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Tompkins County Transfer of Wealth Opportunities
Human Services Coalition Forum
Wednesday, November 14, 2012
We are is a tax-exempt public charity
created in 2000 by and for the people of
Tompkins County to serve as a growing
permanent endowment and information source to support
everyone’s philanthropic action as a means of improving the quality of life for
the Tompkins County community.
fundsOver 70 Funds
1. Tompkins Today and Tomorrow Fund
• Unrestricted grant making fund
2. Field of Interest Funds • Arts and Culture• Children and Youth Fund• Crime and Sexual Assault Victims Fund• Social Justice Fund• Women’s Fund
3. Donor Advised Funds & Designated Funds
• These funds have originated to fill the philanthropic goals of individuals, families or organizations
• Nearly $3.9 million granted from 2000 to September 30, 2012
• Assets are over $8.4 million held in over 70 different funds
(as of 9/30/2012)
facts
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
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 andrepresents the moment when charitable gifts from estateplanning can result in powerful legacy community giveback.
TOW most likely symbolizes the single largest under-developed philanthropic resourceavailable to communities to support their development.
OUR FUTURECreating 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 asecond pool of seasonal or new residents with both motivation and capacity for giveback.
COMMUNITY WEALTH
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
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
2011-2015
2016-2020
2021-2025
2026-2030
2031-2035
2036-2040
2041-2045
2046-2050
2051-2055
02468
10121416
U. S.New YorkTompkins County
Current Household Net Worth Tompkins County, New York as of 2010
$190,200 per household
$7.4 billion total
Population:
101,564
Estimate2,900 High Net Worth
HouseholdsAssets of >$500,000
Today• Many of the next generation no longer
live in our county
• Once the wealth leaves our community,it will never return
• For generations, people lived entire livesclose to their birthplace
• Tompkins County wealth generally passed from generation to generation, but primarily stayed in Tompkins County
Yesterday
COMMUNITY WEALTH
Capture of TOW opportunities could provide critically important newfinancial resources necessary for economic and social innovation and renewal.
Three beneficiaries
Taxes CommunityHeirs
PASSING WEALTH FROM ONE GENERATION TO THE NEXT
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%
A possibility for the next 10 to 50 years
Endowment gifts can be held by Community Foundation for BOTH grant making and for agency endowments
6+ TIMES
One gift, many generations, endless results
YEAR 15
$100,000 in cumulative grants and services
$158,000 balance
YEAR 25
$200,000 in cumulative grants and services
$213,000 balance
assumes 5% annual payout and 8.5% rate of return
INITIAL GIFT INVESTED 1 TIME 2 TIMES
YEAR 50
$625,000 in cumulative grants and services
$455,000 balance
YEAR 1
Establish an endowment
$100,000 gift
WHY ENDOWED GIFTS
Impact if only 5% of Tompkins County wealth was given as charitable gifts designated for community endowments
$1.93 billion in 50 years
$126.51 million in 10 years
Many gifts, many generations
If people make a charitable gift of 5% of their estate to community endowments
YEAR 10
$126.5 million charitable gifts
Range from $6.33 to $33.5 million in total grants
$145.5 million community endowments
YEAR 50
$1.93 billion charitable gifts
Range from $96.58 million to $3.5 billion in total grants
$3.94 billion community endowments
LOOKING AHEAD
HISTORY & BACKGROUND
o Millionaires in the Millennium (1999)o Boston Collegeo $41 Trillion TOW opportunityo 1998-2052 period
o Transfer of Wealth in Nebraska (2002)o RUPRI Center for Rural Entrepreneurshipo Completed over 38 studies in 1,100 communities
U.S. Household Net Worth1945-1990
1945
1947
1949
1951
1953
1955
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
$0
$2,500
$5,000
$7,500
$10,000
$12,500
