Community Foundation Legacy Society Members & Donor Advisors Tuesday, May 8, 2012 Tompkins County Transfer of Wealth Opportunities Turning a One-time Opportunity into Long-term Good Making a Difference Close to Home ] Community Foundation facts Over $3.6 million has been granted from 2000-2011 Assets are $8.3 million held in over 70 different funds *as of 3/31/2012 www.cftompkins.org Policies, Documents & Reports Transfer of Wealth Study
Tompkins County: A Profile of Socioeconomic Measures Understanding the Transfer of Wealth 2011 Transfer of Wealth Study for Select Upstate New York Counties in cluding Tompkins County 2011Transfer of Wealth Tompkins County Executive Summary Transfer of Wealth presentation to the Estate Planning Council of Tomp kins County October 2011 Deciding to Give: A Guide to Personalizing Your Philanthropy Transfer of Wealth presentation to the AFP Finger Lakes chapter May 2012 Transfer of Wealth presentation to Community Foundation Legacy Society Members and Donor Advisors May 2012 www.cftompkins.org Annual Celebration Tuesday, May 22, 2012 5-7pm Park School of Communications
Ithaca College Our keynote speaker will be Don Macke, Director of the RUPRI Center for Rural Entrepreneurship. The Center works throughout the United States and supports research, outreach, education and policy development related to rural entrepreneurship. RUPRI or the Rural Policy Research Institute is a national research and policy center focusing in multiple areas including economic development, poverty, health care, telecommunications, informatics, policy analysis and community impact analysis Don also served as the lead author of the recently completed Tompkins County Transfer of Wealth Study. COMMUNITY WEALTH Transfer of wealth (TOW) is the process whereby one generation transfers their assets to the next generation. This typically occurs at the time of death and represents the moment when charitable gifts from estate planning can result in powerful legacy community giveback. TOW most likely symbolizes the single largest under-developed philanthropic resource available to communities to support their development. OUR FUTURE Creating and growing a creative economy with technology transfer holds potential for significant sustained economic and social development. Vacation, recreational and second home development
within the Finger Lakes Region could create a second pool of seasonal or new residents with both motivation and capacity for giveback. 2010-2060 Surprising wealth transfer in next 50 years $53 trillion in United States $2.07 trillion in New York State $38.63 billion total in Tompkins County 16 14 12 10 8 U. S. 6 New York 4 Tompkins County 2 0 15 0 20
4 1 2 5 20 0 2 Wealth Transfer A possible timing scenario for the U.S., New York and Tompkins County Now is the time to have planning conversations with professional advisors Current Household Net Worth Tompkins County, New York as of 2010 Population: 101,564 $7.4 billion total $190,200 per household Estimate 2,900 High Net Worth Households Assets of >$500,000 COMMUNITY WEALTH
Yesterday For generations, people lived entire lives close to their birthplace Tompkins County wealth generally passed from generation to generation, but primarily stayed in Tompkins County Today Many of the next generation no longer live in our county Once the wealth leaves our community, it will never return Endowment gifts can be held by Community Foundation for BOTH grant making and for agency endowments A possibility for the next 10 to 50 years By encouraging conversations about planned giving into charitable endowments, Tompkins County has the opportunity to retain some portion of our local generational
transfer of wealth for grants which will benefit future generations 5% PASSING WEALTH FROM ONE GENERATION TO THE NEXT Capture of TOW opportunities could provide critically important new financial resources necessary for economic and social innovation and renewal. Three beneficiaries Heirs Taxes Community YEAR 1 YEAR 15 YEAR 25 YEAR 50 Establish an
endowment $100,000 in cumulative grants and services $200,000 in cumulative grants and services $625,000 in cumulative grants and services $100,000 gift $158,000 balance $213,000 balance $455,000 balance 2 TIMES 6+ TIMES
INITIAL GIFT INVESTED 1 TIME WHY ENDOWED GIFTS One gift, many generations, endless results assumes 5% annual payout and 8.5% rate of return Impact if only 5% of Tompkins County wealth was given as charitable gifts designated for community endowments $126.51 million in 10 years $1.93 billion in 50 years If people make a charitable gift of 5% of their estate to community endowments YEAR 10 YEAR 50 $126.5 million charitable gifts $1.93 billion charitable gifts
Range from $6.33 to $33.5 million in total grants Range from $96.58 million to $3.5 billion in total grants $145.5 million community endowments $3.94 billion community endowments LOOKING AHEAD Many gifts, many generations HISTORY & BACKGROUND o Millionaires in the Millennium (1999) o Boston College
o $41 Trillion TOW opportunity o 1998-2052 period o Transfer of Wealth in Nebraska (2002) o RUPRI Center for Rural Entrepreneurship o Completed over 38 studies in 1,100 communities TOW Studies in the United States U.S. Household Net Worth 1945-1990 $40,000 $37,500 $35,000 $32,500 in billions of real 2010 dollars $30,000 $27,500 $25,000 $22,500 $20,000 $17,500 $15,000 $12,500
