The best gift any of us can give to babies is to point their sleep-deprived parents in the direction of a good 529 or other college savings plan, then seed the account with a little money.
It was hard to avoid this conclusion in the midst of a recent baby boom among The New York Times money writers. Tara Siegel Bernard, a personal finance reporter, recently delivered her first child, and Paul Sullivan, the "Wealth Matters" columnist, welcomed his second.
I wanted to get both babies a little something, but knowing what I know about how much four years of college will cost, I couldn't in good conscience send a stuffed animal or a security blanket.
You would think that the state-sponsored 529 plans around the country would be welcoming givers like me who want to take this sort of initiative. But the process of tossing some money into an account is not as easy as it could, or should, be.
The hassles have given rise to several registry services that let you use credit cards to pay for a 529 gift and spare you the need to contact the plans or the parents.
Recently, however, the industry group that represents 529 plans and the companies that serve them raised questions about whether the startups were violating securities laws.
Why would they do such a thing, when the services seek only to collect assets to deliver to the 529 funds on a silver platter? To figure out the answer, it helps to start with a bit of refresher on how the 529 plans work.
Anyone can open an account, for themselves or someone else. States run the plans, and you can set up an investment account that allows you to choose among various mutual funds.
Money in these accounts grows tax-free, and you can withdraw it without paying any capital gains taxes as long as it's used for educational expenses. Moreover, the majority of states offer income tax deductions or credits when people deposit money.
This is all nice and will become more so if our tax rates rise in the next decade or two. Plus, the earlier you start, the more the money has time to grow (and the more you save on taxes).
So parents, forget about the fancy layette sets. Open a 529 account and register for cash gifts. Upromise offers a service called Ugift in eight states where the Sallie Mae unit helps runs 529 plans. About $42 million in gifts have arrived since 2008. AllianceBernstein even has a feature that lets you put money into someone's 529 account via a direct debit from your bank account.
Unfortunately, few new parents register or think to ask friends for 529 money, even my fellow travelers here at The Times. And even if you know what state your friends send their 529 money to, you may not be able to easily send money there yourself.
"The last thing we want to do is not take your money," said Jeff Howkins, president of Upromise Investments, which helps run this particular plan. "We have looked at how we could modify it from time to time, but part of the value proposition we're selling is compliance and controls."
So I'm stuck writing a check to the Nevada plan, pestering the groggy Sullivan for his account number, writing it on the memo line of the check and then dropping the check in a mailbox.
Considering the rigmarole, you can see why entrepreneurs at sites like Gradsave, FiPath, GiftofCollege and GiveCollege have all piled in to try to make giving easier. They allow anyone to give money to anyone else's plan, no matter where it is.
I experienced a few hiccups testing the sites, but it's the 529 industry's response to the gifting companies that seems most noteworthy. In February, the College Savings Plans Network, an industry group, issued a hyperventilating statement accusing the startups of all sorts of things.
The group raised concerns about the fees the new companies charge, usually a handful of dollars a gift. I buy GiveCollege's argument, however, that this is the rough equivalent of sales tax or shipping that you'd pay for an alternative gift.
The Securities and Exchange Commission did not want to comment on any particular company, given that specific facts can make judgments like this a close call.
But David W. Blass, chief counsel for the division of trading and markets, wrote in an email that generally "the hallmark of being a broker-dealer is the receipt of a commission or other transaction-based compensation in connection with a securities transaction."
I had not anticipated starting the week thinking about baby gifts and ending it with agency lawyers. And if any whiff of regulatory uncertainty makes you uncomfortable, you may be stuck waiting for the newborn's parents to open an account and give you the account information so you can give directly.
Ron Lieber is the Your Money columnist for the New York Times. Reach him on Twitter @ronlieber.