In 2023, Connecticut became a national leader when it launched its “baby bonds” program, an experiment that seeks to help vulnerable communities and close the state’s racial wealth gap.

Two years later, advocates in New Haven hope to take another nation-leading step in the state’s effort to create wealth in marginalized communities, by launching a pilot program that will test what happens when the first baby bond recipients turn 18.

Supporters gathered at the Connecticut Center for Arts and Technology on Wednesday for the launch of the Wealth Accelerator, a program that aims to test new approaches to wealth building and economic justice. The ultimate goal of the initiative, supporters say, is to promote economic equity in Connecticut.  

“We want to see intergenerational wealth transfers come from this work,” said Yaw Owusu-Boahen, the Accelerator’s inaugural director. 

The accelerator employs strategies similar to the tech industry, focusing on a model that Owusu-Boahen described as “ideation, incubation and scale,” and will formally start its first program, called “Cash Catalyst,” in August. 

The Cash Catalyst program will serve as the nation’s first “accelerated baby bonds” program, giving financial education and over $500,000 in direct cash to participants between the ages of 18 and 30. Those are the same ages that Connecticut baby bonds participants will be when they are allowed to access their money. 

The effort will stick closely to the conditions laid out in the state’s baby bonds program in the hopes of providing insights into future distributions. By tracking the outcomes and headwinds participants face, the program should offer valuable data as other states — and the federal government — consider similar investment programs. 

The Cash Catalyst program could also have immediate economic impacts in New Haven. Advocates anticipate the money, given directly to participants, will help more people in the region start down the path toward economic stability.

“We’re going to prove that building wealth in Black and brown communities, in low income communities, in historically excluded communities, is not only possible, it’s necessary,” said Karen DuBois-Walton, the president and CEO of the Community Foundation for Greater New Haven, and a member of the Wealth Accelerator’s steering committee. 

A $564,000 test

The Cash Catalyst program will provide a close simulation of the state’s baby bonds initiative, which was first launched on July 1, 2023. Babies born to households enrolled in the state’s Medicaid program, HUSKY, on or after that date receive $3,200 in an investment account.

Over time, that money will grow, and when recipients are between ages 18 and 30, they’ll be able to withdraw from their accounts. The money may then be put toward a variety of approved expenses, including starting a business, making a down payment on a home, paying for college, or making other financial investments.  

To model what this distribution — which will begin when the first baby bonds recipients turn 18 in 2041 — will look like, the cash catalyst program will also focus on giving money to people between the ages of 18 and 30. Eighty-two participants have been selected for the program, each will receive $2,000 to pay off debts, start a savings account or make other investments.

In addition, 20 of the participants will be randomly selected to receive a separate $20,000 “cash injection” that will be subject to the same spending requirements as the baby bonds. 

In total, the pilot program is expected to distribute $564,000 to participants. The money has been provided with the support of M&T Bank, Edward Jones and the Connecticut Project. Other local and national partners provided additional research and planning support. 

By structuring the program in this way, Owusu-Boahen explained in an interview, the program aims to show how the future baby bonds participants might spend the invested money.

The program will also include a financial education component. Prior to receiving any money, all participants will go through a series of eight financial literacy classes that will teach skills like budgeting, investing, and long-term financial planning. They will also have sustained access to MoneyByrd, a financial planning app that will help them maintain the skills taught during the program. 

“We want folks to come through the program to walk away feeling more confident about their finances,” Owusu-Boahen said. 

Each participant has been selected after completing a workforce development or educational program or other training provided by the Connecticut Center for Arts and Technology (ConnCAT). The program will release the first round of funds, the $2,000 payments, later this year. Those selected for the $20,000 payment will receive the money in two installments, the first half will be distributed in January 2026, and the second in January 2027. 

‘We are doing this work for those who have yet to be born’

At the launch event, speakers noted that the pilot program could help reverse historic inequities in New Haven and the state more broadly. 

“When communities are in the driver’s seat, when they’re truly heard, meaningful and lasting change becomes possible,” said Arden Santana, the chair of the Wealth Accelerator’s 10-member resident council, a group of community advisors who will support the program and provide insights from the area. 

The pilot program comes as baby bonds initiatives receive national attention, and as the Trump administration is pushing its own version of the concept. Known as “Trump Accounts” that proposal would give newborns a $1,000 savings account from the federal government that parents could add money to over time. There are no income restrictions on entering the program, and children born between 2025 and the end of 2028 would be eligible. 

But that proposal, which comes after years of more targeted baby bonds initiatives failing at the federal level, has faced criticism for likely helping wealthier families more than poorer ones, making it unlikely to have an effect on the wealth gap. 

In Connecticut, supporters of baby bonds stressed the importance of focusing on disadvantaged groups. 

“I know the sting of poverty, I know the psychic pain of poverty, and I know what it does to one’s confidence,” said Erik Clemons, the founding CEO of ConnCAT and the Connecticut Community Outreach and Revitalization Program. “We are doing this work for those who have yet to be born.” 

Owusu-Boahen said the Cash Catalyst program will have at least one more cohort in the future, this one pulling from neighborhoods beyond New Haven in the hopes of understanding different conditions in the state. He hopes the pilot will provide insights that will help across the country, encouraging other states and communities to develop their own baby bonds initiatives.

In the coming months, the Wealth Accelerator will look toward finding new programs it can launch, all aimed at pulling communities out of poverty.

“As an institution, we’re saying you matter,” Owusu-Boahen said. “You’ve been historically excluded. You’ve been historically not given opportunities. This is us giving you that opportunity and validating that you can do it — you can build wealth, you can change your economic circumstances.”