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An Oakland nonprofit dedicated to helping children from low-income families earn a college diploma is celebrating a milestone.
Oakland Promise has funded college savings accounts for just over 1,000 families who are enrolled in its Brilliant Baby program, which gives parents the financial tools to see their newborn eventually realize his or her potential through higher education.
“We want our children to be prepared to thrive economically, and education is an important piece of that,” said Amanda Feinstein, founder of the nonprofit’s Brilliant Baby program.
Using donations from the City of Oakland, the private sector and individuals, Oakland Promise has funded each of the 1,016 accounts that have been set up to date with an initial $500 deposit.
The $500,000 that it invested over the course of establishing the first 1,000 college savings accounts (CSAs) now is worth $664,000, a nearly 33% gain over the past four years.
And children who were in on the ground floor when Oakland Promise began making the contributions in 2017 have seen their savings grow by several hundred dollars.
Known as 529 plans, these incentives to save for college are named after the Internal Revenue Code section that waives federal income and capital gains taxes on certain accounts that are earmarked to cover tuition.
Each state has its own plan and either hires an investment company to manage the assets or does the work itself.
Rare opportunity for low-income families
CSAs offer low-income families the rare chance to invest in the stock market and reap the benefits that accrue over time, Feinstein said.
To qualify for a Brilliant Baby CSA, a child must be less than 1 year old, a resident of Oakland and eligible for Medi-Cal.
The program further increases the chances that the seed money ultimately will result in a college graduation by pairing families with a certified financial coach who helps them identify goals — buying a car or finding a job, for example — and then devise a plan for attaining them.
In mapping out those steps, parents can alleviate at least some of the money pressures that make it difficult to think about anything other than simply getting by, Feinstein said.
“Parents (have) additional bandwidth to focus on their children and their development,” she said.
According to Oakland Promise, 80% of parents who obtained a CSA for their child over the past year took advantage of the individualized help.
Financial literacy training
Workshops on topics ranging from reducing debt and boosting credit scores to understanding what motivates a person to spend or save are available as well; 317 parents participated over the past year.
During the same period, 250 people also attended presentations specific to parenting such as early brain development and the best techniques to use when reading to youngsters. With the knowledge they gain, parents are better equipped to help their children learn, Feinstein said.
In its announcement of passing the 1,000-family mark, Oakland Promise cited the preliminary results of an ongoing study of the Brilliant Baby program that suggests having savings set aside for college offers intangible benefits as well.
Parents are more hopeful about their child’s future and have higher expectations that he or she will finish an additional year of school, the organization reported. In a recent survey, 93% anticipated their son or daughter will go to college or vocational school.
Learn about Oakland Promise
Those who would like to know more about how Oakland Promise is making a difference and its plans for the future are invited to its annual community meeting via Zoom at 3 p.m. on Nov. 5. Participants are asked to sign up by clicking https://www.tfaforms.com/4932401.
The event will include a panel of parents and students who will talk about their experiences in not only Brilliant Baby, but also Oakland Promise’s three other programs, each of which is tailored to support the education of a different age group.
To donate, get involved with or learn more about Oakland Promise, visit oaklandpromise.org.