Wealth transfer could mean $313 million potential for county years ago
Research results announced this week by the Kansas Association of Community Foundations, including the Greater Newton Community Foundation (GNCF), projects that by the year 2020, more than $313,438,049 will transfer from one generation to the next in Marion County. When considering a 50-year time frame, this wealth transfer is estimated at $1,610,055,274.
Following the Great Depression and World War II, the United States entered a golden age of business growth and personal prosperity. Americans have created, invested, and multiplied unprecedented wealth.
The Peabody Community Fund is an affiliate fund of the Greater Newton Community Foundation.
During the next 50 years, this capital — a conservative estimate of $41 trillion nationwide — will change hands. Most will go to heirs and taxes, but Kansas community foundations are leading an effort to ensure that a portion is preserved and invested in communities across the state.
"For generations, people lived their entire lives close to their birthplace and as wealth passed from one generation to the next, most of it stayed in the same county. This is no longer true," said Marnette Hatchett, GNCF Board of Trustees chairman.
"Once the wealth leaves our community, it may never return, so we hope to encourage residents to designate a portion of their estates, 401(k) and IRA accounts, or life insurance policies to the community foundation.
"Our conservative goal is to secure five percent of the total amount transferred in the Greater Newton area by encouraging every resident to give to local endowments with the community foundation or to local non-profits. Through this generosity, we have the potential to add more than $15 million to our local endowments by 2020, which would help us provide grants to local non-profits and ultimately strengthen our community," said Hatchett.
The Greater Newton Community Foundation holds endowments that will ensure Newton and Peabody and the surrounding communities enjoy long-term benefits of this transfer of wealth.
By definition, community foundations are tax exempt public charities created by and for the people of a local area.
Community foundations have a long history as experts in identifying and supporting long-term needs of communities, as well as acting as knowledge leaders in philanthropy, assisting individuals, families, and businesses with charitable giving decisions.
The Transfer of Wealth study was commissioned by Kansas Health Foundation and conducted by the Center for Economic Development and Business Research at Wichita State University. Future intergenerational wealth transfer for each county in Kansas was estimated based on a model initially created by Boston College. For more detailed information about the study, please visit www.kansascfs.org.
According to the study, a statewide total of $598 billion will transfer from one generation to the next by 2060 and $66 billion will transfer by 2020. Five percent of this would bring $3.3 billion to community foundations or local non-profits across Kansas.
"We would invest the dollars and use just five percent each year for community betterment projects and programs undertaken by our local non-profits," said Hatchett. "Within a decade we would be able to address challenges facing our community and enhance the quality of life for our residents."