Association of Fundraising Professionals Finger Lakes Chapter Tuesday

Association of Fundraising Professionals Finger Lakes Chapter Tuesday, May 1, 2012 Tompkins County Transfer of Wealth Opportunities Turning a One-time Opportunity into Long-term Good

Making a Difference Close to Home ]

We are 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.

The Community Foundation of Tompkins County is a member of: • COUNCIL ON FOUNDATIONS • GRANTMAKERS FORUM OF NEW YORK • GRANTMAKERS FOR EFFECTIVE ORGANIZATIONS • TOMPKINS COUNTY FUNDERS GROUP • TOMPKINS COUNTY CHAMBER OF COMMERCE

Our Mission is to Encourage and Develop Sustainable Philanthropy for a Broad Range of Community Efforts by: 1. Encouraging the growth of a permanent charitable endowment 2. Making strategic grants as community investments 3. Providing donors with vehicles to make giving easy and effective 4. Serving as a community catalyst and convener to solve problems and improve quality of life

Community Foundation facts • Over $3. 6 million has been granted from 2000 -2011 • Assets are over $8. 2 million held in over 70 different funds *as of 2/29/2012

2011 Community Foundation Grants $470, 568 161 grants 1. Arts and Culture = 41% 2. Environment/Sustainability = 3% 3. Education = 8% 4. Health and Human Services = 26% 5. Community Building = 22%

www. cftompkins. org • Policies, Documents & Reports Transfer of Wealth Study – Tompkins County: A Profile of Socioeconomic Measures – Understanding the Transfer of Wealth – 2011 Transfer of Wealth Study for Select Upstate New York Counties including Tompkins County – 2011 Transfer of Wealth Tompkins County Executive Summary – Transfer of Wealth presentation to the Estate Planning Council of Tompkins County October 2011 – Deciding to Give: A Guide to Personalizing Your Philanthropy – Transfer of Wealth presentation to the AFP Finger Lakes chapter May 2012

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

16 14 12 10 8 U. S. 6 New York 4 Tompkins County 2 5 0 51 20 20 46 -2 -2 05 05 5 20 41 -2 04 0 20 36 -2 04 5 20 31 -2 03 0 20 26 -2 03 5 20 21 -2 02 02 -2 16 20 20 11 -2 01 5 0 0 Wealth Transfer A possible timing scenario for the U. S. , New York and Tompkins County

Current Household Net Worth Tompkins County, New York as of 2010 Population: 101, 564 $7. 4 billion total $190, 200 per household Estimate 2, 900 High Net Worth Households Assets of >$500, 000

LOOKING AHEAD A possibility for the next 10 to 50 years Opportunity to retain some portion of Tompkins County’s generational transfer of wealth for future generations through planned giving into charitable endowments 5%

COMMUNITY WEALTH Yesterday • For generations, people lived entire lives close to their birthplace • Tompkins County wealth generally passed from generation to generation, but primarily stayed in Tompkins County

COMMUNITY WEALTH Today • Many of the next generation no longer live in our county • Once the wealth leaves our community, it will never return

LOOKING AHEAD Two possible scenarios Tompkins County has a robust community endowment and a secure future; or, Much of Tompkins County wealth has been transferred to communities in California, Arizona, Florida and beyond.

PASSING WEALTH FROM ONE GENERATION TO THE NEXT Three beneficiaries Heirs Taxes Community

YEAR 15 YEAR 25 YEAR 50 Establish an endowment $100, 000 in cumulative grants and services $200, 000 in cumulative grants and services $625, 000 in cumulative grants and services $100, 000 gift $158, 000 balance $213, 000 balance $455, 000 balance 2 TIMES 6+ TIMES INITIAL GIFT INVESTED 1 TIME LOOKING AHEAD One gift, many generations assumes 5% annual payout and 8. 5% rate of return

Impact if only 5% of Tompkins County wealth was given as charitable gifts designated for community endowments $126. 51 million in 10 years $1. 93 billion in 50 years

If people make a charitable gift of 5% of their estate to community endowments YEAR 10 YEAR 50 $126. 5 million charitable gifts $1. 93 billion charitable gifts Range from $6. 33 to $33. 5 million in total grants Range from $96. 58 million to $3. 5 billion in total grants $145. 5 million community endowments $3. 94 billion community endowments LOOKING AHEAD Many gifts, many generations

HISTORY & BACKGROUND o Millionaires in the Millennium (1999) o Boston College o $41 Trillion TOW opportunity o 1998 -2052 period o Transfer of Wealth in Nebraska (2002) o RUPRI Center for Rural Entrepreneurship o Completed over 38 studies in 1, 100 communities

TOW Studies in the United States

U. S. Household Net Worth 1945 -1990 $40 000 $37 500 $35 000 $32 500 in billions of real 2010 dollars $30 000 $27 500 $25 000 $22 500 $20 000 $17 500 $15 000 $12 500 $10 000 $7 500 $5 000 $2 500 $0 1945 1948 1951 1954 1957 1960 1963 1966 1969 1972 1975 1978 1981 1984 Source: Board of Governors of the Federal Reserve Syste, Statistical Releases, Flow of Funds - Z. 1 1987 1990

