Great Generational Wealth Transfer Underway

Tips for donors who want to be faithful stewards

If you don’t live day-to-day in the world of finance or philanthropy, you might not have heard of the Great Generational Wealth Transfer. It’s the notion that in the next 20 or so years, as much as $90 trillion will transfer from the current generation that holds these assets to the next generation.

Transferring this money from one generation to the next requires skill if you want the money to be a blessing and not a burden to the next generation. Industries have grown to help shepherd this money from one generation to the next. Financial planners, philanthropy consultants, foundations, and others are helping to meet this need – and take a sliver of that $70 trillion for themselves. Global banking giant HSBC runs “bespoke conventions” designed for millionaire families to help both generations prepare for the wealth transfer in their immediate future.

The Christian world has its own version. Generous Giving’s Celebration of Giving Conference, which took place this week in Austin, encourages high-capacity families to become joyful and radical givers. I’ve been to a couple of these conferences, and they are inspirational and helpful. In fact, MinistryWatch has identified a number of people from those conferences that are now a part of our “Generous Living” series of stories. (You can find recent examples here and here.)

The Great Generational Wealth Transfer has huge implications for Christian ministries, and most of the larger ministries know that. Most colleges have fundraising professionals who are focused exclusively on what they often call “legacy giving.” But since the mission of MinistryWatch is to serve donors, here are a few suggestions for those sitting on the other side of the table from the fundraisers.

Do your research. I recently went to the grocery store and saw a woman with an app on her phone that helped her shop for cereal. Lots of donors spend less time researching the organizations they give to than this woman spent researching breakfast cereal. MinistryWatch provides a database of the largest ministries in the nation, with lots of free data at your disposal. As a friend of mine often says (with a touch of irony), “We live in the future now. We can have nice things.” We may not live in the future, but we do live in a world where being uninformed is not an excuse. Dig in, ask tough questions, and give wisely.

Have clear goals. Many donors, including Christian donors, give ineffectively because they do not have clear goals. Frederick Buechner once said, “The place God calls you to is the place where your deep gladness and the world’s deep hunger meet.” Buechner meant this as a guide for life and vocation. It is also a great principle to keep in mind as you clarify the goals of your charitable giving.

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Resist endowment and foundation giving. My wife and I have a donor-advised fund (DAF). It’s a great tool. But I have discovered that – if I’m not intentional – I’ll put money (or, more often, appreciated stock) in our DAF and the money will just sit there…for weeks, months even. I’m not alone. The total amount of money in DAFs grew from $70 billion in 2014 to $251 billion in 2023. Money is going into DAFs far faster than it is going out.

For foundations, this trend is even more pronounced. In 2024, foundations held a record $1.55 trillion in assets. The law requires foundations to give away only 5 percent of their assets. That means a lot of money is sitting around doing nothing but paying generally highly paid foundation staffs.

Foundations and DAFs can be helpful tax planning tools (see below), but current law makes it far too easy to abuse these tools, to turn them into nothing but tax planning tools, and not instruments of generosity. So use DAFs and foundations, but don’t abuse them. (For more on this topic, click here.)

Be transparent with your family. A recent Bank of America study of high-net-worth families found that the younger generation and the older generation often don’t agree on the importance of philanthropy and charity. A conversation about charitable giving goals won’t always bring the generations into full agreement, but they are a great opportunity to both teach and learn, to speak and to listen.

Give to make a difference. Even relatively small gifts can make a huge difference to a ministry if they are given to the right project at the right time. The vast majority of gifts to charity are less than $100. The average gift in 2023 was $85.30. Most families give less than $1000 per year to charity, and that includes their church giving.

So if you give $1000 to a ministry, you immediately become one of a ministry’s top givers. If you are contemplating a significant gift to a ministry, contact the ministry. Request a meeting or a phone call to discuss the organization’s plans. You will feel more connected to the ministry, and you might learn of a need you can meet or a problem you can solve that you wouldn’t know about merely by looking at the website. In all your giving, strive to give in ways that are not merely transactional, but transformational.

Understand tax implications. Jesus teaches to render to Caesar what is Caesar’s, but to render to God what belongs to God. We should take care not to “over-render” to Caesar. Citizenship in a great country like the United States has its privileges, and taxes are one of the ways we pay for these privileges. But no one should ever apologize for legally minimizing one’s tax burden. Deploying the maximum amount of funds possible to charity is another way to make a positive difference for our neighbors, our communities, and our country.

Give while you live. Here at MinistryWatch, we believe in the old saying, “Give while you live, so you know where it goes.” That saying should inform not just your “legacy giving,” (the money you leave behind), but also current giving. Anyone who has ever heard the phrase “the time value of money” can understand that a dollar today is worth more than a dollar in the future. With inflation, it might be worth much more than it could earn simply drawing interest in a DAF or endowment or foundation. Plus, money given TODAY helps people TODAY. You can change lives TODAY. You can reduce suffering TODAY. You can share the Gospel TODAY. Why would you want to wait?

Give generously. This is perhaps the most important piece of advice I can give. It’s not your money. You are merely a steward of it for a short time. As the Parable of the Talents teaches us, if we don’t deploy that money, it will not bear fruit. Find faithful, fruitful ministries, and give to them generously, knowing that the reward for your actions will be the words, “Well done, good and faithful servant.”