Looking Back, Looking Forward: Updated predictions from Havens and Schervish on Wealth Transfer and Charitable Giving in the 21st Century

July 2014

© 2014, Sarah Ruef-Lindquist, CEO, Maine Women’s Fund

On May 28, 2014 The Center on Wealth and Philanthropy at Boston College released “A Golden Age of Philanthropy Still Beckons: National Wealth Transfer and Potential for Philanthropy Technical Report” which revisits the original estimates by John J. Havens and Paul G. Schervish entitled “Millionaires and the Millennium: New Estimates of the Forthcoming Wealth Transfer and the Prospect for a Golden Age of Philanthropy” from 1999.

In the original article, their most conservative estimates for wealth transfer from one generation to the next between the years 1998 and 2052 were just shy of $41TR, including $6TR to charities. More than 10 years later, the Great Recession, in which “aggregate value of household asset declined slightly more than 20 percent…and household debt increased, on average, by about 2 percent” (See 5/28/14 article, page 3) was seen by many as a threat to the original estimates from 1998, and the philanthropic sector has been justifiably anxious to learn if the post-recession analysis and predictions would be impacted negatively.

Surprisingly, perhaps even to the authors themselves, the impact was not overall detrimental.  Reasoning that:

Since the proportional reduction of wealth was smaller among the wealthy households that donate the most to charitable causes and that account for the majority of wealth transfer as compared with households at the lower end of the distribution, the recession’s impact on wealth transfer and charitable giving was somewhat attenuated. (5/28/14 Article, page 4).

Havens and Schervish noted an observation of a higher level of wealth transfer during lifetime than their original estimates had predicted after 2000 than existed before 2000 amongst those age 65-79 (p. 4). This includes transfers to private foundations, donor advised funds, split interest trusts and living trusts from 1997-2007. (Ibid). This caused them to expand their concept of wealth transfer to include these substantial “intervivos”, or lifetime, transfers.

The result of their research and analysis results in a conservative wealth transfer estimate of $59TR in 2007 dollars for the years 2007-2061, 12% greater than the original estimate, based on the increased transfer tax (estate and gift) exemptions at or above $5M. The corresponding conservative estimate of charitable gifting is $27TR, $21TR higher than the 1999 estimate.

Noting that the largest estates (in excess of $20M) tend to give higher proportions of their value to charity than smaller estates, and that lower tax impact is translating into higher charitable dollars from estates, they suggest that “If…fundraising becomes more effective, they (charities) have an opportunity to increase the amount that goes to charity well above our estimates” (5/28/14 Article at p. 6). It certainly argues in favor of stepping up our fund raising games.

Annually, a report called Giving USA looks at the prior years’ tax returns and analyzes the amount and focus of philanthropy. Their report on 2013 data shows gifts through bequests growing at rates exceeding living individuals, foundations or corporations, consistent with these predictions.

What about Maine?

Every year, the Maine Philanthropy Center examines income and estate tax data to determine the charitable giving of Mainers who file income tax returns and itemize deductions, and publish a report on giving by foundations, corporations and individuals (annual gifts and gifts through estates). Giving in Maine 2014 included data for annual giving consistent with Maine’s perceived low ranking in the US and interesting data about gifts through estates that reflect patterns of post-mortem generosity we’ve seen before.

Consistently, Maine income tax returns report one of the lowest levels of annual giving to charities in the US.  The data for 2011 indicated Maine was 47th in individual giving in dollars ($432 versus $175BN nationally), and 35th in terms of those reporting that they made charitable gifts during the year (23% giving versus 26% nationally). Maine also ranks 50th in terms of gift size.

But it seems that Mainers are more generous with their wealth at death:  2011 data shows that Mainer’s rank 3rd in the percentage of estates making gifts to charity (40% of estates in Maine making gifts to charity, versus 22% nationally), and is 9th in size of estate gifts to charity ($7.7M versus $10.4M national average).  This is consistent with data from 2008, when 31% of 36 estates making gifts to charity ranked Maine 3rd in the nation for gifts to charity through estates. In the years between 2008 and 2011, Maine ranks in the top 10 of those states with gifts to charity.