Events of the Last Decade Ø Dot Com & 9 -11 Crisis Ø The Post 9 -11 Recession Ø Housing Bubble Ø Financial Crisis Ø The Great Recession of 2008

U. S. Household Net Worth 1990 -2010 Q 2

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

Methodology ü Scenario Forecast NOT a Prediction Forecast ü Base year 2010, for 50 year period 2010 -60 ü Real NOT Constant Dollars

Estimating Net Worth Step I ü Survey of Consumer Finance, The Federal Reserve Board üTriennial üCurrent Release: 2007 ü Flow of Funds, The Federal Reserve Board üCurrent Release: üNext Release: December 9, 2010 March 10, 2011

Estimating Net Worth Step II ü Age Characteristics ü Market Valuation of Property by Class ü Concentration of Creative Class Employment & Income ü Dividends, Interest & Rent (DIR) Income ü Proprietors’ Employment & Income ü Residential Real Estate, Owned Businesses, Investments

Scenario Building Step I ü Population projections ü Economic growth scenario Step II ü Wealth Release Step III ü Review & Verification

Estimating Net Worth Step III ü Discounting assets üMotor vehicles, art, jewelry ü Immigrants ü Group quarters population ü High amenities, vacation homes, retirees ü Economic development projects ü Other 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 De. Sarno, Economic Planning, City of Ithaca • David Kay, CARDI, Cornell University • Paula Peter, The Solstice Group • Ed Marx, Tompkins County • Jean Mc. Pheeters, 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

Average U. S. Net Worth by Age Mean net worth in thousands of real 2007 dollars $1 200 $1 015 $1 000 $936 $800 $661 $638 $600 $400 $200 $326 $106 $0 Less than 35 35 -44 45 -54 55 -64 65 -74 75 or more Age Cohort 32

Average U. S. Net Worth by Work Status Mean net worth in thousands of real 2007 dollars $2 500 $1 961 $2 000 $1 500 $1 000 $543 $500 $350 $124 $0 Working for someone else Self-employed Retired Other not working Work Status 33

Average U. S. Net Worth by Education Level $1 200 Mean net worth in thousands of real 2007 dollars $1 098 $1 000 $800 $600 $366 $400 $252 $200 $143 $0 No high school diploma High school diploma Education Level Some college College degree 34

Median Age, 2010 45 Herkimer 41, 8 40 Ulster 40, 8 Putnam 40, 7 Oneida 40, 7 Cayuga 40, 0 Madison Onondaga Dutchess 38, 6 38, 5 38, 4 New York Oswego 37, 7 37, 2 U. S. 37, 0 Cortland 35, 3 35 Years Tompkins 31, 5 30 25 20

Percent of Group Quarters Population, 2010 14% Tompkins 12, 9% 12% 10% 8% 6% Madison 7, 5% Cortland 7, 2% Oneida 6, 4% Ulster 6, 3% Dutchess 6, 3% Cayuga 5, 7% Oswego 4, 1% 4% 2% 0% New York Onondaga 3, 1% 3, 0% U. S. 2, 7% Putnam 2, 2% Herkimer 1, 7%

Percent of Dividends, Interest and Rent Income, 2009 25% Tompkins 20, 08% 20% 15% 10% 5% 0% U. S. 18, 02% Ulster 17, 99% New York 17, 81% Dutchess 16, 92% Madison 16, 18% Putnam 16, 17% Onondaga 15, 93% Oneida 15, 88% Cortland 14, 37% Cayuga 14, 03% Herkimer 13, 66% Oswego 12, 05%

Population Growth 2000 -2010 (Annual) 1, 2% U. S. 1, 1% 1, 0% 0, 8% 0, 6% 0, 4% 0, 2% Tompkins Dutchess 0, 6% Putnam 0, 5% Ulster 0, 4% New York 0, 3% Madison 0, 1% 0, 0% -0, 2% -0, 4% Onondaga 0, 0% Cortland -0, 1% Oswego -0, 1% Oneida -0, 1% Herkimer -0, 3% Cayuga -0, 3%

Per Capita Income Growth 2000 -2010 (Annual) 4, 0% 3, 5% 3, 0% 2, 5% 2, 0% 1, 5% 1, 0% 0, 5% 0, 0% Putnam 3, 4% Tompkins 3, 3% Dutchess 3, 0% Ulster 2, 8% Onondaga 2, 7% Madison 2, 7% New York 2, 6% Cortland 2, 5% Herkimer 2, 5% Oneida 2, 4% U. S. 2, 4% Oswego 2, 4% Cayuga 2, 4%

If people make a charitable gift of 5% of their estate to community endowments YEAR 10 YEAR 50 $126. 5 million charitable gifts $1. 93 billion charitable gifts Range from $6. 33 to $33. 5 million in total grants Range from $96. 58 million to $3. 5 billion in total grants $145. 5 million community endowments $3. 94 billion community endowments LOOKING AHEAD Many gifts, many generations

Everyone can be a philanthropist

George Ferrari Executive Director 309 N. Aurora Street 272 -9333 gferrari@cftompkins. org www. cftompkins. org