$15,000
$17,500
$20,000
$22,500
$25,000
$27,500
$30,000
$32,500
$35,000
$37,500
$40,000
Source: Board of Governors of the Federal Reserve Syste, Statistical Releases, Flow of Funds - Z.1
in b
illi
ons
of r
eal 2
010
doll
ars
Events of the Last Decade
Dot Com & 9-11 CrisisThe Post 9-11 RecessionHousing BubbleFinancial CrisisThe Great Recession of 2008
U.S. Household Net Worth1990-2010 Q2
Q1
Q2
Q3
Q4
Q1
Q2
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2009 2009 2009 2010 2010
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
$55,000
$60,000
$65,000
$70,000
$75,000
$80,000
Source: Board of Governors of the Federal Reserve System, Statistical Releases, Flow of Funds - Z.1
in b
illi
ons
of r
eal 2
010
doll
ars
Bubble 1
Dot Com & 9-11 Recession
Bubble 2
Great Reces-sion
Historic Trend Line
Methodology
Suggestive Forecast NOT a Prediction Forecast, NOT a Prescriptive Demand
Base year 2010, for 50 year period 2010-60Real NOT Constant Dollars
Estimating Net WorthStep I
Survey of Consumer Finance, The Federal Reserve Board TriennialCurrent Release: 2007
Flow of Funds, The Federal Reserve BoardCurrent Release: December 9, 2010Next Release: March 10, 2011
Estimating Net WorthStep II
Age CharacteristicsMarket Valuation of Property by ClassConcentration of Creative Class Employment &
IncomeDividends, Interest & Rent (DIR) IncomeProprietors’ Employment & IncomeResidential Real Estate, Owned Businesses,
Investments
Scenario Building
Step IPopulation projectionsEconomic growth scenarioStep IIWealth ReleaseStep IIIReview & Verification
Estimating Net WorthStep III
Discounting assetsMotor vehicles, art, jewelry
ImmigrantsGroup quarters populationHigh amenities, vacation homes, retireesEconomic development projectsOther 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
28
Average U.S. Net Worth by Age
Less than 35 35-44 45-54 55-64 65-74 75 or more$0
$200
$400
$600
$800
$1,000
$1,200
$106
$326
$661
$936
$1,015
$638
Age Cohort
Mea
n ne
t wor
th in
thou
sand
s of
rea
l 200
7 do
llar
s
29
Average U.S. Net Worth by Work Status
Working for someone else Self-employed Retired Other not working$0
$500
$1,000
$1,500
$2,000
$2,500
$350
$1,961
$543
$124
Work Status
Mea
n ne
t wor
th in
thou
sand
s of
rea
l 200
7 do
llar
s
30
Average U.S. Net Worth by Education Level
No high school diploma High school diploma Some college College degree$0
$200
$400
$600
$800
$1,000
$1,200
$143
$252
$366
$1,098
Education Level
Mea
n ne
t wor
th in
thou
sand
s of
rea
l 200
7 do
llar
s
Median Age, 2010
20
25
30
35
40
45
Herkimer41.8 Ulster
40.8Putnam
40.7Oneida
40.7 Cayuga40
Madison38.6
Onondaga38.5
Dutchess38.4 New York
37.7 Oswego37.2
U.S.37
Cortland35.3
Tompkins31.5Y
ears
Percent of Group Quarters Population, 2010
0%
2%
4%
6%
8%
10%
12%
14%Tompkins
12.9%
Madison7.5% Cortland
7.2%Oneida6.4%
Ulster6.3%
Dutchess6.3% Cayuga
5.7%
Oswego4.1%
New York3.1%
Onondaga3.0% U.S.
2.7% Putnam2.2% Herkimer
1.7%
Percent of Dividends, Interest and Rent Income, 2009
0%
5%
10%
15%
20%
25%
Tompkins20.08%
U.S.18.02%
Ulster17.99%
New York17.81% Dutchess
16.92% Madison16.18%
Putnam16.17%
Onondaga15.93%
Oneida15.88%
Cortland14.37%
Cayuga14.03%
Herkimer13.66%
Oswego12.05%
Population Growth2000-2010 (Annual)
-0.4%
-0.2%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%U.S.1.1%
Tompkins0.6% Dutchess
0.6%
Putnam0.5% Ulster
0.4%New York
0.3%
Madison0.1%
Onondaga0.0%
Cortland-0.1%
Oswego-0.1% Oneida
-0.1%
Herkimer-0.3%
Cayuga-0.3%
Many gifts, many generations
If people make a charitable gift of 5% of their estate to community endowments
YEAR 10
$126.5 million charitable gifts
Range from $6.33 to $33.5 million in total grants
$145.5 million community endowments
YEAR 50
$1.93 billion charitable gifts
Range from $96.58 million to $3.5 billion in total grants
$3.94 billion community endowments
LOOKING AHEAD
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?
For the very latest in Community Foundation events, grant
opportunities and donor services, visit
our website at
www.cftompkins.org
website
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