While effects of the Great Recession are likely to linger for years, if not decades, households and estates in the Boston area are on track to give anywhere between $600 billion and $1 trillion to charity by 2061, a report funded by the Boston Foundation finds.
Based on research by John J. Havens and Paul G. Schervish of the Center on Wealth and Philanthropy at Boston College, the report, The Transfer of Wealth in Greater Boston: The Toll of the Recession and Prospects for the Future (24 pages, PDF), found that the recession erased some $350 billion from the $1.86 trillion they suggested would be transferred by 2055 in their original 2006 study. Even so, charities in the region could collect an estimated $627 billion in gifts between 2007 and 2061 — driven in part by a significant shift in the amount that donors plan to give during their own lifetimes.
The report found that while Massachusetts has fared relatively well during the recovery, 91 percent of the 1.7 million households in the greater Boston region saw their net worth fall in 2008-09. Households with a net worth of less than $100,000 fared especially poorly, losing 76 percent of their net wealth. At the same time, higher-income households were not immune to the effects of the recession, with the number of households with a net worth of at least $1 million dropping some 24 percent from 2007 to 2009.
The report also found that the most immediate impact of changes in lifetime giving trends can be found among people between the ages of 65 and 79, who are transferring assets out of their portfolios to trusts, family foundations, donor-advised funds, and other vehicles. While the overall value of estates distributed over the 2007-2061 period is expected to change only slightly from the estimate in Schervish and Havens' original study, that fact and increases in lifetime gifts are likely to drive overall giving higher.
"This report shows that Greater Boston's commitment to philanthropy will only rise in the coming decades," said Boston Foundation president and CEO Paul S. Grogan. "High-wealth households who were able to get through the recession with much of their assets still intact are already giving generously, but we must be smart to ensure that our policies and strategies maximize the power of that philanthropy in coming decades."