BlackRock’s Emergency Savings Initiative creates custom solutions for employers and financial services institutions of all sizes to make access to savings easier for over 10 million Americans, addressing a critical gap in the US savings system
Over the past four years, BlackRock has provided $30 million in philanthropic support to financial health non-profits to help build emergency savings initiatives, resulting in over $2 billion in savings for everyday Americans
NEW YORK, June 09, 2023--(BUSINESS WIRE)--Today, BlackRock’s Emergency Savings Initiative announced that, through partnerships fueled by $30 million in philanthropic capital, the program has helped build over $2 billion dollars in net new savings for the program’s participants and made breakthrough short-term savings solutions possible for over 10 million Americans who participate in programs conducted by BlackRock’s non-profit partners.
Research shows that when people have the right tools and opportunities, they are better able to set aside money for the future. BlackRock’s Social Impact team and nonprofit organizations Common Cents Lab, Commonwealth, and the Financial Health Network partnered with over 40 employers and financial institutions including ADP, AutoNation, Best Buy, Levi’s, MasterCard, and Voya Financial, among others to build custom and flexible solutions to help millions access savings at an unprecedented scale.
"BlackRock's Emergency Savings Initiative couldn't be a clearer expression of the firm's purpose to help more people experience financial well-being -- it is another way BlackRock is helping everyday Americans achieve financial security," said Mark McCombe, Vice Chairman at BlackRock. "Although the savings initiative began in 2019, COVID made the project even more urgent as a record number of people lost their jobs, and those who did not have short-term savings set aside or quickly depleted them had to dip into their long-term savings to weather the downturn. That coupled with today’s inflationary economy is forcing too many to get by with less."
By supporting employers to create short-term savings solutions for employees, BlackRock’s Emergency Savings Initiative has helped decreased chronic financial stress among workers – stress that could cost employers $250 billion a year in reduced productivity.1
Partnering with employers
Three examples of the Emergency Savings Initiative in action with employers include:
Supporting Levi Strauss & Co.'s Red Tab Foundation (NYSE: LEVI) to update and streamline its Red Tab Savers program contributing to a roughly 27% increase in participation from its US retail workforce.
Working with Best Buy (NYSE: BBY) and its credit union partner, Wings Financial, to drive awareness and utilization of its customized Savings Builder Program, with more than 1,300 employees opening an account under the program.
Partnering with AutoNation Inc (NYSE: AN) to develop a first of its kind multi-solution benefit for workers that can help meet the liquidity needs of its diverse workforce.
Commenting on the initiative, Marc Cannon, EVP and Chief Customer Experience Officer, AutoNation said, "Our organization is acutely aware of the important role that an emergency savings program can play in an employee’s overall financial security. At the same time, the needs of our diverse workforce are varied. Collaborating with BlackRock and Commonwealth on a multi-pronged solution was key to offering our employees financial wellness benefits to meet their savings needs – whether through a payroll split deposit, an emergency savings envelope on their paycard, or an emergency savings account through our retirement provider."
Partnering with financial service institutions
In addition to partnering with employers, BlackRock’s approach to improving the savings system at large centered on partnering with infrastructure players like recordkeepers, payroll providers, and workplace banking providers that serve thousands of different organizations. In this way, lessons learned from the Emergency Savings Initiative’s 40+ projects could be more easily replicated and scaled for employers and others who need readily available savings solutions.
Highlights of the work with these one-to-many players include:
Partnering with Automatic Data Processing Inc (NASDAQ: ADP), which processes payroll for 1 in 6 Americans, the Emergency Savings Initiative enhanced savings features through one of the company’s mobile apps, generating a total of $1.55 billion saved.2 See full case study here.
Working with Truist (NYSE: TFC), a top 10 financial institution, the Emergency Savings Initiative helped motivate 25,000 households to open new savings accounts, accumulating $37 million in balances over a six-month pilot by creating a "Start, Save, Win!" sweepstakes program and offering monthly prizes for saving.3 See full case study here.
Collaborating with Varo Bank to design a time-commitment prompt within Varo’s paycheck savings program "Save Your Pay," with 8,181 Varo users using Save Your Pay for a combined average monthly savings increase of $2.56M.
Supporting Mastercard Inc (NYSE: MA) to test multiple emergency savings features with its infrastructure partners. One test with Virginia Credit Union, using its Cash Back Mastercard, doubled the number of cardholders by redesigning the redemption portal to make cash savings the default option.4
The critical link between short term savings and retirement goals
Ultimately, access to liquid savings is crucial for keeping people on track for long-term retirement goals. The program has also advanced the industry’s understanding of the nexus between retirement savings and emergency savings.
In one survey funded by the program, researchers found that respondents with less than $2,000 in easily withdrawn savings were twice as likely to have tapped into their retirement plan accounts during the pandemic. And those with emergency savings were 70% more likely to contribute to their retirement plan.5
"Having access to the Emergency Savings Initiative’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, said Tom Armstrong, VP, Customer Analytics & Insight and Head of Voya’s Behavioral Finance Institute for Innovation, Voya Financial. By working with the initiative 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."
Read more about the Emergency Savings Initiative custom solutions and BlackRock’s philanthropic program here.
About BlackRock’s Emergency Savings Initiative
In 2019 BlackRock announced a $50 million philanthropic commitment to help millions of people living on low -to-moderate incomes gain access to and increase usage of proven savings strategies and tools – ultimately helping them establish an important safety net. BlackRock’s support of this initiative was provided through grants from The BlackRock Foundation and The BlackRock Charitable Gift Fund. The size and scale of the savings problem requires the knowledge and expertise of established industry experts that are recognized leaders in savings research and interventions on an individual and corporate level. Led by its Social Impact team, BlackRock is partnering with innovative industry experts Common Cents Lab, Commonwealth, and the Financial Health Network to give the initiative a comprehensive and multilayered approach to address the savings crisis.
1 Inside Employees’ Minds Financial Wellness Volume 2, Mercer.
2 "How ADP’s Solution Facilitated $1.5 Billion in Emergency Savings," Commonwealth, December 2022.
3 "How Truist Used Prize-Based Incentives to Generate $37 Million in Savings," Commonwealth, October 2022.
4 Allison White & Stefan Ragnarsson, "Case Study: Credit Card Rewards as an Opportunity to Build Savings," Common Cents Lab, July 2021.
5 "Financial Stress Through a Crisis: Supporting LMI Plan Participants to Build Long-Term Financial Security," Warren Cormier, DCIIA; Nick Maynard, Sylvia Brown, and Justin Flattery, Commonwealth https://buildcommonwealth.org/blog/financial-stress-through-a-crisis/
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