Nonprofit Investment Management Blog

Why Your Nonprofit Should Prepare for the Great Wealth Transfer

Posted by Megan Lencoski on Dec 13, 2022 2:00:00 PM

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In the upcoming decades, older generations are expected to pass on the largest amount of wealth in history. This wealth will be left to younger generations, taxes and nonprofits, changing the landscape of philanthropy in more ways than one. If your nonprofit isn’t prepared for this shift in paradigm, you will find it more difficult to raise the funds you need. In this article, we discuss what the great wealth transfer is and why you should begin preparing now.

What Is the Great Wealth Transfer?

The great wealth transfer refers to the gradual shift in demographics and finances from the baby boomer generation (born 1946 to 1964) to future generations. Baby boomers appeared on the scene as a result of the strong, post-war economy and excitement of GIs being home from the war. This happiness created a boom in the population. Now, as they age and pass away, their wealth will be transferred to later generations.

According to Forbes, both the silent and baby boomer generations are expected to pass on an estimated $30 to $68 trillion in the next couple of decades. This will be the most significant wealth transfer in history. Gen X, Millennials and Gen Z will be the recipients of huge inheritances while reaching their peak earning years. This shift will cause their habits and preferences to shape the consumer and philanthropy landscapes.


Why Should Nonprofits Prepare Now?

Nonprofit organizations that do not proactively prepare for this change in wealth will be left behind. In order to raise funds, nonprofits must build relationships with boomers who are in control of the money now while also preparing for when it will be Gen X, millennials and Gen Z who control the future.

The problem is this won’t happen overnight. Planned and major gifts take years of nurturing and relationship-building before coming to fruition. Most donors support organizations on a smaller, consistent level for years before making a large, lump-sum gift. If you wait until millennials are in their 70s to cultivate them as planned donors, you are already too late.

Younger donors are different from their parents and grandparents. They interact differently, want more engagement and social awareness, and have shorter attention spans. If your nonprofit doesn’t adapt to the communication styles of these donors, you will miss out on future funding. 

It’s also important to note that Gen X and millennials are more likely not to have children than older generations. This leaves an opportunity for nonprofits, because individuals will look for ways to give back and plan for their estate after their passing. 

Even if they do have kids, many boomers have publicly stated their intention to support nonprofits with their estate. Just look at The Giving Pledge, where hundreds of rich Americans (think Warren Buffet, Bill and Melinda Gates, and Mark Zuckerberg) have pledged to give away over 50 percent of their wealth to charity. And don’t worry if you don’t have access to this caliber of a donor; this is not just a billionaire trend.

"Definitely, this generation is leaving more wealth to their charity foundations than to their children," says Anita Choudhrie, a leading (boomer) philanthropist, who runs The Stellar International Art Foundation and Path To Success. "This very proud generation of baby boomers wants to leave a legacy in memory of their upbringing and heritage." 


Is Your Nonprofit Ready for the Next Great Wealth Transfer of Wealth?

Are you prepared for major gifts from all generations: such as an endowment, gift of stock, crypto donation, or Qualified Charitable Distribution? Talk with your financial advisor to ensure everything is in place to facilitate an easy and smooth transfer of funds. If you don’t have a financial advisor, Contact Carnegie Investment Counsel to learn how we can help your organization!


Looking for a Financial Advisor for Your Nonprofit?

Contact us if you are currently looking for a second opinion or help with investment management. We are happy to schedule an introductory meeting at your convenience.


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Topics: Nonprofit

Megan Lencoski

Written by Megan Lencoski

Megan is passionate about helping nonprofit organizations achieve their goals of maximizing impact and growing revenue streams. With over 9 years of experience working in nonprofit development, she understands that every organization is unique and faces different challenges. That’s why she meets nonprofit leaders where they are and tailors her approach to their specific needs. By providing customized guidance, practical solutions, creative fundraising techniques, and access to an extensive network of resources and specialized tools, Megan helps organizations create effective strategies that will help them achieve their revenue goals.

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