The short version
We spent the past year funding some of the country's best tax and asset-building experts to make Trump Accounts work for low- and moderate-income families. The rulemaking is now largely settled, and two design flaws we consider disqualifying survived it: a tax structure that penalizes the very families the accounts claim to serve, and account infrastructure built on a trading platform whose incentives run opposite to patient, long-horizon investing.
So we're stepping back from Trump Accounts as a pillar of our strategy (with one narrow exception for newborns, described below) and concentrating our early-assets capital on baby bonds and children's savings accounts, where the design, the evidence, and the momentum are all pointed the right way.
Why we invest in early assets at all
Start with the number that first convinced us: children with even a small savings account in their own name are roughly three times more likely to enroll in college, and four times more likely to graduate, than similar children without one.1 An account opened at birth changes what a family plans for, what an emergency costs, and what a young adult can say yes to: a degree, a first home, a business. That is the case for early assets, the simple idea of getting real capital into a child's name as early in life as possible, and it is one of the most promising economic-mobility tools philanthropy can back.
We at Goodman Philanthropies have been huge proponents of early-assets programs and policies (we're funding Colorado's statewide baby bonds implementation pilot right now). So when Congress created a brand-new, federally seeded account for nearly every American newborn, we paid attention.
What Trump Accounts promised, and what we did about it
The 2025 reconciliation bill created "Trump Accounts" (Section 530A of the tax code): a $1,000 federal deposit for every eligible child born 2025–2028, invested in low-cost index funds, with room for families, employers, states, and philanthropies to contribute up to $5,000 a year until age 18.2 A universal, federally seeded account at birth is something asset-building advocates had sought for decades: it is the first time the federal government has simply given investment capital to nearly every newborn.
But the statute left enormous discretion to Treasury and IRS rulemaking, and the details would determine whether the accounts built wealth for low-income families or bypassed them. In a piece I wrote with the Aspen Institute in January, we laid out a specific fix-it agenda: four changes Treasury and the IRS could make on their own, and four deeper repairs that only Congress can deliver.3
We put money behind those asks. Over the past year, Goodman Philanthropies made three grants (you can read about each on our portfolio page) to organizations working directly to shape the rulemaking:
Aspen Institute Financial Security Program
Convened expert roundtables and published the implementation agenda for making 530A accounts work for low- and moderate-income households.
Center for Taxpayer Rights
Nina Olson's team submitted formal comments, met with Treasury career staff, exposed enrollment-portal failures, and testified at the IRS public hearing.
Urban Institute / Tax Policy Center
Provided Treasury with expert analysis and formal comments on inclusive design, enrollment, and outreach for low-income and immigrant families.
What we wanted improved, and where each fix landed
This was the design agenda, in full. On the left, the changes Treasury and the IRS could make on their own, with our read on where each one landed as of July 2026. On the right, the deeper repairs that still need Congress.
Near-term fixesTreasury & IRS could act now
Make enrollment automatic, not conditional on tax filing
Opt-out at birth via Social Security number, not tax-filing opt-in.
✗ Didn't happen Foster-care carve-out only
Set strong standards for financial institutions
Low, capped fees; strong consumer protections; plain-language disclosures; default investments built for long time horizons; data protection; ongoing reporting.
≈ Partial Single-trustee launch
Make sure assets don't count against eligibility for other benefits
Protect low-income households' other public benefits.
≈ Partial: protected before 18, patchwork after
Simplify and standardize supplemental contributions
Let philanthropy, states, and employers add money at scale.
✓ Closest to right
Longer-term fixesNeed Congress
Fix the tax treatment on the way in and the way out
Roth-style: untax the gains on the way out, in line with 529s.
Open
Consolidate and simplify similar programs
529s, Coverdells, tax credits, baby bonds. Complexity lowers uptake in a big way.
Open
Restore complementary family supports
Accounts can't substitute for income supports we know work, like the expanded Child Tax Credit.
Open
Make the seeding progressive, based on need
Seed accounts using means-tested criteria, and add financial education for first-time investors.
Open
What the Trump Accounts rulemakers have done so far
August 2025Treasury and IRS announce intent to issue 530A regulations (Notice 2025-68), opening the comment window.4
March 2026Proposed regulations arrive: enrollment is opt-in, via a new IRS form or an ID.me-gated portal, with no automatic enrollment.7
June 2026Treasury announces the Fostering the Future initiative: states may mass-enroll children in foster care.8
July 16, 2026The IRS holds its public hearing on the proposed regulations, where witnesses (including our grantee the Center for Taxpayer Rights) press Treasury to extend group enrollment beyond foster care: "Treasury should use this discretion to simply apply the $1,000 to any qualified child who is enrolled."11
Automatic enrollment did not happen. Treasury concluded it "likely won't be possible" under its reading of tax-privacy law,11 and the opt-in process that replaced it (tax filings, a since-reworked signup site, ID.me identity verification) is hardest on exactly the families the $1,000 is best positioned to help. The genuine bright spot is Fostering the Future: by letting state child-welfare agencies open accounts in bulk for foster children, Treasury has conceded the principle that government-held data can enroll children directly. Our grantees are now pushing to extend that same mechanism to families states already know through SNAP, WIC, and other programs. The door to auto-enrollment is open a crack, and they intend to widen it. Benefit protections landed partway: accounts won't count against eligibility before age 18, but the treatment afterward remains a patchwork. Supplemental contribution rails came closest to right (witness the Dell and Dalio families' commitments of $6.25 billion and $75 million respectively to top up children's accounts12), though statutory limits on geographic targeting still need a legislative fix.
The two flaws we can't get past
Rulemaking was always going to polish the statute, not rewrite it. With the regulations now essentially settled, two structural problems remain, and for us they are disqualifying.
1
The tax treatment is upside down
Money goes in after-tax, and investment gains come out taxed as ordinary income. That is a worse deal than a plain brokerage account (where investment gains are taxed as capital gains, not ordinary income), and far worse than a 529 or Roth vehicle (where gains are not taxed at all).
The Cato Institute's Adam Michel put a number on it in the Wall Street Journal: a family saving $5,000 in a Trump Account rather than an ordinary taxable brokerage account ends up with $2,451 less after 30 years, purely because of the withdrawal tax treatment.13 An account that leaves diligent savers behind where they'd be at any discount broker is not a wealth-building vehicle for working families.
2
The fiduciary environment rewards the wrong behavior
The accounts launched with Robinhood as sole initial trustee, with BNY Mellon as custodian.9 Whatever its merits as a brokerage, Robinhood's app-first model is engineered for engagement and frequent trading, arguably the exact gamified, day-trading-adjacent behavior an 18-year child account should be teaching families to avoid.
This matters most for first-time investor households. Our own research shows lower-income retail investors already skew toward crypto, options, and windfall-driven trading, and exit at a loss far more often than middle-income investors. Housing a child's patient capital inside that environment is a design choice, and in our view the wrong one.
There's a third, quieter reason for philanthropists specifically: a charitable dollar contributed to a Trump Account can ultimately create a tax bill for the child who receives it. A dollar deployed through a baby bonds program, a CSA seed, or a direct cash transfer does not. When the alternative vehicles are both better-designed and more targetable, the case for philanthropic dollars flowing into 530A accounts gets thin quickly.
The remaining fixes, the tax treatment above all else, now require Congress, not Treasury. That's an advocacy timeline measured in years, not months. In the meantime, our philanthropic capital will do more good in other early-assets programs that are already built right.
How the early-assets options actually compare
This is the landscape as we see it:
