That is a $1 trillion question, or perhaps a $7 trillion question, depending on how one calculates the projected transfer of wealth to baby boomers over the next decade. Charitable institutions nationally and locally are maneuvering to capture some of this windfall.
Boomers as a group are less frugal and carry more debt than earlier generations. They are less likely to attend regular religious services, formerly a key correlate of charitable giving. And they have delayed having children, so many are paying child-rearing expenses, such as college tuition, much later into their lives. On the other hand, they are the largest generation in U.S. history, and they are the wealthiest.
Although some fundraisers worry that they'll never match the generosity of the generations that preceded them, Tom Waters, vice president of philanthropic services at the Community Foundation of Sarasota County, is bullish on boomers. The World War II generation, he says, "is a very special generation that saw need firsthand." With the baby boomers, "compassion grows a little more vicariously, but the potential for it is enormous."
According to research compiled for Sarasota/Manatee BUSINESS by John Havens of the Social Welfare Research Institute at Boston College, today baby boomers possess about the same share of the country's wealth (42 percent) as the World War II generation does. They also contribute about equally when all charitable contributions are analyzed-boomers contribute 39 percent of charitable contributions and the WWII generation contributes 38 percent of all donations. Still, considering their numbers-boomers comprise 80 percent more households than the WWII generation does-boomers fall short, contributing only 58 percent as much as their parents did in 2000.
Donor-advised funds, which allow the donor to decide on where his or her money goes, are attracting the younger set by offering more control and tax advantages. "Theirs is a much more engaged philanthropy," says Waters of the Community Foundation. Social venture capital programs, in which younger, entrepreneurial donors pool their money and know-how to tackle a social issue, are making a splash in larger cities. Both Waters and Marilyn Howard of the Manatee Community Foundation see potential for similar programs in Sarasota-Manatee. "The baby boomers are interested in not only giving financial capital, but in giving intellectual capital, says Waters.
Jerry Koontz, president of the United Way of Manatee County, says workplace giving is also growing exponentially. He notes that Manatee's United Way has raised as much in the past 10 years ($21 million) as it did in its first 50 years, from 1943-1993. Both the size of the donor pool and the levels of giving have climbed, says Koontz. "In general, the generations coming along are following the example of those that preceded them. You're going to see charitable giving increase." -Kim Cartlidge
Wealth and Charitable Giving: Comparing Three Generations
Boomers WWII Generation Older than . . Born 1946-65 born 1926-45 Born before 1926
Percent of U.S. households
In 2001 43% 24% 9%
Percent of U.S. households
worth over $1 million 43% 43% 10%
Percent share of all U.S.
household wealth 42% 43% 10%
Percent of all charitable
contributions in 2000 39% 38% 15%
Percent of income contributed
to charity in 2000 1.8% 3.3% 5.3%
Annual dollars per household
to charity* $1,508 $2,627 $2,753
*Numbers include contributions to religious institutions.
Compiled with help from John Havens, senior research associate at the Social Welfare Research Institute at Boston College. Figures are based on the 2001 Survey of Consumer Finance of 4,500 households, sponsored every three years by the Board of Governors of the Federal Reserve.