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“Invest in every child. Grow America’s future.” This is the slogan for the new Invest America accounts, recently renamed Trump Accounts, under the recent One Big Beautiful Bill. The policy establishes tax-free investment accounts for American children, with funds required to be invested in U.S. equity index funds.
Each account is seeded by the federal government with USD $1,000, beginning with children born in January 2025. Additional annual contributions of up to $5,000 may be made by non-government sources, including employers, family members, friends, and charities. When account holders turn 18, the funds unlock and can be used without restriction, whether for purchasing a home or vehicle, starting a business, or remaining invested in a manner similar to a retirement savings account.
Although framed as a savings policy, Invest America accounts could fundamentally reshape patterns of giving in America.
The annual federal cost for seeding new accounts would be approximately $3.6bn a year, depending on birth rates. In isolation, this is modest relative to other welfare programs: America spends around $126bn a year on the Supplemental Nutrition Assistance Program (SNAP). The scale changes dramatically, however, once private contributions are considered. With an estimated 65m eligible children under 18, Invest America accounts could attract up to $330bn in annual private contributions. This is significant.
While on their face these accounts may look like just another investment vehicle, I believe they carry far-reaching implications for charity and philanthropy in the U.S. and beyond. The key difference is that they allow others to invest directly into individual accounts, creating a large new giving channel for donors who want to make direct cash transfers to children. There has never been a financial transfer mechanism like this in U.S. history.
Billionaires, donors, and the future of philanthropy
Imagine a future in which charities, philanthropists, or everyday donors choose to give cash directly to disadvantaged children in a specific city, region, or state. The financial structure of Invest America accounts is being designed to enable exactly this kind of targeted giving. Supporting children in a direct and visible way is likely to appeal strongly to philanthropists. Moreover, direct cash transfers, rather than funding charities to deliver services, have already shown positive results and have steadily gained traction over the past several decades.
Some philanthropists are already demonstrating how this will work in practice. On December 2, 2025, the Dell family donated $6.25bn to seed accounts for 25m children with $250 each. The donation targets children born before January 1, 2025, who therefore do not qualify for the government’s $1,000 grant. It ranks among the largest private donations ever made directly to Americans, and the Dells have stated that they hope it will inspire similar contributions from other philanthropists and employers.
To qualify for the Dells’ donation, children must live in areas where the median income is lower than $150,000. These criteria were selected by the Dells themselves, which is a key feature of the program. While the law will limit the forms of targeting permitted, donors are expected to be able to specify criteria such as geography, age, participation in existing programmes (such as Medicaid or SNAP), or affiliation with particular institutions, including schools or foster-care systems.
Other wealthy donors are already following suit. Ray Dalio, a hedge fund manager, has committed to contribute $75m in a similar fashion. Dalio has specified, though, that his support will be limited to children in Connecticut, his home state. Although donating solely to one state’s children may seem unfair, the Trump administration has encouraged this approach through what it calls a “50 State Challenge”, framing philanthropic competition as a feature rather than a flaw.
If Invest America gains momentum, as I expect it will, the social prestige associated with these contributions could drive donation volumes much higher. Over time, these accounts could become a significant mechanism through which wealthy Americans redistribute capital directly to the next generation.
This new program comes amid a broader debate about how social welfare should be delivered. Invest America reflects a market-oriented vision in which long-term wellbeing is pursued through participation in capital markets rather than through expanded public services. Critics, particularly on the political left, favour state-led social programs instead. At its core, the tension is not new: it is a disagreement over whether markets, governments, or voluntary charity are best suited to support social welfare.
Brad Gerstner, a venture capitalist and the creator of the Invest America concept, says the accounts are important to “re-energize people’s belief in free market, capitalist democracy” and “include everybody in the upside of the American experiment.” Conveniently for him, though, the accounts will channel massive amounts of capital into U.S. equity index funds, generating steady new demand that is likely to push stock prices higher.
What it means for the charitable sector
While this movement will undoubtedly benefit American children, I am concerned about its impact on existing charitable funding and programs. Once these financial rails are established, giving through Invest America will become virtually frictionless. Although it is possible that this new mechanism will increase overall giving, it is more likely that donors will make tradeoffs.
First, we can anticipate a diversion of funds away from domestic charities, as donors may prefer to give directly to American children, bypassing charitable organizations entirely. Considering that Americans currently donate $593bn annually to charity, the potential $330bn in annual contributions to Invest America accounts is substantial, and a large portion of regular giving could be diverted to this new approach.
Second, some funding is likely to shift away from international causes, as donors opt to keep their contributions within the U.S., aligning with the “America First” approach. Given that American donations internationally total just $35bn annually, even a modest shift toward Invest America could disproportionately threaten these programs. This would likely reduce overall charitable impact, as fewer resources reach contexts where humanitarian needs are far greater, as I have elaborated on in previous chapters (5, 13).
This movement away from charities toward direct giving carries significant implications. The strength of charities is that they actively assess needs, deliver services according to professional standards, and remain accountable for the results they produce. By contrast, when billionaire philanthropists choose recipients at their own discretion, without meaningful oversight, serious questions arise. Who decides which children deserve support? What criteria guide those decisions? And what happens to children who fall outside prestige-friendly or donor-defined categories?
We also need to think about the time frame of the desired outcomes. Invest America accounts promise benefits decades into the future, but people face urgent needs today. The opportunity to donate to these accounts risks nudging donors and policymakers to privilege future potential over present suffering. Investing in financial assets over the long term may reduce vulnerability over time, but it does not relieve harm already occurring. Any shift in charitable funding must therefore confront not only questions of efficiency, but the moral cost of postponing relief for those who cannot wait.
Lessons for Canada
If Invest America becomes a new pillar of American philanthropy, it will shape the moral lens through which we consider how best to support the future of citizens, implying that children, investment, financial assets, and future productivity are the priority. It remains to be seen, however, whether these accounts will actually produce better outcomes than traditional charitable programs.
What should Canadians take from this? Well, as with many U.S. policies, ideas often migrate north. We may one day see something like Invest America in Canada: Invest Canada, perhaps. I think these accounts could provide a lot of positive benefits for Canadians. Canadians also live in a capitalist system, and enabling future generations to participate in the upside of Canadian businesses might help people feel less disenfranchised about our financial system.
And it wouldn’t cost much. With roughly 365,000 births per year, a government seed of CAD $1,500 per child would total just $548m, only 0.1% of federal spending.
While Canadians do already have certain investment accounts for children, such as Registered Education Savings Plans (RESPs), these accounts are neither universal, automatically funded by the government, nor designed for broad wealth-building. Is Canada ready to take on such a bold new approach to addressing social welfare?
The bottom line is that these accounts aren’t a replacement for traditional charitable work, and we don’t yet know if they’ll actually improve long-term outcomes. But watching the U.S. experiment with Invest America gives Canadians a chance to see how something like this might work alongside existing charitable efforts. This program is likely to provide many positive benefits, but it can’t take the place of urgent support that’s needed today. While it will take decades to see its true effects, its impact on charities and today’s urgent needs could be felt long before then.