In the year following her death in 1997, Elizabeth Noyce made Maine #1 in gifts to charity through bequests. Her estate was atypical, but demonstrates the power of one woman to make a difference for an entire state.

So while not making annual gifts at the rate or in amounts of those from other states, Mainers would seem particularly generous to charity through their estate plans.  It may be frugality and fiscal conservatism during life that then allows and support generosity at death.  Add to that phenomenon the continued greater longevity of women as compared to men and one can reasonably conclude that women are more often the holder of wealth in later years and in a greater position to be designating charitable gifts through their estates. And it would seem from the data from the latest report from Boston College that the numbers and potential for charitable giving are even greater than was thought 16 years ago, including lifetime transfers preceding death. 

If there was ever a time for gift planners to “get busy”, it is now.


“A Golden Age of Philanthropy Still Beckons: National Wealth Transfer and Potential for Philanthropy Technical Report”, The Center on Wealth and Philanthropy at Boston College, May 28, 2014

“Millionaires and the Millennium: New Estimates of the Forthcoming Wealth Transfer and the Prospect for a Golden Age of Philanthropy”, John J. Havens and Paul G. Schervish, 1999.

“Giving USA 2014”, Lilly Family School of Philanthropy at Indiana University

Author:  Sarah Ruef-Lindquist, CEO, Maine Women’s Fund


'Tis The Season...

June 2014

‘Tis the Season…

…graduation season that is.  While many college students are embarking on the next stage of their lives, my son, a junior in high school, is just entering the college search phase.  My husband and I get to go along, partially because Mom and Dad are the ones who will worry about how to pay for college.   

Last week, my son and I headed to southern Maine for a college tour and it was similar to ones that we had been on before. There was the presentation from the Admissions Office and the tour of the campus. And, of course, the discussion about how the college determines what they will offer to each student as a financial aid package. The size of a college’s endowment can have a big impact on what this amount will be.

There is no question as to how important endowments are to an organization. But during this college visit, I started thinking about how planned giving, and philanthropy in general, does so much more than help ensure the financial sustainability of an organization.

It is people who are impacted from philanthropy. Depending on the mission of your organization, the person who will benefit may be a student who can’t afford a college education, or a patient who needs life-saving medical care, or a loved one of someone who receives hospice services.  

How robust is your philanthropy program?  Have you taken that first step and created a planned giving program?

Taking the first step sometimes seems like the hardest.  Trust me, it’s doable.  To help, here is a link to an article in the Philanthropy Journal that outlines how to launch a planned giving program:

‘Tis the season for you to graduate. Embark on the next stage of philanthropy.

As for me, I am off to Vermont for another college tour!


Author:  Cheryl Callnan, Senior Philanthropy Officer, Maine Coast Memorial Hospital





May 2014

Always Wear Sunscreen is the title of a commencement address supposedly delivered at MIT in 1997 by Kurt Vonnegut.  I think about that urban legend a lot at this time of year and wish that the commencement addresses that I have been sitting through were delivered by speakers as witty and wise as Mary Schmich, the Chicago Tribune columnist who actually wrote the “Sunscreen” address (read the column here).  The one I’m listening to at the moment is a perfect example, which is why I have chosen to use my time wisely and compose this overdue blog entry for the Maine Planned Giving Council. 

What do commencement addresses and planned giving have in common?  Well, commencement addresses are filled with advice.  The advice is always sincere and well-intended and usually illustrated by long and, if you are lucky, funny stories about the speaker’s own learning experiences.  As a regular consumer of commencement addresses, I have a theory about them, honed by 25+ years of experience as an attendee.  My theory is that many try to do what the four years that precede them should have done, and they try to do it all in the space of 20 minutes.  It can be futile and painful experience.  The good ones, though, are given by speakers who have a feel and a passion for the institution gained from personal experience with it.  They are inspiring and fruitful.

