How many people do you know that were born and raised in the Mitchell County area, but have since left for bigger cities such as Kansas City, Denver, or Chicago? When the parents of these individuals pass away, where does the family estate go? Chances are, the money in the estate that was built in the Mitchell County area will now transfer to one of these larger cities, leaving the area forever. This is an example of transfer of wealth.
Transfer of Wealth in Mitchell County
According to research from the Kansas Association of Community Foundations:
- $192 million will transfer from one generation to the next in Mitchell County by 2020.
- $9.6 million or 5 percent could be preserved in a community foundation endowment, creating over $480,000 in annual grants to benefit Mitchell County.
- $1.1 billion will be transferred from one generation to the next in Mitchell County by 2064.
The Keep 5 in Kansas campaign is designed to share the message to all Kansans of the importance of leaving a legacy for our hometowns and communities.
Transfer of Wealth Overview
Following the Great Depression and World War II, the United States entered a golden age of business growth and personal prosperity. Americans have created, invested and multiplied unprecedented wealth. Over the next 50 years, this capital- a conservative estimate of $41 trillion nationwide- will change hands.
The Center for Economic Development and Business Research at Wichita State University was commissioned by the Kansas Health Foundation (KHF) to estimate future intergenerational wealth transfer for each county in Kansas. A model initially created by Boston College was used to determine the value for total wealth in Kansas.
The study estimated that in Kansas:
- $79 billion will be transferred by one generation to the next in the state of Kansas by 2020.
- $3.9 billion or 5 percent could be preserved in community foundation endowments.
- $598 billion will be transferred in the state within the next 50 years, or by 2064.
Frequently Asked Questions
What does this mean for communities in Kansas?
This study is a very significant part of the sustainability of communities throughout Kansas. If community foundations were able to capture just five percent of the likely transfer of wealth between now and 2020, $3.9 billion would be permanently endowed. With a five percent payout rate from these endowments, $195 million would be available annually to better Kansas communities.
Why focus on a five percent transfer of wealth capture goal?
Five percent is being used across the nation because it is conservative and very achievable. It is the starting point for the future of Kansas communities and is the goal through the Keep 5 in Kansas campaign.
How accurate are the estimates and figures?
To assure a full consensus and comfort level with the resulting statistics, a review process was conducted by a technical team consisting of Kansas based economists, wealth holding experts, demographers and regional economy experts who reviewed and gave input on original data. Don Macke with the RUPRI Center for Rural Entrepreneurship provided input based on his experience with transfer of wealth in other states. Feedback from the technical team was incorporated into transfer of wealth results.
A User Advisory Team, consisting of Kansas community leaders representing the various typologies and areas of the state, who reflected a wide range of community audiences such as trust officers, estate planners, legislators and community foundation leaders, reviewed and agreed with the technical team’s conclusions.
It is important to note that the estimation of Transfer of Wealth is considered a possible future scenario for communities to consider and not a prediction or an absolute number about the future. We acknowledge that things
Why are community foundations involved in this effort?
Community foundations across the country have taken a leadership role in quantifying the transfer of wealth in our communities. One way we achieve our mission is to build permanent endowments which benefit local communities not only for today’s needs, but for the needs of the future. By capturing part of this transfer of wealth, we hope to provide sustainability to our communities for future generations.