Baby Boomers’ Asset Transfers and Why this Matters for United Way April 2015

The current and imminent wealth transfers from baby boomers create a substantial opportunity for United Way Total Expected Wealth Transfer from Baby Boomers Expected Charitable Bequests IRA Assets in 2013 IRA Rollovers in 2013 $58.7 trillion* $6.3 trillion $6.5 trillion $324 billion Source: Chronicle of Philanthropy and “Evolution of the Retirement Investor 2014” from Cerulli Associates *Chart not to scale 2 United Way’s $10 billion in network community resources should be achievable by 2024

For context, total charitable contributions in 2013 were $ billion with individuals and major donors comprising nearly 90% of giving *in billions, all figures are rounded About half of foundation giving came from family foundations Source: Giving USA, Annual Report, United Way’s “market share” at $10 billion would be less than 3% of annual giving

Bequests, foundations (including family foundations) and individual giving increased in Source: Giving USA, Annual Report, 2014 Percent changes in giving by source, (in current dollars) Individuals Bequests Foundations Corporations 4

55 Planned gifts of bequests have increased at a faster rate than corporate giving Source: Giving USA, Various Annual Reports, Most Recent Data from

Baby boomers are retiring in substantial numbers with the median boomer due to turn 65 in 2017 Source: US Census Data,

United Way needs to adjust its strategies to keep Baby Boomers actively engaged in our work as they retire 17 percent of baby boomers have already retired For the next 18 years, 8,000 Americans will turn 65 every day –About a quarter million every month Source: AARP 7

8 As Baby Boomers are leaving the workplace… Median baby boomers turn 65 Percent of US Population in the Workforce 8

9 They are taking their money with them! Number of households (in millions) Wealth distribution by number of households (as % of $ 29 trillion) Under to to to and over Almost half of the wealth in the U.S. is controlled by retirees or individuals likely to leave the workforce in the next 10 years 100% = Wealth of $29 trillion 101 million households Age: 9 % % % % 6%

United Way has an immediate challenge – many of our donors are in or near retirement – so engaged conversations are needed now Median Age = 37Median Age = 49 US Census Population Estimate United Way Donors Source: 2012 National Phone Brand Tracker Study 10

Baby Boomer Engagement Endowing Donor’s Philanthropic Vision $10M Roundtable Gifts Endowing Tocqueville Gifts $200,000+ Tocqueville Legacy Circle Gifts Reducing Gifts with Reduced Retirement Income “Step-down” Tocqueville Society “Step-down” Tocqueville Society Guaranteed Income Stream in Retirement Gift Annuity Donor Goal UW Vehicle Baby Boomer engagement strategies should be actively pursued by United Ways 11

Planned giving appeals to donors at different stages in their lifecycles High earning younger donor (middle aged child) receives charitable deduction for gift now Retired parents receive guaranteed income stream for life High earning younger donor (middle aged child) receives charitable deduction for gift now Retired parents receive guaranteed income stream for life Baby boomers can secure income for future retirement Donor maximizes tax deduction during pre-retirement high earning years Begins annuity income at retirement Baby boomers can secure income for future retirement Donor maximizes tax deduction during pre-retirement high earning years Begins annuity income at retirement Retiree can enjoy guaranteed income for life Retiree receives immediate tax deduction for gift Retiree can enjoy guaranteed income for life Retiree receives immediate tax deduction for gift Current Retirees Baby Boomers Soon to Retire Younger Donors Ensuring Income for Baby Boomer Parents Example: Charitable Gift Annuities 12 In each case, United Way receives the charitable residuum within one month of donor making gift (not at donor’s death)

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