Wealth Transfer

Careers in Planned Giving – Intro

Wealth Transfer ProphecyFor close to 20 years, I have counseled colleagues into whether to join the planned giving field. Some have made it while many have not.  This post is the first in what should be a long series on this topic.

For an intro, let’s assume that we all agree that the fundraising world is sitting on a precipice – huge swaths of most fundraising databases are filled with babyboomers!  Let’s not forget that people do not work or live forever – so giving doesn’t continue forever either.  A scary prospect for most organizations but there is an answer to soften the blow: planned giving.

So, planned giving – which as a career option has taken its hits over the past two recessions – is poised for growth!  That means more and possibly better jobs – either as planned giving specialists or fundraisers with strong planned giving skills.

That being said, if you have not been working in or around the field, you are a long way from breaking into this area.  My goal with this series of posts is to breakdown the profession, define it clearly, lay out potential job options, job skills necessary to work on, and interim steps to be considered along your career path.

Here are my initial blog post that I am mulling over:

  • What is planned giving from a career perspective?
  • Is the great wealth transfer really coming and will it be great or a dude?
  • Who should be looking into planned giving and who should be looking to add it to their skillset?
  • Getting a job in planned giving or one with significant planned giving responsibilities
  • The planned giving job market – a realistic assessment

What do you think?  Please add your comments! And, forward to friends who might be candidates for a job change in this directions.


The Rise and Fall (and Rise Again) of Planned Giving (2015) [WATCH FREE WEBINAR RECORDING]

Please feel free to check out this webinar we just gave last week looking at updated data sources like Giving USA 2015 and the VSE for planned giving purposes.

The big question we address is whether we are starting to see the impact of the baby boomers on global planned giving numbers.  But, you will have to watch the video to get the answer!

Enjoy and feel free to comment!


Great Wealth Transfer Is Back?

I am going to admit that throwing around the idea of Trillions of dollars in Wealth Transfer going to Nonprofits over the next 46 years actually makes my brain a little tired. Actually, just seeing an email from Paul Schervish this week got me a bit sleepy.

Want to read the latest Wealth Transfer predictions from Boston College and Mr. Schervish, here you go:


How about the headline?

New Report Predicts U.S. Wealth Transfer of $59Trillion, With $6.3 Trillion in Charitable Bequests, from 2007-2061
Additional Lifetime Giving of $20.6 Trillion, Say Boston College Researchers

How about the highlights?

  • Through estates, heirs will receive $36 trillion.
  • Federal estate taxes will claim $5.6 trillion.
  • The sum directed from final estates (for which there is no surviving spouse) toward charity is estimated at $6.3 trillion.
  • Total gifts to charity during the study period are vastly greater, according to the study, which estimates that lifetime giving will yield an additional $20.6 trillion for charity from 2007-2061

I know it sounds like a lot of money for nonprofits, through Planned Giving no less, but it still gets me weary looking at this stuff.

What do you think?

Wealth Transfer Discussion Continued…

I suspect very few people actually see the comments on my blog posts – due to the style of blog.  Here is one comment worth re-posting: Paul Schervish’s response to my rather biting commentary on his work earlier this week – along with my own mea culpa!  I try to entertain, expose, and educate through my posts but there are times in which the “uncensored” part of the blog unintentionally or unfairly hurts others.  For that I apologize to Professor Schervish!  Of course, he still has to back up his work and as you will note at the end of Paul’s response below, he is coming out with new estimates – which we should all be looking forward to seeing!

Response from Paul Schervish, Center on Wealth and Philanthropy at Boston College.
Jonathan has stumbled upon old news-say almost 8 years ago. There was a story in Chronicle on Philanthropy and our response by e-newsletter http://www.bc.edu/content/dam/files/research_sites/cwp/ssi/vol10.html. We discovered this problem and were in midst of writing an explanation when the Chronicle article came out. Turns out that the wealth transfer predicted for 1998 through 2017 is coming true and more than coming true (heirs alone will receive the $13 trillion we predicted for heirs, taxes, bequests, and settlement costs together! So wealth transfer is exceeding our middle 2% estimate. And charitable giving, especially during lifetime also increased until the Great Recession. What isn’t happening is the measured distribution to charitable bequests.

However, from that time forward, we readily stated in talks and in responses to queries that charitable bequests are not occurring as the model predicted. We knew that and what Jonathan writes as expose is, as I said, old news. To predict bequests we took each wealth group from the middle to late 1990s and then modeled the level of bequests for each wealth level (see Russell’s first chart). What happened is what Warren Buffett did: began to transfer to foundations and direct charitable giving what he planned to leave as charitable bequests in his estate. The data shows that in the 2000s there was great increase in foundation formation, donor advised funds, and lifetime giving (see Russell’s second chart). Our concern about the 2000-2001 NASDQ drop, recession, and 911 that we cite in our newsletter, it turns out was not as telling as what we discovered later about foundation formation and contributions to foundation.

People who were financially secure changed behavior from the 1990s and started and filled foundations with the money liquidated from the entrepreneurial growth, sale of firms, and public offerings. Until the around 1999 the amount going to bequests each year was about the same amount going to foundations (Russell has incline in charitable bequests correct for 1990s). After that date foundation growth skyrocketed and not as much was left in estates for charitable bequests—even though on average gifts to foundations or DAFS is still the major destination for charitable bequests). Simply change in behavior. In fairness to Jonathan and Russell, we have presented this information at conferences but have not published this finding.

Still, a courtesy would have been for both Jonathan and Russell to contact us for an explanation before questioning our work with an outdated criticism. We could have provided the answer about bequests, namely, as I said, foundation formation and distribution of assets to foundations and DAFS as well as life-time giving which is now deemed substantially greater in the post-recession by some reports than the amount of individual giving provided by GUSA. This would have made for a more informed and helpful blog.

But we do make allowances for this in our soon to be released wealth transfer model. The new model takes into account the question “where have the bequests gone?”

(As an aside, let’s think about all the billionaires (both who have and have not made the giving pledge), not to mention hecta-millionaires, who are yet to settle their estates before the 2052 deadline approaches.)

As to the possibility of charitable bequests being put more on the map, Legacy Leaders’ Chris Heldman (cheldman@legacyleaders.com) has argued and shown that bequests are still low hanging fruit and charitable organizations do not have or commit the resources to do large scale bequest requests except from their top prospects. Obtaining committed charitable bequests for charities is something for which Legacy Leaders has a talent, method, and proven track record demonstrated by its bequest accomplishments for major charities around the US and Canada (see insightful comment by Michael Rosen).

Finally, back when Robert Sharpe served with John Havens and me on the methodology advisory board for GUSA, Sharpe provided an answer to part of the discrepancy. He sought to persuade the methodology advisory group that smaller bequests by lower wealth individuals not captured in IRS data led to a value of bequests approximately double ($35-40 billion) the approximately $20 billion reported by GUSA.

A new Wealth Transfer Model with new and updated data, modules, and estimate will be published soon. This new model takes into account giving to foundations and other lifetime giving, and provides a lower estimate of charitable bequests. We always said that behavior on the part of charities could prove our estimates false in obtaining more or less lifetime giving and charitable bequests than we predicted.

We would be grateful if Jonathan could offer us a space to summarize the new wealth transfer model estimates after we announce findings from the forthcoming updated and improved wealth transfer study.

Of course, I will post on the new model!