Print
Wealth and the Commonwealth Newsletter
Center on Wealth and Philanthropy
Spiritual and Cultural Life in an Age of Affluence Wealth and the Commonwealth Newsletter Volume 8: August 2005

Contents

Center Holds Seminar on The Spiritual Meaning of Philanthropy

Schervish Participates in Charity Reform Roundtable

The Moral Biography of Wealth: Philosophical Reflections on the Foundation of Philanthropy

Schervish Featured in Merrill Lynch Whitepaper


 

Research Note:
Financial Resources and Charitable Contributions of Retired Households

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 households ($1,594).

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 contributions).

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.



Dear Colleagues:

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 systematically bring wealth holders and financial planners together for follow-up seminars.

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.

Cordially,

Paul Schervish

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 Schervish.

    Three short readings dealing with philanthropy - Maimonides's "Eight Levels of Giving," Stephen Vincent Benet's "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 - and our own - understanding of the ends and means of giving, and 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 laws, 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 moral compass.

    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
    617-552-4070


    Forward email

    This email was sent to cwp508@bc.edu, by cwp508@bc.edu
    Powered by

    The Center on Wealth and Philanthropy | Boston College | McGuinn Hall | 140 Commonwealth Avenue | Chestnut Hill | MA | 02467-3807