7 Things You Should Know about Seniors that You Probably Don’t

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There are seven things you should know about older Americans that just might surprise you and help you with your fundraising efforts. U.S. Trust, Bank of America Private Wealth Management published the report U.S. Trust Insights on Wealth and Worth-TMbased on its 2011 survey of Americans with an average age of 61 and investable assets of at least $3 million.

There are now approximately 5.6 million households in the U.S. with more than $1 million in investable assets, including 4.8 million with $1 million to $4.99 million and 782,000 households with more than $5 million in investable assets, of which approximately 182,000 have greater than $10 million in investable assets.

Here’s what you need to know:

Of those with net worth of $3 million or more, 40 percent do not consider themselves “rich.” They may consider themselves “comfortable” or “financially secure,” but not “rich.” So, when speaking with those who you may consider to be wealthy, consider that they may not define themselves in the same way. So, be sure to speak their language. For example, many people think that a “bequest” is something that only rich people do and, therefore, there’s a good chance that they will not think this is an option for them since they’re not rich. When talking about a charitable bequest commitment, you might be far better off keeping it simple by talking about “supporting your favorite charity through your will.”

Older, wealthy Americans believe the most important use of wealth is to ensure financial security for themselves and their families. So, when speaking with these individuals, show them how philanthropic planning can benefit them and their families. For example, a Charitable Gift Annuity can provide them with an income for life. Or, a gift of appreciated stock rather than cash can help them avoid capital-gains tax. Also, be sure that donor prospects understand that you’re not seeking all or even a large portion of their wealth. Let them know that you understand the old adage that charity begins at home. By being donor-centered, you’ll have a happier prospect who will be much more willing to support your organization.

Among older, wealthy Americans, 40 percent say they do not have an estate plan that is comprehensive. There are many reasons for this. They may simply not have gotten around to it. They may not know what their options are. They may not know what the elements are of a comprehensive estate plan. They may not know to whom to turn for assistance. This presents you with an opportunity to be of service. You can educate these people and guide them to get their estate plan in order. In the process, you’ll have the opportunity to discuss how philanthropic planning can be an effective, desirable part of estate planning. And, you will earn the gratitude of those you assist.

Only about one-third (34 percent) of parents agree strongly that their children will be able to handle the inheritance they plan to leave them. This is an opportunity for you to show parents how they can structure their estates to confidently take care of their children while also benefiting their favorite charity. Again, by being of service to prospective donors, you can ultimately help your nonprofit organization.

Interestingly, 52 percent of older, well-off Americans have not fully disclosed their wealth with their children. As a development professional, you can help encourage or even facilitate a family conversation about wealth provided it is something the prospective donor is interested in. And, involving the family in philanthropic decisions can be enormously rewarding for parents and children alike. Handled most effectively, you might even be able to secure another generation of supporters for your organization.

It is important to know that 19 percent of older, wealthy Americans who were surveyed do not have children. Nonprofit organizations are far more likely to secure a planned gift from an individual if she has no children. This represents an enormous opportunity for securing donations in general, and planned gifts in particular. Just remember, that while a prospective donor might not have children to plan for, she will be concerned about her own financial security and that of her spouse.

Among older, wealthy Americans, 44 percent have never discussed their philanthropic aspirations with their financial advisor. Again, this is an opportunity to be of service to the prospective donor. By encouraging the prospect to involve his financial advisor in a discussion about philanthropy, you can get a seat at the table and work with the financial advisor to help the donor to fulfill his philanthropic aspirations in an effective way. If you talk with the donor about his giving without suggesting he involve his financial advisor, you may find that the financial advisor eventually may toss a monkey wrench into the philanthropic plan. So, it’s best to suggest involving the financial advisor. If the donor does not wish to involve his advisor, at least he will know you have an interest in protecting his interest.

The more you know about your prospective donors, the more you can determine how you can be of service and, in the process, you’ll build a stronger relationship that can ultimately generate significant current and deferred gifts. One way to better understand your prospects is to read the U.S. Trust Insights on Wealth and Worth-TM report which you can download by clicking on the title. In addition, my book Donor-Centered Planned Gift Marketing contains additional demographic insights as well as a detailed review of what motivates donors and what de-motivates them.

That’s what Michael Rosen says… What do you say?

