Couldn't help but pay extra attention to the “Are Charities Losing Out on the Wealth Transfer” post in the always interesting blog review in Give & Take, Peter Panepento's column in the Chronicle of Philanthropy.

Robert Frank, author of Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich, predicts in a recent interview on NPR that the current generation of wealthy Americans will pass along 75 percent of their wealth to their children.

Query: Does this mean that the hoped for tsunami of wealth that is/was to fill non-profit treasuries as the World War II and early Boomer generations die off simply an urban legend?

Absolutely not. Mr. Frank is not talking about average Americans, he's talking about Americans with individual or family wealth ranging mostly from $10 million to $100 million. Yet the vast majority of planned gifts from this intergenerational transfer come from middle class, not wealthy folk. And 95% of it comes in the form of simple bequests by will, not through complicated trusts and other family wealth and tax management devices.

But, the Chronicle's blog and the NPR interview triggered a series of thoughts and questions that all fundraisers should be asking — particularly those of us who work with organizations that have large donor bases built by direct response.

For example…

  • Since we're more than half way through the 'window' predicted for this intergenerational trasfer (1987-2015) why don't more fundraisers have a sense of urgency about planned giving, or what I prefer to call 'legacy' marketing.

After all, large numbers of the most loyal American donors fall into the 75 year+ age group. A simple look at the mortality tables should give you the shivers. 38% of the women on your file in this age group– and 55% of the men — will be dead in 10 years.

  • In every donor file we've ever studied, between 20% and 35% of your direct respoonse donors are prime legacy prospects.

But how many organizations are actively seeking legacy support from this group? Apparently not enough. In studies we've done, 25% of these donors say they haven't been asked to make a bequest.

This is particularly true for those groups built and sustained largely by direct response. Why spend more and more and get less and less on new donor acquistion when you're sitting on an aging platinum mine?

To quickly calculate what you may be leaving on the table go to the Legacy Calculator on the Craver, Mathews, Smith & Company website, answer a few questions and you'll have your answer.

In my opinion, most planned giving programs place too much emphasis on the ins and outs of taxation and complex structures for giving. At the same time they

Continue reading “Planned Giving's Urban Legend”

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