Charity and the $85 Trillion Great Wealth Transfer

The Great Wealth Transfer

The old adage remains true: either adapt or remain behind. But why does it matter for nonprofits? Starting in 2026, Baby Boomers are officially turning 80 years old.¹ Typically ranging from the years 1946 to 1964, “Boomers” (as they are called by the younger generation) have accumulated vast amounts of wealth.² Most retirement accounts, such as IRAs and 401(k)s, encourage holders to wait until they are over 60 to withdraw money without a tax penalty, meaning much of this wealth has been sitting for years, compounding.³ To demonstrate this vast amount of capital, it is important to note that the average 401(k) balance is $249,300 and the average IRA balance is $257,000.⁴ All of this is to say that Baby Boomers have accumulated an estimated $85 trillion, but about 46.5% of this wealth is made up of U.S. bonds or stocks, meaning that nonprofits must prepare to accept a variety of new financial devices.⁷

One of the most common examples of a “newer” giving device is DAFs (Donor Advised Funds), which are irrevocable donation accounts with no payout requirement. Other examples of devices include Charitable Lead and Remainder Trusts (inverse versions of each other that place money into a tax-exempt account for donations) and CRATs (an annuity account given to the charity and then redistributed back to the donor for their lifetime, with the remainder going to the charity).⁹ Specifically going back to DAFs, they make it incredibly easy to convert non-liquid assets into donations, one of their main benefits for donors. Overall, there are a variety of different types of devices, such as these, that allow high-net-worth individuals to transfer non-liquid assets into charitable funds.

Visibility of Nonprofits

In a time of reduced government grants, contracts, and social support, this private giving will be necessary to sustain nonprofit services. However, as stated, development offices must engage in targeted donor strategies toward modern giving (and new financial devices) in order to create change. The smaller a nonprofit is, the less likely it is to have the capacity to accept these complex gifts; in 2022, the average “small-sized” nonprofit (with revenue of under $100,000) received 5 DAFs, compared to the average “large” nonprofit (with revenue of $1M+), which received 60.¹³ Now, obviously, larger nonprofits require more funding, so this disparity is expected. However, diving deeper into these concerns, in a 2024 report, it was cited that around 54% of nonprofits do not promote or pursue DAF gifts.¹¹ Clearly, this is more than a disparity, but rather a strong signal that smaller nonprofits must adopt the technology required to accept different gifts.

Furthermore, during the 2020 pandemic, a study showed that 60% of nonprofit participants had significant concerns about communication with DAF donors.¹² On the flip side, it was also reported that nonprofits that actively solicited DAFs received them at an 87% higher rate than nonprofits that did not solicit DAFs.¹⁴ At this point, there are enough metrics to show the risk that a lack of financial progression poses. Fortunately, many of the largest CRMs (Customer Relationship Management systems) will now automatically accept DAFs, but without proper solicitation or segmentation, ability does not always translate to action.

Baby Boomers & Giving

Moving to the actual “Great Wealth Transfer,” Cerulli Associates, a financial prediction firm, estimates that out of the $85 trillion being transferred by 2045, $12 trillion is reserved for charities.⁶ The generation before Baby Boomers, known as the Silent Generation, was a product of the Great Depression and therefore accumulated less wealth, giving Boomers a clear path to being the generation with the highest giving tendencies.⁷ All of these statistics are to say that Baby Boomer giving will be the largest surge we have seen so far, especially as we are reaching the years where they will be forced to take mandatory withdrawals out of their retirement accounts (required between ages 70.5 and 73).⁸ Considering the average age of a U.S. donor is 64 years old, this 71+ age range is an ideal situation for fundraisers.¹

I was able to speak with Matt Nash, a former finance executive who has worked with DAFs for many years at large financial institutions. He explained that the ultimate goal is to have integrated CRMs that makes DAF transferring seamless, but that requires nonprofits to adapt and change with time. Basically, the nonprofits who will be most negatively impacted are the smaller ones, as they have limited resources for fundraising and development. ⁵ However, Nash provided optimism. As long as fundraisers and charities invest time in learning how to accept these financial tools, clearly advertise them, and create a simple giving pipeline, they will be in a strong position moving forward.

Final Thoughts

To create a sucessful pipeline, fundraisers must build relationships, attend workshops, or strongly research the three main financial institutions that manage the vast majority of DAFs (Fidelity, Vanguard, and Schwab).¹⁶ In terms of wealth concentration, these institutions hold a combined ~$38 billion in DAFs, meaning these are the most common places to communicate and adapt DAF-accepting practices from. Furthermore, 74% of U.S. millionaires have a financial adviser, and this group also happens to be the largest donors.¹⁷ All of these statistics lead to one path: nonprofits must target these donors with complex financial devices, and they must be ready to accept a variety of assets and types of donations.