8 Responses to “7 Things You Should Know about Seniors that You Probably Don’t”

  1. Michael, this is certainly essential information for serious gift planners, so you’re performing a great service in bringing this to their attention. Of all the things you mention, it’s been my experience that the most difficult obstacle to overcome is parents’ reluctance to fully disclose their wealth to their children, which impedes comprehensive planning. I’m just wondering whether that has also been your experience.

    • Jeff, thank you for sharing your thoughts. I agree that parents are often reluctant to fully disclose information about their wealth to their children. They are also often reluctant to share their philanthropic plans with their children as well. Right now, I have very personal experience involving both those points. My elderly father-in-law has four daughters. He never talked about his wealth with his children, or even his wife. When he fell ill not long ago, my wife began making inquiries to her parents about their estate plans. She discovered that they had a rudimentary, one-page will. It took a great deal of coaxing before her father finally agreed to allow her to help him put together a proper estate plan. Yet, even with his agreement to involve her, he still is trickling out the necessary information. I finally spoke with him last week, and now we’ve scheduled a family meeting for next month to discuss his plans.

      So, why are so many elderly folks reluctant to discuss their financial position, philanthropic aspirations, and estate plans with their children? I think there are a number of issues involved. People like my father-in-law are from a generation that believes in keeping such matters very private; it’s how they were raised and is probably a residual result of Great Depression thinking. Because this generation was reluctant to ever discuss financial matters, their children may be ill equiped to handle financial issues or the parents might simply not know that their children have the necessary knowledge and skills to properly manage finances. Another reason some folks don’t disclose their wealth to the children is because they don’t want their children to anticipate a large inheritance and, in so doing, not be amibitious themselves. Older folks also don’t want their children circling like vultures or arguing about what will be done with the parents’ estate. In other words, many older, wealthy Americans think financial matters are private, and that it is easier or better that children don’t know the situation. Of course, this presents great challenges to development professionals but also terrific opportunities.

      I’m less clear about whether these same attitudes will be held as firmly and widely by Baby Boomers as they are by the Greatest Generation. Does anyone have any thoughts about that?

  2. Michael, I want to thank you for quick summary of the report and your analysis. Your practical suggestions on how charities can truly be more donor-centered to better serve such people and foster more philanthropy are remarkable. Thank you!

  3. Hi Michael, I’ve enjoyed your comments and defintely want to read your book. A CDO for more than 20 years with lots of hands on planned giving experience, I now work for Virtual Giving — Planned Giving.com and we have developed our marketing approaches around donor-centered concepts. We are always trying to improve our knowledge of how best to serve our clients. On the question of whether Baby Boomers will hold the same attitudes on privacy as the Greatest Generation, I believe we are more open to tapping the expertise around us on financial planning matters and perhaps feel more confident in our abilities to filter the advice we receive. I believe our children, those 25 – 40+ years old, are in some ways less prepared than we are, but much more willing to ask questions, so in the end they will surpass us in being conversant on financial topics. This is anecdotal, but I am sure that someone is studying the topic!

    • Geoff, thank you for your comments and for sharing your insights which are in-line with some of the attitudes described in the U.S. Trust report. Despite some of the negative media articles (i.e.: Los Angeles Times) inspired by the U.S. Trust report, I’m actually optimistic. The report reveals many ways in which we can help our prospects and, in the process, help our organizations. As for my book, Donor-Centered Planned Gift Marketing, I’m glad to know that you want to read it. Here are five good reasons you should follow through and check it out: 1) It’s full of useful information, some that might be new ideas for you to share with your clients. 2) It’s received high-marks from folks like Frank Minton, PG Calc; Tanya Howe Johnson, Partnership for Philanthropic Planning; Gerry Lenfest, philanthropist and member of the Giving Pledge; and many others. 3) The book has been recognized by the Association of Fundraising Professionals when I was presented with the AFP/Skystone Partners Prize for Research in Fundraising and Philanthropy. 4) The book has been placed on the official CFRE International Resource Reading List. 5) This is perhaps the most important reason for you to read my book: Viken Mikaelian, your boss, contributed a significant amount of terrific material to the book. You’ll have to let me know what you think of the book, particularly Viken’s contributions, when you’ve read it. 🙂


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