Circles USA recently released a study of the impact of the phenomenon known as the “cliff effect” on Michigan families. The study was commissioned by Fremont Area Community Foundation in conjunction with Circles Newaygo County, a program of TrueNorth Community Services.

The cliff effect occurs when even a minor increase in a family’s income causes an abrupt loss of eligibility for social safety net programs like food, housing, and child care assistance. The salary increase is often not enough to cover the resulting gap and families end up falling farther behind. To avoid the cliff effect, individuals may stay out of the workforce or turn down raises, promotions, or better-paying jobs. In addition to keeping workers from advancing, the cliff effect can be a barrier to local workforce development as employers struggle to fill positions and retain and promote talent.

The Circles report combines research on the cliff effect with data from Michigan households utilizing public support. The report summarizes the commonly used public support programs in Michigan and offers an overview of efforts undertaken in other states. For example, many states have implemented policy reforms specifically to reduce the cliff effect as it relates to child care assistance.

In addition to research, the report offers several policy recommendations. Recommendations include restructuring programs, adjusting household income limits, and adjusting child care reimbursement rates to reflect market rates for highly-rated daycare providers.

“Social safety net programs are especially important to the more than 40 percent of local workers who have jobs but still struggle to make ends meet each month,” said Carla Roberts, Community Foundation president and CEO. “There is more month than paycheck and safety net programs are critical for those families. Addressing the cliff effect is also crucial to strengthening our local workforce and economy. As we understand more about how the cliff effect works in Michigan, we’re learning more about how we can work together with the community and policymakers to address these challenges.”

To read the full report, click HERE.

Circles USA is a national organization that seeks to engage communities in addressing and reducing poverty. A local chapter, Circles Newaygo County, is funded in part by grants from the Community Foundation.

Kickstart to Career Newaygo County—the local children’s savings account program now in its second year—will be the subject of a study by a University of Michigan research team led by Dr. William Elliott III.

Elliott is a professor of social work at the University of Michigan and is the nation’s leading researcher in the fields of college savings accounts, college debt, and wealth inequality. He has studied similar programs across the country and has written books about student debt and the potential of children’s savings accounts.

“Kickstart to Career is part of a growing movement not only in Michigan but across the country to help families meet education costs and build a culture of college-going within our communities,” said Elliott.

Kickstart to Career was launched in 2018 through a partnership between Fremont Area Community Foundation, ChoiceOne Bank, and local school districts. Kindergartners  receive a deposit-only savings account with $50. They have the opportunity to earn $50 more each year and family and friends can make deposits into a child’s account at any time. Upon high school graduation, the accounts can be used for continuing education and career expenses like tuition, books, supplies, and training. Classroom presentations by ChoiceOne Bank will also help students learn more about saving money, using a bank, credit, and other financial literacy topics.

Research has shown that children who have even a small savings account have higher expectations of their own futures and increased likelihood of enrollment and completion of college and career training. The idea of a child savings account program was especially compelling to the Community Foundation because research has also shown that adults who had savings accounts as children have improved financial literacy, higher levels of savings, and even healthier credit.

“The tool is a children’s savings account, but it’s much more than that,” said Carla Roberts, Community Foundation president and CEO. “It prepares students to be financially healthy as adults and encourages kids to dream, plan, and save for their futures. We believe that will transform the culture of the whole community as well. We’re excited for the University of Michigan team to focus their research on our program and measure its impact. The research being done here can help other communities exploring the idea of children’s savings accounts.”

The research project is expected to include academic, social, and emotional development connected to Kickstart to Career over a four-year period. The first surveys were distributed to parents this fall .

For more information about Kickstart to Career, visit or call the Community Foundation at 231.924.5350.