Is Boomer Indulgence A Threat to Planned Giving?

From Flickr courtesy of thepeachmartini
The Los Angeles Times had a piece in September that wasn’t too flattering to baby boomers. It claimed many of them plan to spend all their money on themselves before death, cutting out their children–who the profligates feel they’ve already done enough for–in favor of travel, fine dining and other treats.

It bothered me that in all the talk about end-of-life planning there wasn’t a single mention of charitable giving. I went to the U.S. Trust 2011 survey of high net worth americans, cited in the article. The situation isn’t as grim as the paper led me to believe. I took away these points from the survey:

  • More than half the respondents (56%) have discussed philanthropy strategy with their financial advisor (slide 29). I’d like to see that number higher, but it’s not bad.
  • 80 percent either did not change or increased their charitable giving in response to the recession (slide 30). It’s theoretically possible that the 63 percent who did not change were giving zero, but that’s not likely.
  • 55 percent plan to volunteer more actively upon retirement (slide 34).

Clearly, there are boomers who will spend all their money and achieve the day-of-death zero banking balance that one woman in the article aspires to. And they’re entitled.

I’m gratified to know those folks don’t represent all the baby boomers, and that among the high and ultra-high net worth population, many intend to include nonprofits in their plans.

6 thoughts on “Is Boomer Indulgence A Threat to Planned Giving?

  1. I am not a boomer but I work specifically with an ultra high net worth client base, primarily of boomers. We are undertaking significant surverys and roundtables to better understand the psyche of our clients. The boomer generation is the first one in history that actually has significant wealth to pass down to future generations. It is a good problem that no one has ever faced before. I absolutely see no evidence of baby boomers cutting out their beneficiaries or not providing for community causes. In fact, I see the opposite. I see a majority of my clients looking to do good with their money but also provide for their families and friends. They struggle with how is the best way to do so and how to communicate their wishes to those around them. The new estate tax laws allow for high wealth boomers to free up wealth to do good and provide for families. While some are concerned about “do I have enough?” they balance that with the help of their advisers to guide them on how to live comfortably while providing for next generations. I ask you to look up the phrase “shirtsleeves to shirtsleeves.” A concept that many boomers are now trying to break.

  2. Tony, you say that the LA Times article is about Baby Boomers intentionally spending all their money and not wanting to leave their children an inheritance. First, the article provides only a few anecdotes and zero solid evidence that Boomers (in any significant number) are intentionally spending all their money before death. And, the article does not provide any evidence one way or the other about whether charitable giving is included in that “spending.”

    Second, the article does not really state that Boomers do not want to leave their children an inheritance. Instead, the article offers evidence that, for 49% of those surveyed, “it was important to leave money to their children when they die.” That means, for just over half of survey respondents, it is not “important” to leave money to their children upon death. For the 51% who do not think it important, we don’t know how many think it somewhat important. The survey result does not mean wealthy Boomers won’t a) give vast sums to their children while they’re still alive, or b) that they won’t indeed leave money to their children upon death. The article simply says its not necessarily important to half the Boomers. That’s very different than suggesting that they don’t want to leave their children an inheritance or actually won’t. In fact, the survey itself reports that older, wealthy Americans believe the most important use of wealth is to ensure financial security for themselves and their families.

    Third, and perhaps most importantly, only 5.3% of Americans over the age of 50 have included a charitable bequest provision in their will. So, I would argue, regardless of what the latest survey data tells us or does not tell us about the desires of millionaires to pass wealth on to their children, we have plenty of room to increase the charitable bequest number beyond 5.3%. By the way, the article does not really address what the wealthy Boomers desire to spend their money on. It could be trips or wine, as the article suggests, or it could also include charities. This gets to the issue you raise. While it would be interesting to know what Boomers want to spend money on and how they really feel about inheritance and charity, the good news is that there remains vast untapped potential for planned gifts.

    The survey report that inspired the article actually contains more useful information than the article provided. In my blog post, I highlight seven items from the report that are particularly meaningful for development professionals. Those interested can find my post here: http://michaelrosensays.wordpress.com/2011/09/30/7-things-you-should-know-about-seniors-that-you-probably-don%e2%80%99t.

  3. Exactly, Tony. We can do something about it (and, especially with the current economic situation, can’t afford to be passive). Your response reminds me of a phrase from Jim Collins’s 2005 publication, Good to Great and the Social Sectors: A Monograph to Accompany Good to Great. In it he noted that social sector organizations obsess on system constraints: the prevailing belief is that they can’t move ahead until the system is fixed. Collins, on the other hand, is clearly more hard-nosed and demanding: “what are you going to do in the meantime?” he implores. He wants nonprofits to retain faith that they can prevail, and challenges them with the question “what can you do today to create a pocket of greatness, despite the brutal facts of your environment?”

  4. You consider it from the cultivation side, making it an issue that nonprofits have control over. That defeats the “we can’t do anything about it” rationalization. I like it, thanks, Robert.

  5. Tony this is an interesting question: I don’t doubt Boomers are self-indulgent; that’s long been the reputation of this enormous and influential demographic. But I wonder if the problem to which you refer — selfish behavior versus a more magnanimous style of giving — stems more from the fact they haven’t been effectively engaged by the organizations that need their help. By not properly nurturing the interests of this “selfish” group, the boomers don’t know what they can do to help. This is a point I made in a 2001 article about venture philanthropy written for Museum News http://wp.me/pqoXT-X. I just want to highlight a short section in the article about our declining sense of community in which I reference Robert Putnam’s book, Bowling Alone — an excellent study that is worth re-reading, and relevant to your concerns.

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