FROM JOSEPH A. ANTOLÍN, ASSET FUNDERS NETWORK, AND DAVID RADCLIFFE, THE NEW SCHOOL’S INSTITUTE ON RACE, POWER AND POLITICAL ECONOMY
JANUARY 2026

AFN Short Take is a blog series highlighting insights and perspectives from recent AFN programming events.

When economist Dr. Darrick Hamilton talks about Baby Bonds, he starts with a moral question: What is the purpose of an economy—and who does it serve?

Drawing on Dr. Martin Luther King Jr.’s understanding of “power as the ability to fulfill purpose”, Hamilton argues that an economy fails when people lack the material resources to act on their aspirations.

This framing anchors AFN’s recent webinar and its new brief, From Cradle to Capital: A Case for Philanthropy to Invest in Baby Bonds. While Dr. Hamilton grounded the conversation in a paradigm shift—understanding wealth as foundational to human flourishing—Kate Reeves, Director of The Connecticut Project, and Megan Elkins, Program Officer at the W.K. Kellogg Foundation, focused on what it takes for philanthropy to help translate that vision into durable public systems: from building public will to implementation with the shared understanding of creating a lasting fixture of an endowment for children born into low income households to ensure they have some wealth to build upon as adults.

For asset funders working across issues in their communities and regions, answering what their roles can be to ensure this paradigm shift occurs is gaining momentum as Baby Bonds and other early wealth-building tools move from idea to implementation. The time is now to act: we can shape the right-sized public investment and infrastructure to best support wealth-building accounts for those likely to be without through the learning and innovation that is taking place through baby bond pilot and state policy efforts.

From Managing Poverty to Investing in People

Persistent wealth gaps are too often incorrectly explained as the result of individual choices or effort. Instead, as Dr. Hamilton notes, “the source of poverty, inequality, and lack of agency…is due to resource deprivation—not having that capital foundation in the first place.”

Dr. Hamilton linked this diagnosis to a deeper structural problem: public policy has prioritized subsistence over mobility. Too often, systems are designed to manage people—regulating behavior, rationing benefits, and mitigating harm—rather than asking what resources are necessary for people to thrive and achieve the outcomes they define for themselves.

At the center of this shift is a reframing of wealth itself.

“The essence of wealth is not as an outcome but as an input because of the agency it provides people to be self-determinating.Dr. Darrick Hamilton

Baby Bonds reflects this reframing with policy logic of a birthright to capital, recognizing that hard work and ingenuity are often limited unless you have some capital foundation to build upon.

What Makes Baby Bonds Distinct

Baby Bonds are publicly funded capital endowments established at birth, held in trust and available later in life for wealth-building purposes such as education, homeownership, or business formation. The accounts are designed to be automatic and progressive, directing larger endowments to children born into households with the least wealth.

Baby Bonds are often discussed alongside other early wealth-building tools, including Children’s Savings Accounts (CSAs), 529 plans, and the proposed Trump (530A) Accounts.

Recently, the announcement of Trump Accounts (530A Accounts) have increased awareness and focus on early childhood as a unique time and opportunity for building wealth. Sizable pledges, $6.25 Billion from the Dell Family and $75 Million from the The Dalio Family to bolster savings in 530A accounts have further highlighted the opportunity of philanthropy to invest in early wealth building strategies and expand investment opportunity.

While all early wealth building accounts share a long-term focus, many savings-based and tax-advantaged models depend on families’ ability to contribute from personal and limited funds or navigate complex systems—conditions that can limit the reach for households already facing financial strain. Baby Bonds, by contrast, function as a more substantial, progressively funded public endowment, structured to reduce barriers to participation from the start and focused on the root causes that lead to stark differences in wealth in the first place.

Importantly, Baby Bonds are not intended to stand alone. They are most effective as part of a broader, complementary asset-building ecosystem, working alongside income supports, accessible financial products including other accounts, and consumer protections to help capital translate into lasting economic security.

