Imagine for a moment, if there was over $42 million available every year for programs and services in northeast Michigan. What could we do for our communities? What could we improve? What could we preserve? What might that mean for northeast Michigan? If every person in the nine counties served by CFNEM and its affiliates left just 5% of their estate in and andowed fund at the Community Foundation, it would mean $42 million a year for our communities. The scenario is very real, and the time to act is now.
The United States is in the midst of the largest transfer of wealth, likely in its history. As the Baby Boomer generation ages, they will pass over $67 trillion in assets to their Generation X and Millennial children between 2007 and 2061 according to a 2014 study from Boston College. $16.8 billion is projected to change hands in northeast Michigan alone. And while these are estimates, those estimates are rather conservative.
While reading numbers can be a bit, well…numbing… in this case the numbers you’ll see are crucial in understanding what is at stake for northeast Michigan should all of that wealth leave our communities.
With most estates in the U.S., the vast majority of assets go to heirs. For generations, people lived their entire lives close to their birthplace and as wealth passed from one generation to the next, most stayed in the same county. This is no longer true… and once the wealth leaves our communities, it may never return.
The Community Foundation for Northeast Michigan (CFNEM) hopes to secure at least 5% of the expected $16.8 billion, ideally for Community Impact Grants through CFNEM’s Community Endowment Fund. Strategically, this fund allows us to most effectively meet the needs of our community to truly enhance all that northeast Michigan has to offer.
To help paint the “numbers” picture, currently the Community Foundation and its three geographic affiliates award approximately $1.85 million annually in grants and scholarships throughout the nine counties served. For Community Impact Grants, that number is around $155,000 per year. Five percent of the estimated wealth in our counties would amount to just over $138 million by 2050. If that number were preserved locally in the form of endowed funds, it would mean the Community Foundation could award almost an additional $42 million in grants for our community EVERY YEAR. $42 million!
Imagine the impact that $42 million annually would have in northeast Michigan. Within a decade, it could mean improved health and human services, new arts and cultural endeavors, increased recreational attractions and entrepreneurial investment—resulting in a better quality of life for everyone. That’s what’s at stake here.
To break those numbers down a bit further, here’s how that $16.79 billion is divided among our service area:
Now that you know the numbers, what can be done to ensure that a portion of the assets are secured for northeast Michigan’s future?
Designate retirement accounts and insurance policies
Retirement accounts and insurance policies are excellent vehicles for planned giving. Both can be designated to charity without modifying an existing estate plan. IRAs and 401(k)s may be the best asset to earmark for estate giving since they can be highly taxed when given to heirs, losing up to 70% of their value in some cases.
Tweak your current estate plan
Often times, people feel they need to have a large estate in order to be able to make a difference for a local nonprofit, or even to have a will at all. In truth, it is incredibly simple to just earmark a percentage of your entire estate, regardless of size, for the benefit of a cause near to your heart. In fact, a number of the Community Foundation’s Legacy Society (link) members have done just that. Whether their estate is worth $10,000 or $1 million, a percentage value of their estate is designated for the Community Foundation.
Consider your own legacy
The Community Foundation provides donors with a simple, powerful and highly personal approach to giving so their gifts do good works within the community, forever. It also is a wonderful way for you and your family to leave a legacy through a fund with your name, or the name of a loved one on it. Your gift or establishment of a new fund can work smoothly in conjunction with an already existing fund, or can be used specifically to address an issue about which you are passionate.
Contact your professional advisor or estate attorney
They can help you determine a way to give back to your community, while making sure your heirs and your community can benefit from your decisions. Be sure to mention the Community Foundation if you are interested in making it, or any local nonprofit a beneficiary of your estate, funds or insurance policies.
Contact the Community Foundation
We want to help you make a gift that is meaningful to you and your family, and also one that can have the largest impact possible on the communities we all love and cherish. Please contact us at (989) 354-6881. We would be happy to speak with you over the phone or in person simply to answer any of your questions and assist you in making the gift of a lifetime.