How Philanthropy Can Strengthen the Financial Well-Being of Youth and Young Adults

A report from the Asset Fun­ders Net­work exam­ines the state of finan­cial secu­ri­ty among young peo­ple in the Unit­ed States. High Stakes High Reward: How All Fun­ders Can Make Crit­i­cal Cat­alyt­ic Con­tri­bu­tions to Invest­ing in the Finan­cial Secu­ri­ty of Youth and Young Adults draws upon research fund­ed by the Annie E. Casey Foun­da­tion and offers ideas for how phil­an­thropic orga­ni­za­tions can invest in and sup­port young people.

“Ensur­ing young peo­ple are finan­cial­ly secure is crit­i­cal to their suc­cess lat­er in life,” says Francesca Jean-Bap­tiste, a senior asso­ciate with the Foun­da­tion. ​“This report pro­vides impor­tant insights into the chal­lenges youth and young adults face — and the assis­tance they need — as they become finan­cial­ly independent.”

What Is Finan­cial Security?

Indi­vid­u­als who have finan­cial secu­ri­ty can com­fort­ably pay their bills and oth­er basic needs. This means greater finan­cial free­dom for them­selves and their fam­i­lies. Finan­cial secu­ri­ty is the intend­ed out­come of many types of eco­nom­ic mobil­i­ty pro­grams and policies.

To enjoy finan­cial secu­ri­ty, young adults have needs in four dis­tinct areas that must be met:

1. Finan­cial sta­bil­i­ty. This is the foun­da­tion of finan­cial secu­ri­ty. Finan­cial sta­bil­i­ty means an indi­vid­ual can pay for every­day or emer­gency expens­es while con­tin­u­ing to meet their finan­cial goals.
2. Oppor­tu­ni­ty path­ways. Work­ers need clear ways to pre­pare for and access edu­ca­tion and job train­ing. For youth and young adults who are new­ly finan­cial­ly inde­pen­dent, these path­ways are crit­i­cal for build­ing assets.
3. Finan­cial capa­bil­i­ty. This includes the knowl­edge and skills need­ed to man­age your own finances as well as access to high-qual­i­ty fis­cal prod­ucts, such as mon­ey man­age­ment ser­vices or finan­cial advising.
4. Sup­port and guid­ance. Youth and young adults need sup­port and guid­ance from knowl­edge­able adults and peers and access to men­tal health ser­vices or sup­port ser­vices for young parents.

Bar­ri­ers to Finan­cial Secu­ri­ty for Young People

Youth and young adults in the Unit­ed States face sev­er­al obsta­cles on their path to finan­cial secu­ri­ty, including:

• the declin­ing val­ue of wages and work­place benefits;
• reduced pub­lic invest­ment in edu­ca­tion and home­own­er­ship oppor­tu­ni­ties;
• long­stand­ing sys­temic dis­crim­i­na­tion that has pre­vent­ed Black, Lati­no and Native Amer­i­can house­holds from access­ing the sup­port they need, build­ing wealth and find­ing finan­cial sta­bil­i­ty; and
• the ris­ing cost of col­lege and oth­er post­sec­ondary edu­ca­tion or training.

Rec­om­men­da­tions for Funders

To ensure young peo­ple can achieve finan­cial secu­ri­ty through­out their adult lives, the report offers sev­er­al key rec­om­men­da­tions for grant makers:

• Devel­op part­ner­ship mod­els that draw on young adults’ expe­ri­ences and insights. It’s impor­tant to remem­ber that young peo­ple are experts when it comes to their expe­ri­ences, chal­lenges and needs.
• Tar­get invest­ments that address finan­cial sta­bil­i­ty. To become finan­cial­ly secure, young adults need time and mon­ey. Fun­ders should ensure young peo­ple have access to reli­able income that allows them to cov­er their basic needs and pur­sue edu­ca­tion or career training.
• Focus on prac­tices and poli­cies that pro­vide acces­si­ble, reli­able sup­port. Grant­mak­ers should fund ini­tia­tives that are reli­able, easy to access and respon­sive to the chang­ing needs of young people.
• Fund work that con­sid­ers and inte­grates all facets of finan­cial secu­ri­ty. While pub­lic- and pri­vate-sec­tor insti­tu­tions have invest­ed in dif­fer­ent aspects of finan­cial secu­ri­ty, the report empha­sizes that all aspects should be con­sid­ered equal­ly impor­tant. To see sub­stan­tive results for young peo­ple, grant mak­ers should ensure invest­ments sup­port finan­cial secu­ri­ty, oppor­tu­ni­ty path­ways, finan­cial capa­bil­i­ty and sup­port and guid­ance while address­ing any gaps they identify.

Dis­cov­er how finan­cial lit­er­a­cy helps young people