From Vision to Implementation: Philanthropy’s Role

If the opening of the conversation focused on why Baby Bonds matter, the discussion with Kate Reeves and Megan Elkins made clear what it takes to make them work over time—and where philanthropy is uniquely positioned to help.

In Connecticut, the first state to enact and implement a Baby Bonds program, Kate Reeves described implementation as a long-term commitment, not a one-time policy win. Passing legislation, she noted, is “the first step in 20 steps,” requiring sustained attention to systems, staffing, and communication long after a bill becomes law. Through its partnership with the Office of the Treasurer, The Connecticut Project invested in implementation planning, communications, and interim capacity, helping ensure the program could function across election cycles given its broad based support while evolving as lessons emerge.

Reeves emphasized that this work is as much about trust as it is about design. Direct communication with families, she explained, is essential—not only so people know the benefit exists, but so Baby Bonds become a positive, non-punitive interaction with the government, rather than another bureaucratic hurdle.

In New Mexico, where Baby Bonds legislation has not yet passed, Megan Elkins described a different but complementary philanthropic role. There, funders have focused on strategic narrative change and community-designed pilots to help shift how economic opportunity is understood. As Elkins put it, philanthropy can “take the risk, prove it can work, and then turn it over to government to invest.” That approach allows innovation to happen now, while laying the groundwork for future public systems.

Across both contexts, a shared lesson emerged: philanthropy’s value lies not just in advancing bold ideas, but in staying engaged long enough to make them durable, supporting the planning, trust-building, and learning that allow public investments like Baby Bonds to fulfill their promise.

Momentum—and a Moment of Choice

Baby Bonds are moving rapidly from concept to policy, with multiple states now advancing legislation and implementation. Connecticut has implemented a fully funded program, while Rhode Island and Vermont have passed legislation authorizing programs, and Washington, D.C., has established a Child Trust Fund framework. In addition, more than 20 states have introduced or are actively considering Baby Bonds legislation, alongside a growing number of pilots and targeted programs.

This momentum reflects a growing recognition that the racial wealth gap is deep, persistent, and structural—and that incremental approaches have failed to reverse it.

As Dr. Hamilton noted, the U.S. already invests heavily in wealth building—largely through the tax code—but those investments overwhelmingly benefit households that already have wealth. The question is not whether we subsidize assets, but who benefits from them. It is a policy priority that philanthropy can help inform.

For philanthropy, this is a moment of choice: whether to treat Baby Bonds as one promising program among many, or as part of a broader effort to redesign how wealth-building opportunity is structured in the economy.

What Can Philanthropy Do?

Based on the conversation and AFN’s From Cradle to Capital brief, funders have several distinct and complementary roles to play:

  • Invest in system design, not just policy wins. Support the long-term infrastructure and broad based understanding that allows Baby Bonds to function across political cycles, including governance, administration, and evaluation.
  • Build implementation capacity early. As Connecticut’s experience shows, philanthropy can help government plan for durability by funding implementation design, communications, and interim staffing before gaps emerge.
  • De-risk innovation and narrative change. In states where legislation has not yet passed, philanthropy can fund pilots, community-designed models, and fund strategic narrative work that shifts public understanding and provides policymakers with evidence to act.
  • Strengthen protections and guardrails. As new capital flows to individuals and communities, funders can support consumer protections, research on reducing or preventing predatory risk, and systems that reduce information asymmetries.
  • Treat Baby Bonds as part of an ecosystem. Baby Bonds work best alongside—not in competition with—other asset-building tools and strategies.

Together, these roles point toward a larger opportunity: not simply to expand access to capital, but to help build an economy that invests in people from the start—and gives everyone a real chance to shape their own future.

To learn more, explore AFN’s brief, From Cradle to Capital: A Case for Philanthropy to Invest in Baby Bonds, and the recording of the Cradle to Capital webinar. Funders can also access The New School’s Baby Bonds resources for research, policy tracking, and analysis on capital endowments and economic agency.

AFN is grateful to The McKnight Foundation for its support of the From Cradle to Capital brief.