529s are kind of like a Kickstarter for getting college cash

Online gifting components added.

People have used crowdfunding sites to raise money for business ideas, help afford medical emergencies and even to pay for vacations. Now the concept is coming to college savings.

More 529 plans, the accounts that give families a way to put away cash for college, are adding crowdfunding-like tools that make it easier for savers to ask family and friends to contribute to a kid’s college fund. Account holders can create webpages and share the links on Facebook, Twitter or in emails. Some parents have asked for cash contributions as birthday gifts instead of toys. Others have used them to boost the savings of a child who lost a parent. Money is withdrawn from the gift giver’s checking account and goes directly into the 529. There are no fees for the service.

Among the 49 states that sponsor 529 plans, more than half have at least one plan that offer some kind of online gifting tool. Those in the industry say they expect more to add the service.

Operators of 529 plans say savers have long wanted an easier way to receive gifts into their accounts. But plan operators have been slow to offer online gifting because of the costs and difficulty that comes with developing a system that accepts online payments into accounts. Giving to a 529 plan with a paper check can be a pain: Gift givers sometimes need to print out a certificate, ask for an account number and then drop it all in a mailbox.

“People don’t want to send checks,” says Mary Morris, the CEO of Virginia529.

Morris says Virginia529’s online gifting platform grew quickly after it launched in late May. About 1,200 accounts received cash gifts in the three weeks after it went live. The average gift was $900, probably as graduation gifts, says Morris.

Fidelity, which manages four state-sponsored 529s, says more than $15 million poured into its plans through its crowdfunding tool since it launched about three years ago. Customers can upload a picture of their kid on their personal page, add the year they will enter college and what their dreams are for the future.

Laima Widmer used Fidelity’s tool after her husband passed away in March from cancer. People called her friends asking what they could do to help. One friend suggested Widmer open 529 plans for her two teenage daughters and create personalized pages where people could contribute. Links were shared on social media and on a blog Widmer wrote to keep followers updated on her husband’s condition. Each of the 529 plans received about $12,000 in gifts. Widmer, who lives near Richmond, Va., says the contributions will help ensure her kids will have some money for college.