Each year, churches, schools, hospitals, and civic groups award scholarships to local students. Helping these organizations establish a 529 account as the funding vehicle can be a great way to build business relationships in your community. Here are some reasons why this can be a better alternative for local non-profit organizations, which will typically hold these types of accounts at a local bank:

  • Access to investment options including age-based alternatives
  • Can shift the administrative burden over to the 529 provider
  • Establishing a 529 account for a scholarship recipient instead of providing a check can increase the likelihood that the funds will be used as intended by the organization

This strategy cannot only help the financial advisor to uncover larger 529 business opportunities, this is an effective way to network and develop relationships with key local business and community leaders.

Typically, these types of accounts are initially established with the non-profit organization as the owner and no specific beneficiary listed. As scholarships are provided, individual 529 accounts can be established in the name of the recipients.