Planned giving is like this.  I have sat by deathbeds and listened to dying people talk about wanting their loved ones to be financially secure and wondering who will watch out for them and make sure that they don’t spend an inheritance frivolously.  Many also want to talk about their legacy – what will speak for them when they are gone?  I work for a hospice organization, so I would expect to spend more time with the terminally ill and actively dying than most planned giving professionals.  What comes to me most often in these moments is that I wish I had more time.  With a bit of time, planned giving can do most anything.  Worried that a younger relative will go through your bequest in a year and then be destitute?  Set up a charitable lead trust that will keep the principal out of their hands for ten years – by then, they will have matured and will be responsible.  Concerned that they won’t have enough to live on while they do their growing up?  How about a charitable remainder trust that will give them a modest fixed income for ten years?   Perhaps most importantly, either of those plans and many others addresses the legacy issue because they will all also benefit a non-profit.  In the case of the lead trust, the non-profit will receive a fixed payout from the trust until it matures.  The charitable remainder trust will also benefit a non-profit, since its remainder principal will pass to the organization when the trust matures.   So, my advice: give your donors and prospective donors the gift of time.  Don’t wait until they are dying to talk to them about the benefits of planned giving.  Talk to them about their philanthropic legacy – and about their families – as often as they will let you.  Find out what they want and then figure out how to get them there. 

And always wear sunscreen.  

Author:  Elizabeth Limerick, Hospice of Southern Maine


The Joy of Listening

March 2014

You finally scheduled an appointment with the donor after weeks of trying. You prepare for the visit by developing a strategy for the flow of conversation.  Perhaps you are going with someone else....the leader of the organization, the chair of the Board, maybe both. Now the strategy of the meeting becomes almost like a highly choreographed dance. The leader will talk about the success of the organization executing the mission. The chair will talk about the importance of philanthropic support for new initiatives. Very shortly 'the ask' is coming. Who will much do we ask do we close?

Something in the script is missing.

Of course....the donor is missing. But that's not possible.....we have their biography, we know what Boards she serves on, we know where she went to college, how many kids she has, how she made her money, how many years she has supported our organization, how much she has given us....we have done our homework. We know this donor.

Not really.

We don't know this donor because we haven't listened to her. We haven't even left room in the script for her to respond other than 'yes', 'no', 'I'll think about it'.

Why does this donor care about the organization? What other organizations does she care about and why? How has her philanthropy evolved? What is important in her life? How can we steward her better?

There is joy in listening to the donor.....the  human connection one experiences when we listen more than talk. We are more genuine when we don't think about the next sentence we will say when we are hearing them talk. If we are only hearing and planning, we have stopped listening.

So for your next donor visit, listen more than talk.....ask more than tell and experience of the joy  of listening to the donor.

Author:  Jennifer Foley, VP of Development at Maine Public Broadcasting Network


Conference Recap & Membership 

November 2013

Thank you to everyone who attended our annual conference last month and for your positive remarks about the speakers and networking opportunities.  For those that were able to come for the networking dinners on Wednesday night, that activity received the highest marks along with Cindy Sterling’s presentation on Financial, Estate and Gift Planning for Non-Traditional Families.  Those results are a good reminder about the importance of spending time to get to know each other as people and peers, along with the opportunity to learn new content as we all do our best to provide the most up-to-date information to donors who support our organizations and other clients we serve.

As the new President of the Maine Planned Giving Council, I look forward to getting to know more of you and hope that you will sign up to be a member of the Maine Planned Giving Council for the coming year.  We look forward to providing an array of different programs, including continuing our regional learning circles and considering ideas shared at the conference to create a stronger electronic network as well.  Thank you for all you do on behalf of the people of Maine.  Jennifer Southard, President, Maine Planned Giving Council and Vice President, Donor Services and Gift Planning , Maine Community Foundation.

Author:  Jennifer Southard, Vice President, Donor Services & Gift Planning, Maine Community Foundation