Study projects historic transfer of wealth in Missouri, philanthropic group solicits donations

Jun 26, 2013

 

Credit 401(K) 2013 / Flickr

In the next 50 years, Missouri and the rest of the country will see a historic amount of money getting passed down through inheritance

“It's a remarkable time in American history,” said Don Macke, co-director of the Center for Rural Entrepreneurship, a Lincoln, Neb.-based organization that conducts transfer-of-wealth studies. “There's a substantial intergenerational, if you will, from parents and grandparents to the next generation, estate wealth being transferred. Record numbers despite all of our economic problems.”

Macke said the center has done dozens of transfer-of-wealth studies across the U.S. Earlier this year, the center completed a transfer-of-wealth study for each of Missouri’s 114 counties.

“We looked at 50 years of wealth-creating history, project 50 years into the future,” Macke said. “And so we’re looking at 100 years of time.”

And with that, the study creates profiles for each county’s wealth transfer scenarios. Using 2010 as a base year, the study shows that Boone County, for example, is currently the richest county in central Missouri with a net worth $11.5 billion. Out of that amount, the study says, Boone’s wealth holders are expected to transfer about $3.4 billion to their children.

There’s a problem, though:  

“Children are leaving the nest. Going to other states, other large cities, other countries,” said John Baker, executive director of the Community Foundation for Central Missouri. “They're taking the wealth with them. They distribute their inheritance to children who live in other places. The wealth basically leaves the communities.”

Community Foundation of Central Missouri is a philanthropic group based out of Columbia and serving mid-Missouri. With help from a USDA Rural Development grant, community foundations across the state funded the transfer-of-wealth study. 

Baker’s goal is to try and keep some of that transferred wealth in the community -- in the form of charitable giving. The foundation is asking Missouri residents to donate 5 percent of their wealth to their local community foundation, who will then invest the money.

“Often times, charitable giving in these kinds ... can result in decisions to re-energize libraries, schools, build family centers, do things with parks and recreation families, that bring young families or other persons into the community, to live,” Baker said. 

Baker believes most people would be surprised by how much their county is worth. 

“Especially how much of that is transferring over the next 10 years or over the next 50 years,” he said. “The goal is to try to get this word out to citizens of these counties. As well as a local financial professionals, city government, county officials.”

Macke with the Center for Rural Entrepreneurship suggests this knowledge of wealth is especially important for Missouri’s rural communities. 

“Often times, rural communities may see themselves as cash poor,” he said. “They don't have the high net-worth households that have the huge stock portfolio or own that large business. But what we typically find is that there’s a lot of land-related wealth, family-owned businesses. So there's significantly greater opportunity than may be perceived.”

For the full Missouri transfer-of-wealth study, go here. For more county-by-county data, go here and scroll to the bottom. 

For the study methodology, go here

For the Boston College study that became the catalyst for nationwide transfer-of-wealth studies, go here