Legacy Building: Wealth Transfer and Family Philanthropy Insights

By Peter Heller

We’re in an era with a lot of wealth transferring going on. What does that mean? 

That means that older people with money are passing it to their adult children both while they are alive and through trust and estate planning.

How much is a lot?

It’s estimated that there are 73 million baby boomers in America, the youngest being 60 years old now and the oldest almost 80. In the next 10 years it is also estimated that whether dead or alive, these boomers will transfer to millennial and Get X heirs $16 trillion, let alone in the years after that. 

Yes, $16 trillion!!

What are the implications for nonprofits?

In general, older donors are not going to be around forever. That’s always been the case. And older donors have always passed their money to their children.

It’s the magnitude that is different now. This sea change provides both an opportunity and a challenge to nonprofits for their fundraising teams. 

There is no guarantee that your children - whether they are wealthy or not! - will have the same interests that you do. That’s the way of the world.

However, fundraisers and other nonprofit leaders would be well-served to keep these 4 principles in mind when thinking about and planning for this wealth transfer.

1. Always be donor-centric

If you’re reading this, you are probably already familiar with at least the basics of best practices in fundraising, but it’s always nice to have a refresher. Donor-centric fundraising  means that you build your relationship with the donor around what is important to them. If they are supporting your community center, museum, environmental justice organization, racial justice cause…you name it…do your darnedest to understand why. Build a genuine relationship based on an interest in who your donor is as a person and what motivates them. Focus on their impact and how together you are making the world a better place. This is the antidote to “arm twisting” or transactional fundraising.

2. Get to know the parents

I always think of the parents (the baby boomers) in a family that donates as the key to the relationship and to giving. This is the case unless they have become incapacitated in some way by age and/or health, at which point getting to know the kids (see below) is even more important. The parents are the people you probably have the primary relationship with right now. Keep that strong. Seek their advice on how to engage their kids - this is crucial.

3. Get introduced to the kids

Hey they are likely at least in their 30s, not really “kids” but you know what we’re saying. Their interests may be completely different than their parents, but if you can get to know them, you can at least learn what motivates them, what they are focusing on, and how much they wish to continue any giving. If they aren’t directly interested in your mission in terms of ongoing involvement for year to come, perhaps they will make a transformational gift to you in honor of their parents. They might move on after that, but a large gift, especially associated with a naming opportunity, would be a great way to honor their family. 

4. Engage the kids - more things to think about

Do this with the parents blessing and, sometimes, help. Find out what their interests are. Do they care about the arts, the environment, medical science, etc. like their parents do, or do they have other passions. You won’t always be able to keep the relationship going, but interests can develop based on family history and based, frankly, on you and your passion for the importance of your mission.

So how do you engage them? Invite them to your development committee or your campaign committee, perhaps to your board once you’ve gotten to know each other (no rush here). Invite them to events, seek their advice. 

Here’s the thing: If you can interest the children in your work - just one of them, probably not good to have a whole clan on your committee! - it will not only help you, but often it is a huge relief and favor for the parents who might be struggling to figure out how to introduce their kids to the importance and pleasure of philanthropy.

To wrap up, if you keep relationship building at the forefront of your thinking about fundraising, the possibilities are limitless. You will find that the work is more rewarding and can help you successfully ride the wave of wealth transfer that is happening right now.

To learn more about this author and fundraising expert, Peter Heller, visit our team page and read his full bio here.