Although they have traditionally made up a relatively small part of the overall population, America’s retirees over 65 have been a reliable and important philanthropic force for generations. A new study by Merrill Lynch in partnership with Age Wave, entitled Giving in Retirement: America’s Longevity Bonus, reveals that trend should continue and accelerate over the next 20 years, thanks to baby boomers.
According to the study, record numbers of people will reach the age of 65 over the next two decades, and they are expected to enjoy better health and longer lifespans than previous generations. Consequently, America’s nonprofits are likely to see a boom in philanthropic behaviors such as giving and volunteering.
Boomers have a lot to give
The 65 and older mature population has both the greatest amount of discretionary time and the highest net worth and savings of any age group. They are also healthier than any prior generation of retirees and are seeking to redefine retirement and social relevance during their retirement years. Studies have shown that this mature group is more likely to give their time and money to charity—and give a higher average amount—than any other demographic.
With the size of the 65+ age group increasing at the rate of 10,000 people per day, population trends should provide a natural boost in charitable giving over the next 15 to 20 years. In fact, the Merrill Lynch report projects a 57 percent increase among the 65+ population between 2016 and 2035.
How and why boomers give
Almost 70 percent of surveyed retirees report that their generosity is an important source of happiness. Those who give and volunteer are more likely to report a strong sense of purpose and high self-esteem and feel happy and healthy. This is not unexpected, as many studies have shown that giving and volunteering have a positive correlation with lower rates of depression, blood pressure and mortality (See “Charitable Giving: Good for Charities, Good for Donors,” Give & Take, December 2015).
According to the Merrill Lynch study, boomers surveyed also say they plan to be more strategic, demanding and involved in how their monetary gifts and volunteer time are used. The feedback they receive, in turn, is likely to change the way they give in the future.
The longevity bonus in giving will primarily affect inter vivos (lifetime) gifts, but charitable bequests should also increase as boomers age in coming decades. Estate gifts should increase relatively gradually in the near term, reaching a new peak in 15 to 20 years when the majority of baby boomers will be in their 70s and 80s, the traditional age when bequests are received.
Increased giving now and later
As the boomer population enjoys a long and healthy retirement, nonprofits can expect these active members of society to be prolific volunteers and donors for many years. Donors who feel their contributions are valued may then take the further step of including their favorite nonprofits in a bequest. Fundraisers who take the time to carefully maintain and develop relationships with these donors over the next several decades will be the ones to reap the rewards this generation has to offer. ■
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