Half of all charitable bequest dollars will come from people passing at this age and older: 89.
The big wealth transfer is big news. We see it in presentations, articles, and posts. But there’s also a big misunderstanding about it. Confusion about the wealth transfer comes from a simple misunderstanding. Wealth doesn’t transfer when people die. It transfers when people WITH WEALTH die. And those are two very different ages. Suppose someone is nearing age 60. If they’re in the top 10% of wealth, they’ll live 13.5 YEARS LONGER, on average, than if they were in the bottom 10% of wealth. Beyond this, charitable people live longer than others within their same wealth category. This all leads to our statistic of the day.
Why were charitable bequest dollars essentially flat for the first 20 years of this century? Because that’s when the Depression Era Baby Bust generation dominated the key age ranges of 85-95. (That’s when most charitable wealth is actually transferred.) And what about the Baby Boomers? The impact has already started, but it won’t peak for years. The oldest Baby Boomers won’t hit 85 until 2031.
So, what does this mean for bequest fundraising? Don’t ignore your oldest friends. In an Australian national study, 77% of charitable dollars were transferred by documents signed in the 80s and 90s. A U.S. study showed that these final documents usually contain changes in the charitable component. And if you’re communicating with your oldest friends based only on recency of donation, you’ll go silent right when they’re signing the controlling documents. Charitable estate decedents typically stopped donating in the last 3 to 5 years of life. In a study of Australia’s biggest charities, 40% of legacy society members had no communication from the organization in their last two years of life. No surprise, this ignored group was 2X more likely to leave the organization out of their final will documents.
Working with older people is essential to success in bequest fundraising. And yes, age-related issues can make the work harder. But the wealth transfer isn’t going to be making young people wealthy. (People aged 65 are still net recipients of estate wealth, not net transferers.) Of course, getting in the will early is powerful. It leads to larger estate gifts and larger current gifts. But we can’t just count it and forget it. The charitable bequest winners will stay connected with their oldest friends.
References:
- See research article links at https://lnkd.in/dAP9ZPVV
- See also https://lnkd.in/guhGuSXf
Russell James, J.D., Ph.D., CFP®️ is a professor at Texas Tech University. He directs the on-campus and online graduate program in Charitable Financial Planning and also teaches Charitable Gift Law at the Texas Tech University School of Law. Dr. James has over 100 publications in academic journals, conference proceedings, professional periodicals, and books including 20 on neuroimaging and neuroeconomics. He has been quoted in a variety of news sources including The New York Times, The Wall Street Journal, CNN, MSNBC, CNBC, ABC News, U.S. News & World Report, USA Today, the Associated Press, Bloomberg News and the Chronicle of Philanthropy.
Related Resources:
- The Fundraising Myth & Science Series, by Dr. Russell James
- Why Traditional Major Gift (and Legacy Gift) Fundraising No Longer Works
- Why some planned giving departments are missing out on bequests.
- “Start with Heart” Leadership: Emotional Intelligence as the Foundation for Fundraising Success
