The Great Wealth Transfer: $53 TRILLION Up for Grabs
Have you ever wondered what it would feel like to have the riches of the Romans, the affluence of the Ottomans, or the prosperity of the Greeks at your fingertips? As awe-inspiring as these historical dynasties were, none can compete with the Baby Boomer generation's accumulated wealth. Today, we're standing on the precipice of a monumental shift in global wealth distribution, a phenomenon we'll affectionately call "The Great Wealth Transfer."
Over the next 30 years, an astounding $53 trillion will change hands, from the wealthiest generation in human history, the Baby Boomers, to their successors. This seismic shift presents an unparalleled opportunity for philanthropy and a potential gold mine for Nonprofit Development Professionals and Nonprofit Leaders savvy enough to tap into this wealth transfer.
Why the Baby Boomers?
If you were born from the years 1946-1964, then congratulations! You won the economic lottery of the 20 century. Statistically speaking that is. The first question we have to ask ourselves though, is why are the Baby Boomers better so much better off financially compared to every other generation both before and after them? There are a few reasons for this:
Size: After years of war throughout the late 1930’s and early 1940’s, an entire generation finally came home. The years immediately following 1945 saw a total of 76 million births in the United States during an almost 20 year period called the “baby boom”. By 2012, 65.2 million of those born during this period were still alive based on the most recent census data. The size of this generation dwarfs both the Greatest Generation (29.9 Million) that came before and Generation X (49.1 million) that came after. So we have to look at the unusually large number of people holding this wealth when considering the total lump sum of money that this generation controls.
Social Change: The Baby Boomers higher levels of education than their parents’ generation allowed them to better maximize economic opportunity. Female Baby Boomers also flooded into the workplace at much higher rates than the previous generation, meaning a much higher percentage of people in this generation were wage earners than generations past.
Economic Conditions: The time period from the conclusion of World War 2 to the early-mid 1970’s was one of the greatest economic expansions in the history of humanity. In a 30 year period, the U.S.GDP skyrocketed from $228 billion in 1945 to $1.7 trillion in 1975. The U.S. Baby Boomers were perfectly positioned to ride this economic wave through their working years, giving them unparalleled opportunities for wealth accumulation that would not be seen again.
Fundraising Trends: Adapting to the Shift
With all of this in mind, modern fundraising strategies must adapt to the new reality. The standard playbook won't cut it anymore. Major gifts from those with substantial resources, along with planned and estate giving, will become the backbone of fundraising activities even more than usual as we move into this era of colossal wealth redistribution.
The fact of the matter is as people age, they typically accumulate more wealth and become more philanthropic. While you can definitely do the right things with your annual giving, direct mail, grants, and events, NONE of these will ever move the needle like major and planned gifts.
Organizations that anticipate this trend, positioning themselves strategically now rather than later, will be in the best position to attract a slice of this 53 trillion dollar pie. Those who don't may find themselves left out in the cold.
Philanthropy: A New Landscape Emerges
The sheer scale of the wealth being transferred is set to reshape philanthropy as we know it. In this context, it's essential to remember one thing: major gifts don't happen by accident. They are the result of thoughtful planning, relationship-building, and excellent stewardship. Nonprofits with very mature fundraising programs already know this and execute this well. However, if this is an area you are currently lacking, it will only get harder going forward, not easier.
More than ever, nonprofit leaders need to be informed, strategic, and proactive. Understanding your potential donors' needs and wants is vital. You'll need to become well-versed in estate planning, tax implications, and strategies for charitable giving in this new landscape. This can be cumbersome and honestly sometimes even downright boring. However the ROI for time spent on planned gifts vs something like annual giving is not even close.
Leveraging the Wealth Transfer: What's Your Strategy?
As the steward of a non-profit organization, the question you should be asking yourself is not if this wealth transfer will affect you, but how.
If you’re eager to ensure your organization doesn't miss out on this significant opportunity, it's time to level up your knowledge, strategies, and execution. If you're not already considering the power of major gifts, now is the time to start. These large-scale donations can be transformative, not just sustaining your work but enabling you to reach new heights. Is sticking your head in the sand and pretending this won’t affect you an option? Sure it is. However your mission will miss out on more support than you could possibly fathom.
Are you ready to navigate the landscape of the greatest wealth transfer in history? To learn more and equip yourself with the tools and strategies necessary to leverage this momentous opportunity, consider attending our upcoming fundraising conference. We’ll be discussing all these topics and more, providing valuable insights to help you capitalize on this new era of philanthropy. Click here to check out our agenda of topics.
There's an astonishing $53 trillion up for grabs. The wealth of the Baby Boomer generation will eventually be transferred somewhere, and the nonprofits that do the right things now will be the beneficiaries of that generosity.
