From Baby Boomers to Gen Beta: The $75 Trillion Opportunity
I recently read that now that we’re in 2025, we are in a new generation.
The kids today will be part of Generation Beta. I don't really understand how the naming convention gets defined before the kids are even born. But given that the past several generation names (Generation Alpha, Gen Z, and Gen X) are so basic and simple, I guess those defining generations just couldn’t wait.
But what about Millennials (or technically Gen Y)? I guess our generation was unique due to the new millennium as a period in which so many of us matured.
Hard to believe it’s been 25 years since the Y2K panic, the hanging chads of the U.S. Presidential Election, and my Bat Mitzvah (Sweet Susan was my theme and yes, there were doctor pants as the giveaway).
But back to generations, there was also the creatively named Silent Generation and Lost Generation due to global events (The Great Depression, War, etc.) that defined those groups.
And then of course, who can forget about the Baby Boomer generation? This extremely powerful, large, and wealthy generation.
They are retiring and passing the torch, leading to generational changes in workplace leadership (read more here) and also have very distinct needs when it comes to their giving (read more about how the different generations think about giving here).
So with these changes all happening at the same time, the need for nonprofits to prioritize planned giving now is more important than ever.
Why??
1) The Great Wealth Transfer
We are in the midst of the greatest wealth transfer between generations the United States has ever seen.
Some estimate that as those pesky baby boomers retire and pass away (who currently hold the largest percent of the wealth in this country), we’re going to see an estimated $59 -75 Trillion transfer between generations.
A lot of that will go to heirs, some will go to taxes.
BUT A LOT CAN AND WILL GO TO CHARITABLE ORGANIZATIONS.
2) Aging Donors
Do a quick exercise for me. Check out your donor database. Review the top 50-100 largest individual donors. Estimate their ages and take the average.
Is it over 50? 60? 70? 80?
Ya. I know.
Younger donors are not giving nearly at the same levels as older donors. And, their trust in institutions – including nonprofit organizations – is on the decline.
Planned giving is an opportunity to continue receiving support from (I’m presuming) your largest donors when they are no longer able to make their annual donations.
3) Financial Stability
Is your nonprofit interested in financial stability?
What about predictable income?
Planned giving provides your nonprofit the assured resources so your organization can pivot and change as needs arise, whether it’s a global pandemic, leadership transition or some other unpredictable event, your nonprofit COULD have the dedicated income to protect you throughout whatever may arise.
SO yes, planned giving really, like really, matters for your organization.
What else do you need to know to start incorporating planned giving tools into your asks and encouraging your donors to make these types of commitments?
Prioritize talking about bequests - when a donor leaves a gift in their will or trust for after their passing (Read more here) - and gifts from a donor’s retirement assets – where a donor just needs to update the beneficiary designation on their IRA form to leave a gift to your nonprofit.
Keep talking about other gifts a donor can give today – beyond cash or even recurring giving. Like…
A Qualified Charitable Distribution (QCD) from a donor’s Required Minimum Distribution (RMD) from their IRA if they are 70 ½ or older to avoid potential taxes.
A distribution from their Donor Advised Fund – money that is legally required to only go to charities. Why not ask them to recommend it goes to your nonprofit?
A gift of stock or cryptocurrency directly to your nonprofit so they can avoid capital gains taxes – and chances are, their investments have done well the past few years so this is particularly appealing.
Double check that your organization’s legal name and Tax ID are available and easily findable on your website.
Look at your long-term donors, not your oldest or biggest donors, to find your best planned giving prospects.
Be prepared with a gift acceptance policy and avoid future challenges on what to do when an unusual asset is gifted to your nonprofit.
Steward your donors who have made planned giving commitments.
Send them a special newsletter,
Invite them to major donor events, even if their annual donation does not qualify them to be invited,
Reach out to them each year on their birthday,
Continue education about ways to give, as there are new tax laws and even new assets (like cryptocurrency!), that your donors might be interested in.
Remember, your planned giving donors are often your most committed donors – so committed they want your organization to thrive even when they are no longer able to see the great work you do.
So show them you care about them too. Make sure they know how grateful you are.