Colorado’s Baby Bonds feasibility study identifies financial coaching, trusted outreach and support for immediate financial needs as central to effective program design.

Baby Bonds are publicly funded investment accounts established for eligible children and allowed to grow into adulthood, when funds can be used for wealth-building purposes such as higher education or training, homeownership, entrepreneurship or retirement. In Colorado, the policy has gained attention as leaders consider persistent disparities in wealth and financial security 

Approximately 17% of Colorado households have zero or negative wealth, meaning their debts equal or exceed the value of their assets. In 2023, approximately 11% of Colorado children lived in poverty, with some of the highest rates concentrated in rural counties.

Those statistics reflect the daily consequences of financial insecurity. Households with little accumulated wealth have fewer resources when a car breaks down, rent rises or a medical bill arrives. Years later, the same absence of assets can determine whether a young adult can pay for education, invest in a business or become a homeowner.

First introduced in the Colorado General Assembly in 2024, House Bill 24-1297 would have directed the state treasurer to study the feasibility of a Baby Bonds program and develop recommendations for how one could operate in Colorado. The bill did not advance, leaving questions about program design, long-term funding and how a statewide approach could operate within Colorado’s fiscal constraints, including the Taxpayer’s Bill of Rights, or TABOR.

Recognizing the need for timely research, the Colorado Fiscal Institute (CFI)  and Soul 2 Soul Sisters (S2SS) commissioned an independent feasibility study in 2025. The Systems for Equity and Economic Dignity research team (SEED) at the Colorado School of Public Health on the University of Colorado Anschutz Medical Campus was selected to conduct the work. The research team included principal investigator Tran T. Doan, PhD, MPH, along with Johnny Huynh, PhD, MPH; Alyssa M. Hernandez; Corey Jacinto; and Ainsley Buck. 

The resulting report, “Colorado Baby Bonds Program Feasibility: An Economic Evaluation and Policy Recommendations,” is based on research conducted from August 2025 through June 2026. Its findings will be presented publicly during an Aug. 25 webinar. 

Beyond the account balance

SEED used economic modeling to project how different program structures could affect wealth over time, reviewed policies in other jurisdictions and conducted interviews with potential beneficiaries and implementers.

The qualitative portion of the research included 35 interviews: 25 with potential beneficiaries, including 21 caregivers and four young adults, and 10 with people involved in policy or program implementation. 

Although not intended to represent every Colorado family, the interviews provided a closer look at practical concerns and implementation questions that financial modeling alone cannot capture. 

The economic analysis found that both targeted and universal Baby Bonds programs could reduce wealth disparities, with greater reductions when eligibility was expanded and public investment increased. 

Wealth disparities extend across Colorado

Without intervention, models examined by SEED project that by age 35, white young adults in Colorado would have approximately three times the median wealth of Black young adults and twice the median wealth of Hispanic young adults. 

The racial wealth gap remains a significant part of Colorado’s economic landscape. The report identifies lower incomes, limited inheritance and discriminatory policies among the conditions that have constrained wealth accumulation across generations. Historically, redlining and racially restrictive housing covenants limited Black and Latino families’ access to mortgages and homeownership, restricting participation in one of the primary ways American households have built and transferred wealth.

However, race is not the only measure of unequal financial opportunity. Geography, income, family assets and access to resources also influence what people are able to build and pass down.

A young adult in metro Denver may enter adulthood in an increasingly expensive housing market. A young adult in rural Colorado may face fewer nearby employment opportunities or incur high travel costs while commuting long distances for college or workforce training. Families in both places may earn enough to cover regular expenses, but have little accumulated wealth to draw from when a child transitions to adulthood. 

The interviews examined what families and young adults would need between enrollment and access to understand the program, remain connected and make informed decisions when funds become available.

The importance of financial capability

Financial education emerged as one of the strongest themes during interviews. 

“I didn’t have the opportunity to learn about savings…I wish I would have,” one young adult told researchers. 

The report defines financial coaching as one-on-one guidance designed to build the knowledge, skills and confidence people need to pursue individual wealth-building goals. Participants consistently identified coaching as an important component of implementation, with support for financial education that begins before recipients gain access to their accounts and includes caregivers as children grow.

The distinction between financial knowledge and financial capability is an important aspect of wealth management. Understanding loan interest, navigating mortgage terms and evaluating investment risk requires the ability to apply financial knowledge when making decisions with long-term financial consequences. 

One implementer interviewed by SEED described financial capability as including an understanding of “the psychology of money” and “how we as people, as a society, in our cultures treat money differently.” 

Researchers recommend accessible and culturally responsive financial education with coaching as a core component for young adults and their families. Importantly, they do not recommend requiring financial education as a condition for claiming Baby Bonds funds, as the approach may create a hurdle. 

Creating pathways to participation 

Participants emphasized automatic enrollment, sustained outreach, multilingual communication and partnerships with trusted community organizations. They also raised concerns about unintended effects on public benefits or taxes when funds are accessed.

“If you don’t offer it in multiple languages, you’re missing a lot of population,” one participant told researchers. 

Since the program could span nearly two decades, families may move, change contact information or lose touch with the administering agency. Regular statements and accessible account information could help sustain a connection.

