Charity leaders see unprecedented opportunity in the largest transfer of wealth in our nation’s history as billions change hands from baby boomers to their kids over the next 40 years.
Molly Thorpe was 13 years old when she was given $500, told to research charities and pick one to get the money.
As she got older, Thorpe received more money from the family fortune to give away, lessons in philanthropy and, eventually, board-of-directors training.
Now 25, the Minneapolis advertising analyst belongs to a generation of Americans receiving the largest transfer of wealth in our nation’s history. An estimated $43 trillion is predicted to change hands from baby boomers and their parents to the younger generations over the next 40 years.
That includes an estimated $48 billion in Minnesota in the next two decades. Philanthropic leaders see an unprecedented opportunity to capture a chunk of the money to improve the lives of Minnesotans and the nonprofits that serve them.
“We think this could change the face of philanthropy in Minnesota,” said Bill King, president of the Minnesota Council on Foundations. “There is wealth in every county in this state.”
King continued, “If just 5 percent of the transfer of wealth goes to the nonprofit sector, including philanthropy, there will be major growth.”
The possibilities are exhilarating for philanthropy leaders. The number of family foundations could take off. Family donor-advised funds, which are charity funds overseen by community foundations, could soar. Nonprofits could see a boom in “legacy gifts.”
A lot of “ifs” remain, however. Do the children even want to learn about philanthropy? With careers and kids, do they have time for the volunteering and board meetings? Do they live in Minnesota and want to invest here?
“I don’t think it’s for everyone,” said Thorpe, who got her philanthropy training through one of her family’s foundations and has gone beyond giving her money to volunteering her time at a Minneapolis day care.
“But if the older generation provides information to the next generation — about their experiences, what they’re doing, the process — hopefully it will spark a continuation of the family tradition.”
Passing the torch
For decades, Minnesota’s philanthropic leaders were synonymous with names such as Dayton and Pillsbury. In 1997, key leaders formed the One Percent Club, pledging to donate 1 percent of their net worth to charitable causes.
Peter Heegaard, a retired Wells Fargo executive, was among the founding members. On a recent evening, he stood before a group of young professionals who were part of a philanthropy training program offered by the Minneapolis Foundation, and told them that the One Percent Club legacy now rested in their hands.
“Tonight, the One Percent Club is really passing the torch,” Heegaard told the 30-somethings sipping beer at the trendy Fulton Tap Room in downtown Minneapolis.
The club made a special collection to fund the foundation’s Fourth Generation training program, he said, because the younger generation is the future of giving. The club’s old guard will mentor and meet with budding philanthropists in the project. But the club has now disbanded, he said, and is making way for new leaders.
“I find their spirit and energy inspiring,” said the silver-haired Heegaard, who watched the young philanthropists present checks to three nonprofits.
Tim Manning, a 28-year-old Minneapolis lawyer in the audience, was among the graduates of the Fourth Generation program. His family has a small foundation in South Dakota, and he will become more involved in the years ahead. “I feel a great deal of responsibility,” he said, “because the transfer of wealth puts my entire generation in a position to do so much good.”