Crowdfunding Gifts To Your Baby’s 529 College Fund

Crowdfunding and crowdsourcing have become more and more prominent in today’s society. 

Startups are using Kickstarter to crowdfund their initial investments.  Many major companies crowdsource innovation by posting open challenges for the smartest folks in the world to solve.  Netflix and Pandora crowdsource reviews for movies and music so they can make recommendations on what specific users will most likely enjoy. 

Even Snapchat and Facebook are crowdsourcing boots-on-the-ground “news” through event stories and Facebook Live.

While it is not exactly a novel concept, using your baby’s college fund to crowdfund college tuition is also becoming more popular. 

College Fund Gifts At Your Baby Shower

Setting up your baby’s 529 college savings plan is one of the best ways to save for your child’s future.  With student loans wreaking so much havoc on today’s recent college graduates, many new parents are deciding to not pay this “family heirloom” forward. 

A great time to ask for gifts for your child’s college fund is at your baby shower.  Helping with your child’s education costs is one of the only financial goals that friends are willing to contribute to, so you might as well take advantage of that fact while your friends are feeling most generous.   

Including the college fund in your baby shower can be a great way to get gift contributions

Getting college fund gifts from friends and family can amplify your own contributions.  However, for those parents that aren’t quite ready to contribute to their child’s college fund consistently – maybe because they are still paying their own college off – crowdsourcing gift contributions can allow you to still take full advantage of your limited years of compounding investment growth.

College fund gifts allow parents to save for their baby’s college while paying their student loans

Do Parents Want College Fund Gifts?

Sallie Mae reports in its How America Pays For College 2020 report that millennial parents are “significantly more willing to engage people outside of the immediate family to help contribute to their children’s college fund.”  Sixty-three percent of millennials are willing to do so, compared to 41% of Gen Xers and 33% of Baby Boomers.

63% of millennials are willing to ask non-family members to contribute gifts to their child’s college fund 

Many parents that we’ve spoken with, especially parents of younger children, have grown tired of getting more “crap” (yes, that’s the actual word that most of them have used) for their child on every birthday or holiday. 

According to these parents, the gifts wind up laying around next to all of last years ne’er-to-be-used again presents and clutter the house.  In addition, according to Fidelity’s 2016 report on holiday gifting, most toys lose their value to children within six months of receiving them.

The 2016 Fidelity report indicated that the average child receives $658 worth of gifts from friends and family during the holidays.  In addition, the report revealed that parents would prefer that 35% of the $658, or $230, go towards college savings.

Parents would prefer that 35% of their children’s Christmas toys be traded for gifts to their 529 plans

Eighteen years of these holiday college gift contributions could grow to around $8,000 by the time the child graduates high school.  According to Sallie Mae’s survey data, the average family has between $20,000 and $30,000 saved for college by the time their child graduates high school.  An extra $8,000 would amount to a 25% – 40% increase, just by preventing some clutter in the house.

Trading Christmas toys for gifts to the college fund could increase total 529 savings by 25% to 40%

Do Relatives Want To Give Gifts To 529 Plans?

Grandparents have long been supporters of their grandchildren’s college.  Ninety percent of grandparents in a 2014 Fidelity survey indicated that “they’d be likely to make a gift to college savings for special occasions instead of giving other presents if asked by their adult children or grandchildren.”

90% of grandparents would be willing to gift college savings over other presents on special occasions

Do Friends Want To Give College Fund Gifts?

Parents and grandparents aren’t the only ones supportive of college gifting on birthdays and holidays. 

Remember all the headlines about millennials valuing experiences over possessions?  Gift givers who appreciate experiences also get more value out of giving experiences. 

Wedding registries like the knot have capitalized on this by including honeymoon funds, where friends and family can contribute to a couple’s honeymoon massage, beach dinner, etc. 

When you think about it, college is one of the most impactful experiences that one may go through in their life.  Four years away from home at a university full of potential lifelong friends, countless once-in-a-lifetime experiences, and an incubator to become the young adult that will shape a student’s life going forward – that’s tough to beat as far as experiences go.

College is one of the most impactful experience gifts that friends can give to a loved one


Even for those who don’t geek out over giving the experience of college, the convenience of not having to put thought into a gift but still showing that you care greatly about the recipient is golden.  Have you ever had a friend or relative hit the gift card rack at a grocery store, finishing their holiday gift shopping in a matter of minutes?  Guilty. 

Imagine if you received a “college savings gift card” rather than a gift card to that restaurant you will probably never go to.  The gift giver would seem very thoughtful, not very lazy.

College fund gifts are simple yet thoughtful gifts for special occasions

The Impact of College Fund Gifts

Increased savings resulting from creating a baby fund for college has two very important benefits. 

Saving “enough” for college will make sure that your child’s options are not limited by finances.  According to the many conversations we’ve had with college counselors at high schools, waiting to plan for the cost of college until your child is a junior in high school can often impact the institution that your child is able to attend, eliminating some of the higher tier universities even though your child has been accepted. 

Saving can also have a ten-year benefit after your child exits college.  An extra $230 of gift money saved each year could decrease your student’s annual loan payments by over $1,000, or over $80 a month.  That can create quite a bit a breathing room for your recent graduate.

$230 in college gifts each year can reduce your child’s annual student loan payments by over $1,000

As stated previously, saving for college is one of the only social financial goals.  Most would not feel strongly about contributing to anybody’s retirement fund.  Honeymoons are one of the new exceptions, but imagine if you were asked to contribute to the cost of somebody’s wedding?! 

Millennial parents can take advantage of the social nature of their kid’s college fund by incorporating crowdfunding tools that make it easier for others to contribute on birthdays and holidays.  There are several technology services that attempt to make crowdfunding for education simple. 

Finding the one that integrates best with your education savings account and is most convenient for your friends and family can not only increase your total college savings, but can also make the process of finding the best education savings account much easier!


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