Missouri State Treasurer, Sarah Steelman

[Graphic: Frequently Asked Questions About Believe]

What does BELIEVE stand for?
BELIEVE stands for Bringing Educational Leadership by Investing and Expecting Victory in Every Child.We believe that every child in Missouri can succeed if given the right support. Missouri has over 11,000 foster children under its care. BELIEVE is a program to identify corporations or non-profit organizations interested in sponsoring a child who is in the custody of the State of Missouri for a MOST (Missouri Savings Tuition Program) scholarship. MOST is the State of Missouri’s 529 plan which allows the sponsor to set up an account to save for college tuition tax free. The sponsor also receives a tax deduction for their annual investment in the MOST plan of up to $8,000 per person.

Who can agree to sponsor a foster child?
Any corporation, non-profit organization, person, or other entity can agree to sponsor a child and set up an account naming the child of their choice as beneficiary.

What is the benefit of a MOST account?
The investment in a 529 MOST account allows the investment to grow tax-free and the beneficiary can use it for their college tuition and other college costs tax-free. In other words, at no time is tax due on the principal or the earnings as long as it is used for eligible college expenses. The organization or entity contributing to the account can receive a tax deduction each year of up to $8,000 per taxpayer.

How much is required to open an account?
To open an account you only need $25.00. We are asking that for the BELIEVE program the initial contribution be based on the investment plan that is most suitable for the age of the child selected to help kick start a college savings plan for a foster child. But the bottom line is that any amount is better than none at all.

What happens if the child does not go to college after making annual contributions?
A new beneficiary can be named at that time or when the account is initially set up a contingent beneficiary can be named. If neither of these options is suitable to the account owner, then the money can be used by the account owner but taxes would be owed if the proceeds are not used for college expenses.

Why should any corporation or entity be interested in sponsoring a child for the BELIEVE program?
Many foster kids never have a chance to reach their full potential because of circumstances that are out of their control. The state takes responsibility for these kids, but what happens to them after they turn 18? Many times we don’t know and what is worse, many times no one cares. This program singles out a child that a group of people, organization, church, or corporation can encourage by providing the money to ensure that they have a chance to go to college. If the child knows this – knows that suddenly somebody BELIEVEs in him or her to actually succeed and reach their goals then great things begin to happen. This is an opportunity to help a child reach their dream by investing and believing in their future by setting up a 529 MOST account to pay for their college expenses.

How do I sign up to sponsor a child in the BELIEVE program?
Organizations wishing to participate in the BELIEVE program should contact Jane Dudeck, Chief of Staff, State Treasurer's Office at (573) 751-4943 or Jane Dudeck .

How much would an organization need to contribute if it wanted to cover 100% of the costs of tuition for a child?
The answer to this depends on a number of variables, including the number of years that the organization contributes before the child goes to college, the actual college that the child goes to, the future rate of inflation for tuition costs and the return on the investments selected. Here are several examples of how much an organization would need to contribute to fund 100% of projected costs based on a tuition inflation rate of 5%, a return on investment of 10% and four years’ attendance at the University of Missouri-Columbia (where costs are currently estimated at $8,700 per year):

For a 13-year old child, assuming an initial $5,000 contribution, a sponsor would need to contribute $500 per month to cover 100% of projected costs.
For a 5-year old child, assuming an initial $5,000 contribution, a sponsor would need to contribute $160 per month, or just under $2,000 per year, to cover 100% of projected costs.

Can an organization “share” the sponsorship of a child or partner with another organization to sponsor a foster child?
Yes, any amount that an organization contributes to the BELIEVE program will greatly help a foster child defray the costs of higher education and is greatly appreciated. The amount of tax deduction that a sponsor can take is not affected if more than one organization helps sponsor a child. In other words, two organizations donating $8,000 a year for the same child can each deduct up to $8,000.

Who invests the money that we contribute to BELIEVE, and how do I know that our money is safe?
The MOST program offers several different investment options for sponsors, which they select. These investment options—which include a 100% Equity Option, a Guaranteed Option and a Managed Allocation Option which rebalances assets based on the age of the child—are professionally managed by Upromise. Like all investments that are invested primarily in the stock market, there is no guarantee for either the 100% Equity Option or Managed Allocation Option that these investments will maintain 100% of principal or provide a guaranteed return. However, over the long term, investments in these options should perform in line with broad equity returns.

Missouri State Treasurer, Sarah Steelman
PO Box 210, Jefferson City, MO 65102 (573)751-2411