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BC Study Shows $70B in Wealth Leaving New Jersey

state's nonprofits see $1.13 billion decline in charitable giving

CHESTNUT HILL, MA and Newark, NJ (February 2010) – Boston College’s Center on Wealth and Philanthropy today released a study showing that from 2004 through 2008, $70 billion in wealth left New Jersey, while the state’s charitable capacity declined by $1.13 billion.

The study was commissioned by the Community Foundation of New Jersey and the Enterprise Trust at the New Jersey State Chamber of Commerce and looked at New Jersey’s household wealth migration over the past decade, from 1999 through 2008.  The study focused on wealth as opposed to income because wealthy households are the most charitable segment of the state's communities.

From 1999 through 2003, New Jersey saw an in-migration of wealth of $98 billion and, in the same period, charitable capacity increased by $881 million.  From 2004 through 2009, the complete reversal of that trend occurred, which amounted to a total decline in charitable capacity of approximately $2 billion.

John Havens

John Havens /
BC Center on Wealth

and Philanthropy

“This study is important because it is the first time we have captured the movement of household wealth from one part of the country to another,” said John Havens, associate director at BC's Center on Wealth and Philanthropy.  “The migration of wealth out of New Jersey is substantial and significant.”
 
“What we are seeing here is that wealth – and those who hold it – are not only leaving New Jersey, but they are also not being replaced at the same rate,” said Hans Dekker, President of the Community Foundation of New Jersey.  “This has major consequences for communities across the state, especially on the nonprofit community which relies on these families to fund their critical programming.”

Wealth began to leave New Jersey around the time when a series of changes to the state’s tax structure made it less competitive for charitable families compared to neighboring states.  New Jersey’s state income taxes have risen to levels above New York, Pennsylvania and Connecticut, and there is not a deduction on state income taxes for charitable giving.

The Center on Wealth and Philanthropy (CWP) at Boston College is a multidisciplinary research center specializing in the study of spirituality, wealth, philanthropy, and other aspects of cultural life in an age of affluence. Founded in 1970, CWP is a recognized authority on the relation between economic wherewithal and philanthropy, the motivations for charitable involvement, and the underlying meaning and practice of care. For more information, visit www.bc.edu/cwp or call 617-552-4070.

The Community Foundation of New Jersey is an alliance of families, businesses, and foundations that work together to create lasting differences in lives and communities — today and tomorrow. Their mission is to connect donors to organizations, issues, and communities important to them over time, and to provide ongoing leadership and support to its partners and communities. To that end, families, businesses and foundations contribute charitable assets into funds they establish with the Community Foundation of New Jersey. Depending on the type of fund donors choose, they can 1) recommend any range of grants over any time period, 2) designate a specific issue, organization, or geographic area as beneficiary, or 3) enable the Community Foundation to determine the best use of the fund over time.

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--Patricia Delaney is deputy director of the Office of News & Public Affairs at Boston College: delaneyp@bc.edu