Boomers Driving Endowment Growth
By Jackie Jacobs
Baby Boomers, born between 1946 and 1964, contribute about 43 percent of all dollars given in the United States. Seventy-two percent of them support charity, to the tune of about $61.9 billion per year.
Baby Boomers started turning 65 in 2011, marking the unofficial beginning of their retirement years. The timing could not be better for older Boomers, who are a part of the wealthiest generation in U.S. history. Generosity is at the heart of America, and two-thirds of retirees say retirement is the best time in life to give back. Increasing numbers are giving back through endowments that will benefit their most favored charities.
Seeking immediate gratification and a desire to witness the results of their largesse, some Boomers prefer to launch endowments now. Others arrange to establish endowments later on with estate assets. Some will do both — start an endowment now and add more over time or through a bequest provision.
What motivates the Baby Boomers who choose to make endowment gifts?
1. Positive Legacy
Boomers were once known as the “Me Generation.” They were crusaders. They worshiped their youthfulness and reveled in moral authority. Endowments that serve their passions, causes, and values are right up their alley. Attaching their names to such funds gives them an enduring legacy that immortalizes their optimism. The ability to influence succeeding generations and remind others of their values has great appeal. There is no substitute for youth, but the staying power of an endowment fund that exalts their idealistic values has enormous appeal.
2. Personal Satisfaction
Boomers are the generation that believed in equal rights, equal opportunity, involvement, personal growth, and changing the world. At one time, they trusted no one over 30. As mature adults they still want to make a difference. What could be more gratifying to Boomers than funds that will mirror their values for time immemorial? An unchanging characteristic about Boomers is that they will give their all for something that really makes a difference. Endowments serve that purpose.
3. A Stronger Charity
Boomers invented the fifty-hour work week. Now that they are entering retirement, they no longer believe in a “spend now, worry later” lifestyle. They fully understand that organizations are in the same boat as they are. Both need financial stability. At this stage in life, Baby Boomers can empathize with nonprofits that are forced to contend with budgetary pressures. They understand that endowments can relieve many of the financial pressures that their favorite organizations are facing. Boomer readily can connect the dots. Just as individuals must save for the future with IRAs and 401(k)s, so must charities with endowment reserves.
Never use the following words with Baby Boomers: senior citizen, retiree, aging, Golden Years, Silver Years, mature, or prime time of life. Even as Boomers are becoming empty nesters, with their kids leaving home, marrying, and having grandchildren, they do not want to be reminded of their graying hair. They still are in charge of their decisions and feel entitled to a good life. Personal gratification and public recognition are important to this generation. They respond to statements such as “you’re important to our success”, “your contribution is unique and important to us”, and “we need you.” Durability and relevancy are important to Boomers. They feel the same way about their favored causes and the endowments that help charities achieve social good.
5. Perpetuate Annual Gifts
Many donors see an endowment fund as a means to underwrite annual giving patterns. Boomers are no exception. An endowment fund of $25,000 could create an annual gift of $1,000. That’s a great way to keep giving generation after generation. Boomers overwhelming want to make an impact on the world. What better way than through endowments, also known as “forever gifts.”
There are 76.4 million Baby Boomers. They already are exerting an outsized influence on charitable giving, and will continue to do so in the foreseeable future. Once Boomers are satisfied with the cause, how it’s run, and who it helps, they will donate time and money. That’s good news for nonprofits smart enough to capture their attention.
Article appears as originally published in the Ohio Jewish Chronicle Thursday, November 10, 2016.
Jackie Jacobs is the Chief Executive Officer of the Columbus Jewish Foundation, the Central Ohio Jewish community’s planned giving and endowment headquarters.