant state and federal momentum, the timing is ripe to catalyze that energy in other states such as Colorado that are well-positioned to enact baby bonds state-wide legislation. Goodman Philanthropies is honored to contribute $1M in philanthropic capital to fund this effort, with a 2x match from Colorado-specific philanthropic funders (to fund the total pilot program cost of $3M).

We see the role of our philanthropic capital as helping to streamline the implementation details and processes through this initial pilot, so that when Colorado is ready to consider leveraging its state budget towards a state-wide baby bonds program, the hard stuff is already ironed out.

We are excited to see state-wide baby bonds programs continue to grow, in the backdrop of federal programs and policies as well that can together create a robust suite of early assets offerings for America’s next generation.

What impact are we hoping to see?

In the near-term, next year 100 young people in Colorado will receive $20,000 seed accounts, totaling $2M in new net worth that will grow and compound to roughly $2.5M - $3M at time of maturity.  Through layering on financial education, the pilot will impact the attitudes, behaviors, and opportunities for asset-limited young people.

In the longer-term, this pilot will seek to build a scalable model that can be used to advance a permanent baby bonds policy proposal in Colorado’s state legislature, with the potential to expand access to appreciable assets and wealth-building opportunities for over 25,000 Colorado kids per year.

About Goodman Philanthropies

Goodman Philanthropies supports innovative, evidence-based solutions that expand economic mobility across the United States. We prioritize approaches that combine rigor, innovation, and scale to move the needle on poverty and opportunity. Our work is generously funded by Bennett & Meg Goodman, who are committed to dismantling barriers to upward mobility through strategic, impact-driven philanthropy. Learn more about our approach and see our grants portfolio at www.goodmanphilanthropies.org.