Harold Alfond founded Dexter Shoe Co. in Maine in 1958 and shared millions of dollars to promote health and education in the state. After giving many scholarships to college-age students, "he wanted to help build aspirations for college at the front end of life," says Greg Powell, chairman of the board of the Harold Alfond Foundation. Mr. Alfond laid the groundwork for this legacy before he died in November.
How much will this cost the foundation?
The Harold Alfond Foundation expects to spend $7 million to $9 million a year, if everyone participates.
How much will the money be worth if the family continues to contribute to the account?
If a family adds $50 a month to the account and it grows at a rate of 8 percent, it would be worth $25,000 when the child turns 18, according to the Finance Authority of Maine, which administers the NextGen plans. Without additional deposits, the $500 could grow to $2,000. Tax-free withdrawals can be used for any accredited postsecondary schooling, including vocational training or occasional classes.
Researchers also found in interviews that having a college savings plan encourages students to earn better grades and make more educational plans.
I think this is an awesome, very generous idea. Hats off.
"It's a great testimony to Mr. Alfond's generosity – I just wish he could have lived long enough to see the program itself started," says Scott Bullock, CEO of MaineGeneral Health.