What is expected to be one of the largest transfers of private wealth in a major American urban area over the next fifty years is already under way in the Los Angeles region, a new report commissioned by the California Community Foundation finds.
The report, The Future of Philanthropy in Los Angeles: A Wealth of Opportunity, projects that by 2020, $114 billion will have been transferred from older to younger generations living and working in Los Angeles County, and that a total of $1.4 trillion will change hands by 2060, when the members of Generation Y — some 70 million people, almost as many as the baby boom generation — will have started to retire.
Prepared by the RUPRI Center for Rural Entrepreneurship, the report is based on foundation research and wealth transfer forecasts in eight geographic areas of Los Angeles County. According to the report, the region is already starting to experience a wealth transfer that is largely driven by the growth in personal assets among entrepreneurs and immigrants. At the same time, the report suggests that the gap between the region's affluent and poor will continue to widen; currently, 38 percent of households in the county have no transferable net worth.
In releasing the report, CCF also announced that it has launched a blog, Giving In LA, to track trends, issues, and challenges associated with the transfer and to help area nonprofits take advantage of the intergenerational transfer of wealth as it unfolds.
In a post on the blog, CCF executive vice president and COO John Kobara wrote: "There are many issues raised by this new report....But chief among them is our general lack of preparedness for the growth in wealth and transfer of wealth that are being forecast. I think L.A. may be better prepared for disasters than any anticipated good that is coming."