Research Note: Financial Resources and Charitable
Contributions of Retired
Retired households, on average, own 58% more wealth but
earn 35% less income than non-retired households. On
average, they also contribute substantially more (69%) to
charitable causes than do non-retired households.
These are the initial results of a work in progress at the
Center on Wealth and Philanthropy (CWP) at Boston College.
The work is based on data from the 2001 Survey of
Consumer Finances, sponsored by the Board of Governors of
the Federal Reserve.
Findings Regarding Retired Households
The summary table indicates that in 2001 there were 21.5
million (20% of all) households in which the head reported
being retired from one or more jobs they once held. We call
such households �retired households�. We call all other
households �not retired households.�
On average the heads of retired households were older than
not retired households (73 years vs. 43 years), less likely
married (55% vs. 62%), more likely widowed (29% vs. 4%),
and less likely employed (4% vs. 87%). The heads of some
retired households (4%) were employed even though they
were also retired.
As expected, retired households earned less income ($47
thousand) on average than not retired households ($72
thousand). However through a lifetime of accumulation of
savings and assets, they owned more net worth ($561
thousand) on average than not retired households ($354
thousand). Moreover, on average they contributed
substantially more to charity ($2,700) than did not retired
In aggregate, the retired households comprised 20% of the
households, earned as a group $1 trillion (14% of the
aggregate household income), owned as a group $12 trillion
(29% of the aggregate household wealth), and contributed as
a group $58 billion (30% of aggregate household charitable
Marital Status and Gender
The heads of most (55%) of the 21.5 million retired
households were married. These households earned 74% of
the $1 trillion earned by all retired households, owned 77%
of the $12 trillion of net worth owned by all retired
households, and contributed 54% of the $58 billion
contributed by all retired households. On average these
households had $63 thousand in income and $793 thousand in
net worth per household. They contributed an average of
$2,660 per household to charitable causes.
Unmarried women headed 29% of the 21.5 million retired
households. They earned 14% of the $1 trillion earned by all
retired households, owned 10% of the $12 trillion of net
worth owned by all retired households, and contributed 10%
of the $58 billion contributed by all retired households. On
average they had $22 thousand in earnings and $197
thousand in net worth per household. They contributed an
average of $936 per household.
Unmarried men headed 16% of the 21.5 million retired
households. They earned 13% of the $1 trillion earned by all
retired households, owned 13% of the $12 trillion of net
worth owned by all retired households, and contributed 36%
of the $58 billion contributed by all retired households. On
average they had $41 thousand in earnings and $428
thousand in net worth per household. They contributed an
average of $6,162 per household. It should be cautioned,
however, that while the data from the 1995 and the 1998
Surveys of Consumer Finances also indicate that unmarried
men in retired households contributed more on average than
unmarried women in retired households, the difference was
on average only about two times greater.
At this stage of the analysis it is not clear why unmarried
men appear to give more on average to charitable causes.
Further analysis will at least clarify the findings. The reader
should not rely on this preliminary finding until it is clarified.
All estimates were calculated by John Havens at the Center
for Wealth and Philanthropy at Boston College based on data
from the 2001 Survey of Consumer Finances, sponsored by
the Board of Governors of the Federal Reserve. Population
estimates refer to the 2001 population and dollar estimates
are in 2001 dollars.
This research note and accompanying table are posted on the
CWP web page. The
summary and its tables will be expanded into
a working paper as the analysis proceeds.
I am pleased to send you the August issue of our newsletter,
Wealth and the Commonwealth. The Center has been active
on a variety of fronts over the past few months. In January
we held our first seminar, The Spiritual Meaning of
Philanthropy, for financial advisors, wealth holders, and
academics. The seminar was a milestone for the Center and
for the University and we are exploring ways to
bring wealth holders and financial planners together for
This newsletter also includes a short summary of the charity
reform roundtable that I attended in April. The roundtable
discussion, Charity and Foundation Reform, took place at the
White House in Washington, DC, and was attended by
representatives of philanthropic organizations.
We have also included two companion pieces: "The Moral
Biography of Wealth: Philosophical Reflections on the
Foundation of Philanthropy," and a recently released article
from the Merrill Lynch Whitepaper, "Creating a Moral
Biography of Wealth: A Conversation with Paul G. Schervish."
Links to the full text of the papers are included at the end of
each article below.
I hope you enjoy this edition of the newsletter. As
always, I welcome your comments and feedback. I wish you
a relaxing and enjoyable summer.
Center on Wealth and Philanthropy
|Center Holds Seminar on The Spiritual Meaning of Philanthropy
On January 18th, financial advisors, academics, and
wealth holders gathered at Boston College's Connolly House
for a seminar co-sponsored by the Bradley Center for
Philanthropy and Civic Renewal and the Center on Wealth and
Philanthropy. Entitled The Spiritual Meaning of
Philanthropy, the seminar presented an opportunity for
participants to discuss issues of philanthropic, civic, and
spiritual significance with a like-minded group of peers.
During the course of the day, the 18 participants joined
in a series of three roundtable conversations, moderated by
the University of Chicago's award-winning scholar Amy Kass,
Center on Wealth and Philanthropy Director Paul Schervish,
and Research Associate Albert Keith Whitaker. "We wanted to
offer wealth holders and financial advisors an opportunity to
discuss topics with which they are naturally involved, but
seldom have the time to reflect on and discuss," said
Three short readings dealing with philanthropy -
Maimonides's "Eight Levels of Giving," Stephen Vincent
"The Bishop's Beggar," and John Maynard Keynes's
"Economic Possibilities for Our Grandchildren" - were
provided beforehand, and served as focal points for the day's
discussions. "These readings were chosen to stimulate
discussion about the inner spiritual dimensions of wealth and
philanthropy," said Schervish.
