New Study Projects Massive Wealth Transfer in Kern County, Potential Impact on Future of Local Charities
Mar 7, 2012
Kern Community Foundation announces the release of "Transfer of Wealth in Kern County," a groundbreaking study on the coming intergenerational transfer of wealth in Kern County and its potential impact on local nonprofit charitable organizations. The study attempts to answer a simple question – What would it look like if our community was able to capture just five percent of the wealth that will transfer between generations over the next 50 years for the good of Kern?
Over the next 50 years, the study estimates that the residents of Kern County will transfer $80 billion through probate estates to the next generation, representing the single largest under-developed financial resource available to support the development of our local communities. Assets will transfer to heirs who live both inside and outside of Kern County, and to pay debts and taxes. If just five percent of this opportunity was captured into community endowments – permanent funds that benefit a charitable purpose – a total of $4 billion dollars could be realized with the potential to generate an estimated $200 million to benefit local nonprofits each year.
“Kern Community Foundation believes that a healthy nonprofit sector is essential to our community’s quality of life,” said Jeffrey R. Pickering, the Foundation’s president and chief executive officer. “The findings presented in this report demonstrate an unprecedented opportunity for Kern County residents to change the game and create a charitable legacy that can make this community a better place to live, to work and to visit now and forever.”
Kern County is home to approximately 1,000 registered nonprofit charitable organizations with a 501(c)(3) designation from the Internal Revenue Service. In 2010, donors gave close to $300 million in charitable contributions to support their missions, which include programs in education, healthcare, the arts, social services, conservation and faith-based initiatives. In spite of this generosity, however, 90 percent of the region’s charities hold less than twelve months savings on their balance sheets. Just one out of three organizations in operation for twenty-five years or more report having an endowment that will provide a steady stream of income to support the organization’s mission forever.
“Our community is filled with people who are very generous during their lifetimes,” said Keith Brice, Chair of the Foundation’s Board of Directors. “Our hope is that the results of this study motivate more people to make additional outright gifts to the endowments of their favorite charities, or to commit to leaving at least five percent of the balance of their estates for the good of our community.”
While the study reports on the opportunity across Kern County, the potential impact on rural communities is significant. “Many of Kern County’s rural communities, such as the Kern River Valley, face increased challenges resulting from high unemployment rates and outmigration,” Pickering said. “Many of the heirs who will inherit wealth no longer live in these rural communities. This report provides local leadership with valuable information that can be used to keep some of the coming wealth transfer local, building a future for their hometowns.”
"Transfer of Wealth in Kern County" was sponsored locally by Valley Republic Bank, and published with a grant from The James Irvine Foundation. Research for "Transfer of Wealth in Kern County" was conducted by Kern Community Foundation and the RUPRI Center for Rural Entrepreneurship, which has conducted Transfer of Wealth (TOW) studies across the United States. The first TOW study involved the statewide Nebraska Community Foundation more than a decade ago, and the most recent studies have been conducted by the San Luis Obispo County Community Foundation and the California Community Foundation in Los Angeles. TOW analysis is based on many factors, including demographic trends and current household related net worth, made up of residential real estate, investments, and business ownership. Contact information for the research team, as well as a copies of a summary report and 50-page technical report are available on the Transfer of Wealth section of www.kernfoundation.org.
Kern Community Foundation has been helping local donors and philanthropists organize and plan their charitable giving since it was established in 1999. The Foundation is a vibrant nonprofit enterprise with a powerfully simple mission of growing community and growing philanthropy. As a home for local philanthropists, the Foundation holds more than 100 named charitable funds with assets of more than $13 million, and has awarded more than $8 million in grants to improve Kern County’s quality of life.