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TRANSFER OF WEALTH PROJECT |
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Transfer of Wealth Project
SECURING OUR FUTURE
The power of giving together
In 50 years, $13.09 billion is expected to pass from one generation to the next just in Tazewell County ($1.35 trillion in the State of IL). In just 10 years, $1.74 billion of wealth will have transferred in Tazewell County.
This tremendous transfer of wealth has the capacity to change the course of Tazewell County communities, via personal bequests to community foundations. For instance, if only 5 percent of this Tazewell county wealth was earmarked for charitable endowment, the resulting nearly $87.02 million would generate $4.35 million every year for local community projects and priorities across the county forever.
This study helps us understand the size and timing of the transfer of wealth across Illinois. There is a lot of potential for individuals to help our community become an even more special place to live, work and do business. Much of this "hometown" wealth is currently invested in family homes or farms, retirement accounts and other appreciated assets and may be heavily taxed (These assets can lose up to 70% of their value.) if given to heirs, which many families may not know. However, if just a small portion was donated to a community foundation, a community would enjoy better schools, parks & recreation, arts & cultural programming, economic development and more.
New research commissioned by community foundations projects an unprecedented transfer of wealth from the World War II generation to the baby boomers and then from the baby boomers to the next generation. The research is based on a comprehensive study of the transfer of wealth in Illinois that was commissioned by the W.K. Kellog Foundation and conducted by the Center for Rural Entrepreneurship. The Donors Forum, as the premier resource on philanthropy in Illinois, served as the IL partner in the study and shared detailed results of the report on Friday, November 2 with 25 Illinois Community Foundations (including the Morton Community Foundation) that helped fund the study.
With most estates in the U.S., the vast majority of assets go to heirs. For generations, people lived their entire lives close to their birthplace and as wealth passed from one generation to the next, most stayed in the same county. This is no longer true? and once the wealth leaves our communities, it may never return. Many individuals have already named local charities as benefactors in their estates. Consider designating a portion of your estate, 401(k), IRA account or life insurance policy to the Morton Community Foundation, an endowment that will ensure Morton enjoys the long-term benefits of this one-time opportunity.
Charitable endowments are carefully invested to last forever and grow over time. The principal is never spent. A portion of the earnings from the fund is paid out in grants to address the most pressing community needs. Each year, an endowment of this size could generate significant dollars for community projects and priorities?forever.
If the community is behind this, generous donors could build funds that would invest hundreds of thousands of dollars in cumulative grants over the next 10 years and $millions over the next 50 years. Think about what those dollars each year could do for our community. Within a decade, it could mean improved health and human services, new arts and cultural endeavors, increased recreational attractions and entrepreneurial investment resulting in a better quality of life for everyone.
Retirement accounts and insurance policies, says the Community Foundation, are excellent vehicles for planned giving. Both can be designated to charity without modifying an existing estate plan. IRAs and 401(k)s may be the best asset to earmark for estate giving since they can be highly taxed when given to heirs, losing up to 70% of their value in some cases.
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