NEW YORK (AP) — Billionaires Michael and Susan Dell pledged $6.25 billion Tuesday to provide an incentive for 25 million American children under 10 to claim the new investment accounts for children created as part of President Donald Trump’s tax and spending legislation.
The historic gift is hardly unprecedented, with few single charitable commitments in the past 25 years exceeding $1 billion, much less multiple billions. Announced on GivingTuesday, the Dells believe it is the largest single private commitment made to American children.
It is also unusual in that it will operate through investment accounts established by the US Treasury Department that will be managed by private companies. Called “Trum Accounts,” the program has not yet been launched but was passed into law on July 4 as part of the president’s signature legislation.
“We believe that if every child can see a future worth saving for, this program will build something much bigger than an account. It will build hope and opportunity and prosperity for generations to come,” said Michael Dell, the founder and CEO of Dell Technologies whose estimated net worth is $148 billion, according to Forbes.
Through their gift, the Dells will deposit $250 into the investment account of each qualified child, which they said the Treasury plans to launch on July 4, 2026. The Dells said they wanted to mark the 250th anniversary of the independence of the United States.
“We want these kids to know that not only do their families care, but their communities care, their government, their country cares about them,” said Susan Dell. “And we are all supporting them to have a wonderful future, a beautiful future, and that this is available to them.”
According to the new law, the Treasury will deposit $1,000 in the accounts of children born between January 1, 2025 and December 31, 2028 and the funds must be invested in an index fund, which tracks the general stock market. But it will be up to the families of other children to put the money into the accounts. When the children turn 18, they can withdraw the funds to put towards their education, to buy a house or to start a business.
The Dell hope that their gift will encourage families to ask for the accounts and deposit more money in it, even small amounts, so it will grow over time along with the Stock Exchange. They also hope that other companies and philanthropists will donate to these accounts.
“It is difficult to give effective dollars away at scale, particularly to the most needy children of the country in a way that you have confidence that those dollars will join the head of the American economy,” Brad Gerstner, a venture capitalist, who advocated the passage of this legislation. “And therefore, this is a unique platform that is being created by the government that I think can open large grants.”
Gerstner is also the founder of the Invest America Charitable Foundation, which is supporting the Treasury in launching the accounts. He said that the purpose of the accounts is to give funds to young people to jumpstart their lives but also to help them benefit from the growth of the American economy through investment in stocks.
“Fundamentally, we need to include everyone at the top of the American experiment. Otherwise, it won’t last. And so, at its core, we think it can re-invigorate people’s belief in the free market, capitalist democracy,” Gerstner said of the bills.
About 58% of US households owned stocks or bonds in 2022, according to the US Securities and Exchange Commission, although the richest 1% owned almost half the value of stocks in that same year and the bottom 50% owned about 1% of stocks.
In 2024, about 13% of children and youth in the United States lived in poverty, according to the Annie E. Casey Foundation, and experts link the high rates of child poverty to the lack of social support for new parents, such as paid parental leave.
The Dells will put money into the accounts of children living in ZIP codes with a median household income of $150,000 or less.
While funds in Trump Accounts can help young adults whose families or employers can contribute to them over time, they will not immediately help reduce childhood poverty. Cuts to Medicaid, food stamps and child care that were also included in the spending package are likely to reduce support for children from low-income families.
Ray Boshara, a senior policy advisor with both the Aspen Institute and Washington University in St. Louis, said he is excited by the idea that Trump Accounts will be able to receive contributions from the business, philanthropic and government sectors.
“We would like to see this idea continue and improve over time, like any great policy,” said Boshara, who co-edited the book “The Future of Building Wealth.” “The ACA, Social Security – they start out pretty flawed, but over time they get much better and more progressive and inclusive. And that’s how we think about Trump Accounts. It’s a down payment on a great idea that deserves improvement and there’s bipartisan interest in improving them.”
Through the Michael & Susan Dell Foundation, the Dells have reported giving $2.9 billion since 1999, with a major focus on education.
Michael Dell said that initially they had not thought to commit so much to boost the children’s investment accounts, but Susan Dell said over time, they decided to increase the size of their commitment.
“We’re thrilled to be leading this in the philanthropy sector and we’re so excited because we know more people are going to jump on board because really, we can’t think of a better idea and a better way to help America’s children,” she said.
___
Associated Press coverage of philanthropy and nonprofits receives support through the AP’s collaboration with The Conversation US, with funding from the Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.
