Letter from BlackRock
At BlackRock, we believe that everyone should have access to a secure financial future. But for so many people, thinking about and planning for the future can be difficult when faced with financial crossroads in the short term. Understanding that protective liquid savings was a precondition to long-term financial security, BlackRock committed $50 million in philanthropic capital in early 2019 to drive systems-level change and achieve tangible impact at scale.1
As part of this commitment, over the past four years, we’ve funded and convened three financial health nonprofits in the United States – Common Cents Lab, Commonwealth, and the Financial Health Network – to design and evaluate the solutions that make it easier for people and households to build a financial safety net.
In this report, we are sharing the lessons learned along the way and the questions that still need answers, so that private sector and public leaders can join us in continuing this important work in reaching millions more families across America.
1BlackRock's support of ESI was provided through grants from The BlackRock Foundation and The BlackRock Charitable Gift Fund, a donor-advised fund at Fidelity Charitable Gift Fund. The public policy activities described in this report were carried out by ESI partners, and The BlackRock Foundation does not engage in lobbying activities or earmark its grant funds for use in lobbying activities.
ESI active savings projects between 2019-2022
people reached with a savings solution through ESI*
saved through ESI savings interventions
*We define reach as an estimate of the number of people eligible for and with access to a savings solution under an ESI project through Dec. 14, 2022.
BlackRock's Emergency Savings Initiative envisioned a world where employers, financial services, and public policy actively support Americans to build a savings cushion. Over the last four years in partnership with Common Cents Lab, Commonwealth, and the Financial Health Network, ESI focused on piloting real-world solutions; conducting research; advancing public policies and thought leadership; and activating media on the issues.
Today, a powerful new constituency of leading employers, payroll and retirement plan providers, financial institutions, and policymakers have come together to prioritize emergency savings for their workers, customers, and constituents. Together, we have:
Shifted critical systems and inspired national conversation
ESI's partners and projects demonstrate that diverse organizations – including employers, financial institutions, and workplace benefits providers – can offer emergency savings solutions. Partnering with recordkeepers and payroll providers that offer savings solutions to many employers has opened the door to reaching tens of millions more workers. BlackRock's ESI also kickstarted the national conversation surrounding emergency savings, inspiring businesses and policymakers alike to champion the financial health of the communities they serve. See the latest news >
More Companies Offer Emergency Savings Option to Workers
Friday, October 7, 2022
Why Momentum is Building for Emergency Savings Accounts
Monday, September 13, 2022
Advanced the understanding of the tools and methods that enable savings
ESI demonstrated the opportunity for payroll companies to expand the value they provide to these workers through our partnership with ADP, which processes pay for 1 in 6 Americans. By enhancing the emergency savings features on the company's Wisely® card and myWisely® mobile app*, ESI and ADP generated dramatic emergency savings growth for a total of $1.55 billion saved.
*With emergency savings features, amounts transferred to your savings envelope will no longer appear in your available balance. You can transfer money from your savings envelope back to your available balance at any time using the myWisely® app mobile app. The Wisely card is a prepaid card, references to digital account are referring to the management and servicing of your prepaid card online digitally or through a mobile app. The Wisely card is not a credit card and does not build credit. The Wisely Pay Visa® is issued by Fifth Third Bank, N.A., Member FDIC or Pathward, N.A., Member FDIC, pursuant to a license from Visa U.S.A. Inc. The Wisely Pay Mastercard® is issued by Fifth Third Bank, N.A., Member FDIC or Pathward, N.A., Member FDIC, pursuant to license by Mastercard International Incorporated. The Wisely Direct Mastercard is issued by Fifth Third Bank, N.A., Member FDIC. ADP is a registered ISO of Fifth Third Bank, N.A., or Pathward, N.A. The Wisely Pay Visa card can be used everywhere Visa debit cards are accepted. Visa and the Visa logo are registered trademarks of Visa International Service Association. The Wisely Pay Mastercard and Wisely Direct Mastercard can be used where debit Mastercard is accepted. Standard text message fees and data rates may apply. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated. ADP, the ADP logo, Wisely, myWisely, and the Wisely logo are registered trademarks of ADP, Inc. Copyright© 2022 ADP, Inc. All rights reserved.
UPS effectively drove awareness of and engagement with the after-tax option of their 401(k) plan for non- union employees, administered by Voya, through a robust, multi- channel communication and intervention program, leading to a 40% increase in participation and $15 million in contributions over a 21-month period.
Watch the video >
Red Tab Foundation (RTF) partnered with ESI and Financial Health Network to review and streamline its six-year-old Red Tab Savers program to make it easier for all eligible Levi Strauss & Co. employees to access and succeed with the program. The revised approach used matched savings followed by prize-linked savings to encourage lower-income employees to participate.
Watch the video >
Demonstrated that emergency savings protects retirement and other forms of long-term savings
ESI's research and work with major partners showed that adding emergency savings can protect long-term savings. Through the program, BlackRock's ESI and its partners learned:
"Having access to the ESI's resources and research has not only helped us to support our clients and their benefits offerings, but it has also helped them to support their employees with their long-term retirement goals. By working together with the ESI to 'lean in' and support the ultimate financial security one can achieve in the short term, we are able to help create positive impacts on shaping everything else related to one's long-term goals."Tom ArmstrongVice President, Customer Analytics & Insight and Head of Voya's Behavioral Finance Institute for Innovation, Voya
Supported policy action
ESI work helped spur policy, including new provisions in SECURE 2.0 federal legislation, which enables workplace-based emergency savings. ESI's research, pilot, and scale projects built a critical mass of evidence that showed a positive relationship between short- term and long-term savings, inspiring policymakers to include provisions for emergency savings in several pieces of retirement security legislation.
"I now have a couple of thousand dollars [in savings] so I'm ready for anything that comes my way. I can't imagine anything that amount coming my way, but [for] new tires or if my car goes out, I think I'm pretty set."Participant in BlackRock's Emergency Savings Initiative
Driving positive change for Americans living on low to moderate incomes
Emergency savings are fundamental to financial health. They can make the difference between successfully navigating unexpected expenses – like a car repair or medical bill – and that same unexpected expense causing long-lasting financial instability.
Americans living on low to moderate incomes are even more likely to be financially insecure, which is why they're also the households that most need emergency savings interventions. Above all, ESI and its partners are committed to making a meaningful difference in their lives by enabling savings habits that lead to long-term financial health.
Insights That Work
"I see [my financial future] getting better and I see five years looking a lot better. I'm very optimistic about it. I'm more aware of spending and saving now."Participant in BlackRock's Emergency Savings Initiative
BlackRock would like to thank the following partners for their participation in the Emergency Savings Initiative.