The seminar was a milestone for the Center. Although
researchers from the Center regularly present at similar
venues across the country, the seminar was the first of its
type to take place at Boston College. It will likely not be the
last. The Center is now considering holding regular seminars
on campus. "It is difficult to run these seminars as an
irregular one-time activity," Schervish said. "The Center is
now looking to see how we can more systematically bring
wealth holders and financial planners to the table and to
provide follow-up seminars where the issues that we put on
the table in the first session can be explored more deeply."
Ultimately, the seminar was fruitful, both for the
participants and the event facilitators. "This seminar
reminded me of the joy of giving, a reminder that will enrich
my interactions with donors," said Christine Green,
Philanthropic Advisor at Goulston & Storrs.
"I think the seminar was a great success," said Whitaker.
"Our ultimate end, of course, is to deepen other people's -
our own - understanding of the ends and means of giving,
thereby help usher in a golden age of philanthropy."
|Schervish Participates in Charity Reform Roundtable
Center on Wealth and Philanthropy Director Paul
Schervish recently joined prominent representatives of
philanthropic organizations at the White House for a
roundtable discussion on Charity and Foundation Reform. The
April 15th event centered around a series of twelve tax
reform proposals pertaining to charities, as outlined by the
White House Office of Faith Based and Community Initiatives.
These proposals, which include limitations on certain
charitable deductions and periodic review of organizations'
exempt status, are under consideration by the Joint
Committee on Taxation and the Senate Committee on
Finance. The roundtable was designed to foster discussion
and provide feedback on any proposed changes.
The general consensus was that the tax code, as it
relates to charitable gifts and foundation accounting, is so
complex that it invites creative avoidance and fraud.
Participants agreed that some sort of change was necessary,
but were unsure that new legislation would be the best
solution. Many people raised concerns that new
legislation would be enacted in areas where problems are
due to a lack of enforcement of current laws. Another
common concern was that the government, intentionally or
unintentionally, would create regulations that produce
revenue for the government at the expense of charities and
foundations. As an alternative to the creation of new tax
several people suggested that attention should be
concentrated on increasing the transparency of foundations'
and charities' annual reports, thereby allowing regulators,
donors, media, and the general public to more easily
scrutinize their activities.
"Many of the issues that have come before the Joint
Committee on Taxation and the Senate Committee on Finance
in regard to charities and charitable giving have been
longstanding, and will continue to be issues that will need
attention in the future, even if remedial legislation is
passed," said Schervish. "It is imperative to consider how a
simplified tax code could preserve charitable deductions, but
in a way that is direct and not circumscribed by the layers of
tax code that repeatedly allow and even encourage the
development of loopholes and other forms of illegal tax
avoidance. Without tax simplification, I expect to see, in 3-5
years, another set of hearings and legislative proposals to
rectify a new round of tax and foundation irregularities."
|The Moral Biography of Wealth: Philosophical Reflections on the Foundation of Philanthropy
In this essay, Schervish discusses the meaning of a
moral biography of wealth in an effort to explore the
philosophical and moral foundations of major gifts by major
donors. The term moral biography refers to the way
individuals conscientiously combine two elements in daily
life: personal capacity and moral compass. Understanding
how wealth holders approach the ultimate meaning of life as
a moral biography and their wealth as a tool for care of
others will help fundraisers to work more closely and,
ultimately, more productively with the donors they wish to
bring into a collaborative relationship in the service of their
institution's mission. Schervish's hope is that clarifying the
meaning of a moral biography will help fundraisers to
understand their donors better and to help their donors chart
a path of greater happiness for themselves, their families,
and others in the world about whom they care.
In the first section, Schervish provides several examples
from literature and the contemporary scene to demonstrate
his definition of moral biography as the confluence of
capacity and character. In the second section, he elaborates
the elements of a moral biography, which he derives from
Aristotle and sociologists who write about the workings of
human agency. In the third section, Schervish describes the
characteristics of consciousness that, when present, make
one's moral biography a spiritual or religious biography. In
the fourth section, he discusses the aspects of capacity and
moral compass that comprise a moral biography of wealth. In
the fifth section, he discusses how implementing a process of
discernment will enable development professionals to work
more deeply and productively with their donors and potential
donors. In the conclusion, Schervish places the issue of the
moral biography of wealth in a larger historical context and
encourages advancement professionals to deepen their own
moral biography by working to deepen the moral biography
of their donors.
The moral vocation for all people in all ages is to
combine capacity and moral compass into a moral biography.
But the variation Schervish wants to focus on here is the
moral biography of wealth. This is the distinctive combination
of capacity and moral compass particular to those with
sufficient financial capacity to shape and not just live within
the organizations and institutions of their day. For wealth
holders the main difference is that figuring out and living a
moral biography entails the responsibilities and rewards of
greater financial capacity and a more socially consequential
||The Moral Biography of Wealth: Philosophical Reflections on the Foundation of Philanthropy
|Schervish Featured in Merrill Lynch Whitepaper
Paul Schervish discusses the moral biography of wealth, a
spiritual process of self-examination that goes well beyond
portfolio analysis or financial tools, in the Merrill Lynch
Whitepaper article, "Creating a Moral Biography of Wealth:
A Conversation with Paul G. Schervish." For the complete
text of this conversation please follow the link below.
||Creating a Moral Biography of Wealth: A Conversation with Paul G. Schervish