Michael and Susan Dell to donate $6.25 billion to fund ‘Trump accounts’ for 25 million U.S. kids
- Michael Dell and his wife Susan have committed $6.25 billion to fund investment accounts for millions of U.S. children.
- The pledge will seed tax-advantaged “Trump accounts” for children too old to qualify for grants that are set to come from the U.S. Treasury.
- The billionaire CEO of Dell Technologies told CNBC he first heard of the idea of seeding accounts from hedge fund manager Brad Gerstner.
Michael and Susan Dell announced Tuesday that they have committed $6.25 billion to fund investment accounts for some 25 million American children.
The couple’s donation will be the largest ever devoted to American children, according to Invest America, a nonprofit advocacy group partnered with the Dells.
“It’s designed to help families feel supported from the start and encourage them to keep saving as their children grow,” Michael Dell, founder and CEO of Dell Technologies
, told CNBC in an interview. “We know that when children have accounts like this, they’re much more likely to graduate from high school, from college, buy a home, start a business and less likely to be incarcerated.”
The Dells’ commitment goes hand in hand with a new federal government program that allows parents to open tax-advantaged investment accounts for children under 18 with Social Security numbers. Under the federal program, U.S. citizens born from the beginning of 2025 through 2028 will receive a federal grant of $1,000 to seed those so-called Trump accounts. Parents will be able to open and contribute to these accounts starting on July 4, 2026, with IRS guidance yet to be issued.
The Dells have committed to seed Trump accounts with $250 for children who are 10 or under who were born before Jan. 1, 2025. According to Invest America, the pledged funds will cover 25 million children age 10 and under in ZIP codes with a median income of $150,000 or less.
“We want to help the children that weren’t part of the government program,” Dell said.
Dell said he first became interested in seeding investment accounts for children after hearing the idea from hedge fund manager Brad Gerstner around 2021. Gerstner, CEO of Altimeter Capital, later founded Invest America, which advocated for the program to get included in the One Big Beautiful Bill Act.
Trump Accounts can only be used to invest in low-cost diversified funds that track a U.S. stock index. Gerstner said these accounts and grants give American children the chance to benefit from U.S. stock market growth at an early age.
Gerstner said it will take more than the $250 from the Dells or $1,000 federal grants for the accounts to compound to a substantial sum. However, Gerstner said the seed money encourages parents to add their own funds.
He added that the legislation makes it far easier for corporations and philanthropists to make charitable contributions on a large scale. Dell Technologies has pledged to match the $1,000 grants by the U.S. Treasury deposited into accounts for new children of employees.
Parents only have to open a Trump account to automatically receive a grant from the Michael & Susan Dell Foundation.
“It would have been impractical, or maybe even impossible, to impact this many kids in this way without such a program,” Dell said.
There are few precedents for the Dells’ pledge. The foundation of shoe billionaire Harold Alfond, who died in 2007, issues $500 educational grants toward every child born in Maine.
While Trump accounts are easy to seed, they lack some of the tax advantages of other accounts such as 529 accounts or Roth IRAs. Withdrawals are not allowed until the child turns 18, at which point the assets are rolled into an IRA and withdrawals are taxed.
Dell said he has spoken to other major philanthropists and is optimistic that others will also pledge funds to these investment accounts.
“What we hope is that every child sees a future worth saving for it,” he said. “You think about the compounding effect of a program like this in 10, 20, 30 years on millions of children. That’s what gets us excited.
- The Michael & Susan Dell Foundation is partnering with Invest America to provide $6.25 billion in investment accounts for 25 million American children.
- Their contribution expands Invest America’s original plan by giving $250 to every eligible child under 10 in lower-income ZIP codes, with potential expansion if funds remain.
- These accounts aim to give children long-term financial momentum, with contributions allowed from families and communities and withdrawals permitted at age 18 for education, housing, or business needs.
The Michael & Susan Dell Foundation is partnering with Invest America to expand newly approved savings accounts for American children.
In an announcement on Tuesday, the founder and CEO of Dell Technologies, Michael Dell, and his wife pledged $6.25 billion in investment accounts for 25 million American children.
This investment piggybacks off Invest America’s original plan, which will provide all children born between Jan. 1, 2025, and Dec. 31, 2028, a tax-deferred savings account with $1,000 provided by the government.
Now, with the Dells’ contribution, the first 25 million American children to sign up for the accounts who are under 10 years old — who were born before Jan. 1, 2025, and live in ZIP codes with median incomes of $150,000 or less — will receive $250.
If money from the $6.25 billion remains after initial deposits, the Dells say they will open up the deposits to children older than 10.
These new savings accounts represent “the power of collective action,” the Dells wrote in their announcement. “This is not just about what one couple or one foundation or one company can do. It is about what becomes possible when families, employers, philanthropists, and communities all join together to create something transformative.”
Loved ones, employers, local programs and communities can also contribute to the accounts, up to $5,000 a year.
No comments:
Post a Comment