I got my first, “Hey, what should I get the kids for Christmas this year?” from a relative, but do we really need more stuff? American families get mountains of Legos and video games when they could instead use a hand-up towards more important goals. Incredibly, over a third of Americans went into debt to give gifts last year. Yet the holidays are the perfect time to ask for a “college donation” rather than material gifts. Still, it can be socially challenging to ask Mom, “Hey, how about some money instead of those Pokémon cards?” As a result, you end up with a pile of plastic toys and no further along towards funding future college expenses.
Is It Even Worth Asking?
A couple years ago I published an article about the importance of giving towards college during the holidays. It was also the first year I decided to practice what I preached, and nervously asked some family members to consider donating to our triplets’ 529 accounts in lieu of gifts. I thought maybe my kids would end up with an extra hundred bucks at most, but was shocked to find several thousand in contributions from loved ones, for which we are immensely grateful. You just never know unless you ask, and you should ask!
You won’t be alone, either. Research from the CSF (College Savings Foundation) found that nearly half of parents with accounts will ask for contributions to their 529 plans this year. CSF Chair Vivian Tsai stated, “As the holiday season approaches, the convenience of online gifting programs will help families engage their friends and networks in setting and achieving education and career goals for their children.”
The Best Way To Ask For College Savings Gifts
There are many ways to give money to help a loved one, but when it’s for college the easiest, safest, least-expensive, and most efficient method is to gift the money directly via a 529 account for the beneficiary and, if possible, to do so using that plan’s respective gifting platform. Over 45 plans have a gifting platform and, for those that don’t, there are alternatives available. Using the 529 plan as a gifting intermediary provides assurance to the giver that funds will be used for their intended purpose. Contact your 529 plan provider to ask how their gifting platform works.
You don’t have to open your own 529 account to give. You might consider a 529 gift card via Gift of College. Gift cards can be given whether a 529 exists or not and used to fund a 529 account. “A college education with little or no debt is achievable with advanced planning, consistent investing and a little help from one’s friends and family,” said Gift of College CEO Wayne Weber. Cards are available at stores like CVS nationally as well as online.
A note of caution that there tends to be a revolving cast of third-party 529 gifting aggregators and crowdfunding platforms. Many charge fees, those charges can be opaque, and their relationships with 529 providers can be uneven at best and nonexistent at worst. The turnover of these providers has been high over the years, as well. As a result, it is important to use caution with third-party gifting firms, especially those with a short track record.
How 529 Account Owners Can Ask Family To Give
Sending an email is your best bet when it comes to asking for college fund contributions from loved ones. Asking in-person can feel confrontational and general messaging via social media can be impersonal. Draft a message that is specific to the recipient, reference a special memory, and define the benefit of giving. For example:
“Hello Mimi! Liam had an amazing time with you this summer, and still talks about those cookies you made together. Christmas is coming and you might be wondering about gifts. We’ve been talking about what he might like to be when he grows up, and he was excited about becoming an architect. We could use some help realizing his dream. Consider giving directly to his college savings account this year in lieu of gifts. If you really want to get him something to open, maybe a smaller present that’s architecture-related to go with the contribution? I promise he’ll appreciate it!”
If you’re doing a direct email to loved ones and have a tough time composing your thoughts there’s good news: There is no shame in copying. If someone else has great language that applies to your situation, why reinvent the wheel? Below is messaging that is short, direct, provides a clear gifting request for recipients, and instructions on how to give. Note that these particular directions are specific to the UGift platform used by Ascensus, the largest administrator of 529 plans in the country. You will want to contact your 529 provider for guidance specific to their gifting platform.
Good morning/afternoon [relative name]:
I got my first question about, “What can I get for the kids?” from a relative this year. We appreciate your gifts, but if you would like to contribute to their 529 college savings account in lieu of a physical present – or maybe alongside a smaller gift – it would make a real difference to our family. You can do so by following these instructions:
- Go to ugift529.com
- Enter the code for [the child you want to give to] here: [insert code here]
- Enter your name and the amount of the gift
- Make your gift via EFT (electronic funds transfer) or check
Thank you in advance for considering helping our family fund [child’s name]’s future college!
Be sure to double-check your directions and ensure they work by testing it yourself using an incognito browser window or working with a friend.
Making Your Gift “Ask” More Effective
Asking for money is most effective when it is specific and offers the giver a clear benefit. “The kids could use money for college” is not as effective as, “Click this link to donate directly to the kids’ college accounts.” You could ask relatives to give with cash or sending money using a service like Venmo, but these tend to be less successful. It’s easier to give when you have reasonable assurance that the money is going towards its intended purpose, which is where a dedicated account like a 529 plan comes in.
Avoid negative language such as, “We have enough Legos,” even if it’s true. Use positive language such as, “Olivia really wants to study to be a Nuclear Physicist at MIT, and you can help!” Create a clear vision of the future to which they will be contributing, and remind them of the person that they’re helping.
“Long after that plastic toy from the holidays is broken, higher education savings gifts teach children about the value of long-term goals and the satisfaction of achieving them,” said Tsai. So do your family a favor and take time to ask for support for college savings this holiday season.