81 19 Source: Board of Governors of the Federal Reserve Syste, Statistical Releases, Flow of Funds - Z.1 83 19 85 19 87 19 89 Events of the Last Decade Dot Com & 9-11 Crisis The Post 9-11 Recession Housing Bubble Financial Crisis
The Great Recession of 2008 U.S. Household Net Worth 1990-2010 Q2 $80,000 $75,000 Dot Com & 9-11 Recession $70,000 $65,000 Bubble 2 Great Recession in billions of real 2010 dollars $60,000 $55,000 $50,000 $45,000 $40,000 Bubble 1
Historic Trend Line $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Source: Board of Governors of the Federal Reserve System, Statistical Releases, Flow of Funds - Z.1 Participating community foundations: Central New York Community Foundation Community Foundation of Herkimer & Oneida Counties Community Foundation of the Hudson Valley Community Foundation of Tompkins County Methodology Suggestive Forecast NOT a Prediction
Forecast, NOT a Prescriptive Demand Base year 2010, for 50 year period 2010-60 Real NOT Constant Dollars Estimating Net Worth Step I Survey of Consumer Finance, The Federal Reserve Board Triennial Current Release: 2007 Flow of Funds, The Federal Reserve Board Current Release: December 9, 2010 Next Release: March 10, 2011 Estimating Net Worth Step II Age Characteristics Market Valuation of Property by Class Concentration of Creative Class Employment & Income Dividends, Interest & Rent (DIR) Income Proprietors Employment & Income Residential Real Estate, Owned Businesses,
Investments Scenario Building Step I Population projections Economic growth scenario Step II Wealth Release Step III Review & Verification Estimating Net Worth Step III Discounting assets Motor vehicles, art, jewelry Immigrants Group quarters population High amenities, vacation homes, retirees Economic development projects Other special cases Tompkins County Technical Advisory Committee
Suzanne Aigen, Aigen Agency Martha Armstrong, Tompkins County Area Development Fred Ballantyne, TIAA-CREF and former Community Foundation Board Mary Berens, Cornell (ret.) and Community Foundation Board Phyllisa DeSarno, Economic Planning, City of Ithaca David Kay, CARDI, Cornell University Paula Peter, The Solstice Group
Ed Marx, Tompkins County Jean McPheeters, Tompkins County Chamber of Commerce Ed Morton, Chemung Canal Trust Company and Community Foundation Board Karen Sharkey, Audrey Edelman USA Realty David Squires, Tompkins County, Director of Finance, and Community Foundation Board Frost Travis, Travis & Travis Development and Ithaca Rentals and Renovations Bryan Warren, Warren Realty Average U.S. Net Worth by Age $1,200 Mean net worth in thousands of real 2007 dollars $1,015 $1,000
$936 $800 $661 $638 $600 $400 $326 $200 $106 $0 Less than 35 35-44 45-54 55-64 65-74
75 or more Age Cohort 28 Average U.S. Net Worth by Work Status Mean net worth in thousands of real 2007 dollars $2,500 $1,961 $2,000 $1,500 $1,000 $543 $500 $350 $124
$0 Working for someone else Self-employed Retired Other not working Work Status 29 Average U.S. Net Worth by Education Level $1,200 Mean net worth in thousands of real 2007 dollars $1,098 $1,000 $800 $600
$366 $400 $252 $200 $143 $0 No high school diploma High school diploma Some college College degree Education Level 30 Median Age, 2010 45 Herkimer
41.8 40 Ulster 40.8 Putnam 40.7 Oneida 40.7 Cayuga 40 Madison Onondaga Dutchess 38.6 38.5 38.4 New York Oswego 37.7 37.2 U.S. 37 Cortland
35.3 Years 35 Tompkins 31.5 30 25 20 Percent of Group Quarters Population, 2010 14% Tompkins 12.9% 12% 10% 8%
2.0% 1.5% 1.0% 0.5% 0.0% Putnam 3.4% Tompkins 3.3% Dutchess 3.0% Ulster 2.8% Onondaga Madison 2.7% 2.7% New York
2.6% Cortland 2.5% Herkimer 2.5% Oneida 2.4% U.S. 2.4% Oswego 2.4% Cayuga 2.4% If people make a charitable gift of 5% of their estate to community endowments YEAR 10 YEAR 50
$126.5 million charitable gifts $1.93 billion charitable gifts Range from $6.33 to $33.5 million in total grants Range from $96.58 million to $3.5 billion in total grants $145.5 million community endowments $3.94 billion community endowments LOOKING AHEAD
Many gifts, many generations Everyone can be a philanthropist Presented to: Estate Planning Council of Tompkins County Community Foundation Board of Directors Association of Fund Raising Professionals Finger Lakes Chapter Possible Future Presentations: CEO group of Tompkins Chamber of Commerce City of Ithaca Planning and Economic Development Department TCAD (Tompkins County Area Development) Tompkins County Public Library Foundation Cayuga Medical Center Foundation Realtors Others????? What other groups and individuals need to hear this information? How should the Community Foundation market the TOW study results? What actions should we take to increase the likelihood of charitable endowment TOW gifts? What organizations and businesses are potential collaborators? What questions remain? How could this presentation be improved?
THANK YOU FOR YOUR GIFTS AND SUPPORT OF THE COMMUNITY FOUNDATION THANK YOU FOR YOUR TIME AND ADVICE THIS EVENING PLEASE CONTACT US WITH ANY FUTURE QUESTIONS, COMMENTS, OR MARKETING IDEAS ABOUT TRANSFER OF WEALTH OPPORTUNITIES
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