SEED evaluated a targeted model connected to Medicaid-covered births, similar to the structure used in Connecticut. Researchers estimate that approximately 22,000 Colorado births annually could fall within that model. Linking eligibility to Medicaid could allow the state to identify children through an established system rather than requiring families to discover and apply separately for the program.

A Georgetown University Center for Children and Families analysis highlighted by the Colorado Children’s Campaign found that in 2023, 37.4% of children in Colorado’s small towns and rural communities relied on Medicaid or the Children’s Health Insurance Program for coverage, compared with 33.1% of children in metropolitan areas. 

“Nearly two out of every five rural Colorado kids get their health coverage through Health First Colorado,” Toni Sarge, director of child and family health at the Colorado Children’s Campaign, said when the analysis was released. 

Participants also cautioned against eligibility rules that could exclude financially constrained families whose incomes fall slightly above public-benefit thresholds. The report recommends considering eligibility and contribution structures that account for those households.

For families, eligibility is only one part of the financial picture.

Wealth tomorrow does not pay today’s bills

A Baby Bonds account is designed for the long term, while families manage immediate expenses such as housing, transportation, utilities and child care. An unexpected financial crisis can create an emergency regardless of what an investment account may be worth years later.

While participants raised concerns about housing instability, food insecurity and debt, implementers noted that a family carrying significant debt may first need greater stability before concentrating on long-term asset accumulation. 

Participants considered cash transfers with clear eligibility standards and safeguards, along with referrals to community organizations providing financial coaching and other services.

The report points to Vermont as an example of a state pairing long-term wealth building with support for families’ immediate financial needs. 

Vermont’s developing “Superbundle” approach combines interventions like maternal supports, cash assistance and Baby Bonds, illustrating how a future financial asset can coexist with support for families’ immediate needs.

Wealth and well-being

Beyond its economic implications, the study considers how financial security can influence health and well-being, reflecting the public health expertise of the research team.

The feasibility report cites longitudinal research involving U.S. adults that found family savings were associated with a lower likelihood of screening positive for depression, anxiety or both. Researchers also note that asset ownership has been associated with higher wealth and improved health across the life course. For participants, the relationship was described more personally. 

“It would be a relief for me as a mom…especially for my mental health,” one caregiver told researchers. 

Participants associated financial security with less reliance on debt, more options and less stress when unexpected expenses arise.

Baby Bonds policies are relatively new, without enough research to determine that they improve health, but for interviewees in Colorado, financial stability and well-being are difficult to separate. 

An account balance can be measured in dollars. The sense of security created by having options is more difficult to quantify. 

From projections to practice

While Colorado considers whether to develop a statewide Baby Bonds program, some of the study’s recommendations are already being explored on a smaller scale. 

The five-year Ignite Futures Fund demonstration, led by Impact Charitable in partnership with Gary Community Ventures and other funders, includes 125 students ages 16 and 17 who qualify for Medicaid or CHP+. Each participant receives a $20,000 seeded investment account.

The investment is paired with financial education, hands-on investing experience, coaching and community support. Participants can eventually use their accounts for education, homeownership, entrepreneurship or retirement.

Ignite differs from a traditional Baby Bonds program because participants receive philanthropically-funded assets as teenagers. The program’s innate differences limit what the pilot can show about a statewide program, but participants are managing real assets, allowing administrators to observe where guidance is needed and how families engage. Lessons learned can inform Colorado’s policy discussion as longer-term evidence develops.

From research to public discussion 

The completed feasibility study places Colorado within a growing national effort to advance Baby Bonds policy. CFI, Gary Community Ventures and Impact Charitable are participating in a national Baby Bonds Community of Practice led by the Institute on Race, Power and Political Economy at The New School and the Urban Institute. Colorado applied for the pilot initiative and was selected as one of approximately 12 participating states, each at a different stage of Baby Bonds research, policy development or implementation. 

“We’re sharing lessons, opportunities, policy, communications, messaging, research and data, and how to involve community in all of this,” CFI Deputy Director Esther Turcios said. “It’s a really great and important opportunity for Colorado to learn from others.” 

Turcios said the connection between economic opportunity and health is also emerging as an area of interest among participating states.

As CFI and S2SS continue connecting the research with policymakers and community partners, the Aug. 25 webinar will bring SEED’s findings into public discussion in Colorado. 

The feasibility study does not determine whether Colorado will establish Baby Bonds, but its findings make clear that the long-term value of the investment would depend in part on the financial infrastructure surrounding it. Clear communication, trusted guidance and sustained support would help families and young adults understand, preserve and eventually use those funds in ways that strengthen financial stability and expand future opportunity.

Editor’s note: To register for the upcoming webinar on Aug. 25, visit https://coloradofiscal.org/events. 

Watch the full interview on Empower Media Exchange’s “The Exchange” podcast with Esther Turcios here: https://youtu.be/gUVRBD9WxkY

The final installment in this series will examine the larger policy and fiscal decisions facing Colorado, including the costs and projected outcomes of different program models, potential funding approaches and what would have to happen for Baby Bonds to move from feasibility research toward implementation.