Michael Dell, Chairman and CEO of Dell Technologies, speaking at the Mobile World Congress 2024 in Barcelona, Spain, on Feb. 27, 2024.
Joan Cros | Nurphoto | Getty Images
Michael and Susan Dell announced Tuesday that they have committed $6.25 billion to fund investment accounts for some 25 million American children.
The couple’s donation will be the largest ever devoted to American children, according to Invest America, a nonprofit advocacy group partnered with the Dells.
“It’s designed to help families feel supported from the start and encourage them to keep saving as their children grow,” Michael Dell, founder and CEO of Dell Technologies, told CNBC in an interview. “We know that when children have accounts like this, they’re much more likely to graduate from high school, from college, buy a home, start a business and less likely to be incarcerated.”
The Dells’ commitment goes hand in hand with a new federal government program that allows parents to open tax-advantaged investment accounts for children under 18 with Social Security numbers. Under the federal program, U.S. citizens born from the beginning of 2025 through 2028 will receive a federal grant of $1,000 to seed those so-called “Trump Accounts.” Parents will be able to open and contribute to these accounts starting on July 4, 2026, with IRS guidance yet to be issued.
The Dells have committed to seed Trump Accounts with $250 for children who are 10 or under who were born before Jan. 1, 2025. According to Invest America, the pledged funds will cover 25 million children age 10 and under in ZIP codes with a median income of $150,000 or less.
“We want to help the children that weren’t part of the government program,” Dell said.
Dell said he first became interested in seeding investment accounts for children after hearing the idea from hedge fund manager Brad Gerstner around 2021. Gerstner, CEO of Altimeter Capital, later founded Invest America, which advocated for the program to get included in the One Big Beautiful Bill Act.
Trump Accounts can only be used to invest in low-cost diversified funds that track a U.S. stock index. Gerstner said these accounts and grants give American children the chance to benefit from U.S. stock market growth at an early age.
Gerstner said it will take more than the $250 from the Dells or $1,000 federal grants for the accounts to compound to a substantial sum. However, Gerstner said the seed money encourages parents to add their own funds.
He added that the legislation makes it far easier for corporations and philanthropists to make charitable contributions on a large scale. Dell Technologies has pledged to match the $1,000 grants by the U.S. Treasury deposited into accounts for new children of employees.
Parents only have to open a Trump Account to automatically receive a grant from the Michael & Susan Dell Foundation.
“It would have been impractical, or maybe even impossible, to impact this many kids in this way without such a program,” Dell said.
There are few precedents for the Dells’ pledge. The foundation of shoe billionaire Harold Alfond, who died in 2007, issues $500 educational grants toward every child born in Maine.
While Trump Accounts are easy to seed, they lack some of the tax advantages of other accounts such as 529 accounts or Roth IRAs. Withdrawals are not allowed until child turns 18, at which point the assets are rolled into an IRA and withdrawals are taxed.
Dell said he has spoken to other major philanthropists and is optimistic that others will also pledge funds to these investment accounts.
“What we hope is that every child sees a future worth saving for it,” he said. “You think about the compounding effect of a program like this in 10, 20, 30 years on millions of children. That’s what gets us excited.”
