- 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
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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version on businesswire.com: https://www.businesswire.com/news/home/20230609005057/en/
Media Relations Ashley Beale 347-867-5944
ashley.beale@blackrock.com
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