Center on Wealth and Philanthropy
Wealth and the Commonwealth Newsletter      VOLUME 31       May 28, 2014
For generous support of the Center's initiatives, we are grateful to 
  The Wieler Family   Foundation


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May 28, 2014
U.S. Wealth Transfer Estimate of $59 Trillion

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Center on Wealth and Philanthropy 
Boston College,
142 Beacon Street, Chestnut Hill, MA  02467

Dear Friends and Colleagues:

We are pleased to announce the publication of the just-released landmark study by the Center on Wealth and Philanthropy,  A Golden Age of Philanthropy Still Beckons:  National Wealth Transfer and Potential for Philanthropy, which updates research we conducted on wealth transfer in 1999.  The Dakota Medical Foundation and Impact Foundation of Fargo, N.D., commissioned this new study to inspire greater  philanthropy and to elevate the importance of planning to help families and individuals direct more of their wealth to causes about which they are most passionate.

Our research on wealth transfer and charitable giving carried out by the Center's Senior Research Associate, John J. Havens, revealed that an estimated $59 trillion - divided among heirs, charities, estate taxes and estate closing costs - will be transferred from 116 million American households from 2007 to 2061 in the greatest wealth transfer in U.S. History.  This $59 trillion significantly exceeds our prior estimate of $41 trillion contained in the 1999 study, Millionaires and the Millennium:  New Estimates of the Forthcoming Wealth Transfer and the Prospects for a Golden Age of Philanthropy.  The $59 trillion (in 2007 purchasing power) was generated by an updated and expanded Wealth Transfer Microsimulation Model that incorporated the most recent data from the Survey of Consumer Finances from the Federal Reserve, the most recent mortality rates from the Center on Disease Control, the most recent estate tax data from the Internal Revenue Service, and other relevant parameters available at the time of the study in 2011.   We modified the wealth transfer model to take account of (a) the decline in household wealth during the 2008-2009 recession, (b) the growing trend to transfer wealth during the lifetimes of wealth holders (through trusts, for example) rather than through estates upon the death of the wealth holder, and (c) the revised composition of wealth holders' portfolios in later life.

Our estimates highlighted in this report are based on a 2% growth scenario and, as such, are conservative and probably represent the floor rather than the ceiling of what is in store for philanthropic giving.  I believe the most important implication of the study is that channeling these resources into effective outcomes will allow us to make the greatest inroads in history on solving --not just attending to-- our nation's and our world's most pressing problems and prospects.

We are grateful to The Dakota Medical Foundation and Impact Foundation, both of North Dakota, as sponsors of the research contained in these reports.  
Please contact me if you would like additional information or have questions regarding our research.


Paul G. Schervish

This is the report by CWP researchers, John J. Havens and Paul G. Schervish, which documents the prediction of wealth transfer to American estates from 2007-2061 and the amount of charitable dollars that will be distributed through final estates and lifetime giving.  The study also highlights the importance of the rate of growth on charitable giving using 1%, 2% and 3% growth rates and their respective estimated monetary outcome.

This technical report presents the findings and describes in detail methodology and data contained within the updated wealth transfer model used for this Boston Area wealth study.