Overall, the point is clear; nonprofits and charities must modernize their financial systems to keep up with the wealthy. As most Baby Boomers have high net worths, they will inevitably have financial advisors who will explain the most tax-efficient way to donate. These ways, as explained, are through DAFs, remainder trusts, or charitable annuities. In many ways, the nonprofit sector has similar issues compared to the for-profit sector, particularly when it comes to embracing change. Even though an organization has always done things “a certain way,” it does not mean it is the best way; in this case, the best way is adapting the development sector of the organization by accepting all forms of financial devices.

References

Frey, William H. “Baby Boomers Are Turning 80: A Closer Look at the Generation That Reshaped America.” Brookings, 7 Jan. 2026, https://www.brookings.edu/articles/baby-boomers-are-turning-80/.
Frey, William H. “Baby Boomers Are Turning 80: A Closer Look at the Generation That Reshaped America.” Brookings, 7 Jan. 2026, https://www.brookings.edu/articles/baby-boomers-are-turning-80/.
Fidelity Learn. “9 Types of Retirement Accounts.” Fidelity, 13 Jan. 2026, https://www.fidelity.com/learning-center/smart-money/retirement-accounts.
Fidelity Viewpoints. “How Do Your Retirement Savings Stack Up?” Fidelity, 3 Mar. 2025, https://www.fidelity.com/learning-center/personal-finance/average-retirement-savings.
Fry, Richard. “Are Baby Boomers Wealthier than Previous Generations of Older Adults?” Pew Research Center, 11 Feb. 2026, https://www.pewresearch.org/short-reads/2026/02/11/are-baby-boomers-wealthier-than-previous-generations-of-older-adults/.
“Cerulli Anticipates $84 Trillion in Wealth Transfers Through 2045.” Cerulli Associates, 20 Jan. 2022, https://www.cerulli.com/press-releases/cerulli-anticipates-84-trillion-in-wealth-transfers-through-2045.
Fry, Richard. “Are Baby Boomers Wealthier than Previous Generations of Older Adults?” Pew Research Center, 11 Feb. 2026, https://www.pewresearch.org/short-reads/2026/02/11/are-baby-boomers-wealthier-than-previous-generations-of-older-adults/.
Internal Revenue Service. “Retirement Plan and IRA Required Minimum Distributions FAQs.” IRS, 29 Jan. 2026, https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs.
The Currency editors. “Generation Money: Baby Boomers’ Snapshot.” Empower, 16 Sept. 2024, https://www.empower.com/the-currency/money/baby-boomers-money-snapshot.
Avidian Wealth Solutions. “CRAT vs. CRUT: How to Leverage Charitable Remainder Trusts.” Avidian Wealth Solutions, 30 Apr. 2025, https://avidianwealth.com/financial-insights/articles/crat-vs-crut/.
Schmitt, Patrick. “How Are Nonprofits Approaching DAFs? Check Out the Numbers.” Instil Blog, 20 Feb. 2024, https://blog.instil.io/daf-statistics/.
Association of Fundraising Professionals. “New Study Examines How Nonprofits Perceive, Work With Donor-Advised Funds.” Association of Fundraising Professionals, 19 Oct. 2020, https://afpglobal.org/new-study-examines-how-nonprofits-perceive-work-donor-advised-funds.
Schmitt, Patrick. “How Are Nonprofits Approaching DAFs? Check Out the Numbers.” Instil, n.d., https://www.instil.io/resources/daf-statistics.
Schmitt, Patrick. “How Are Nonprofits Approaching DAFs? Check Out the Numbers.” Instil, n.d., https://www.instil.io/resources/daf-statistics.
National Philanthropic Trust. “Charitable Giving Statistics.” National Philanthropic Trust, Feb. 2026, https://www.nptrust.org/philanthropic-resources/charitable-giving-statistics/.
National Philanthropic Trust. “Top 10 DAF Charities by Grants.” National Philanthropic Trust, 27 July 2016, https://www.nptrust.org/philanthropic-resources/philanthropist/top-10-daf-charities-by-grants/.
Adam, Jamela. “Nearly Three-Quarters of Millionaires Use a Financial Advisor — More Than Twice the Rate of the Average Investor.” Yahoo Finance, 3 Dec. 2025, https://finance.yahoo.com/news/nearly-three-quarters-millionaires-financial-133008657.html.
“Cerulli Anticipates $84 Trillion in Wealth Transfers Through 2045.” Cerulli Associates, 20 Jan. 2022, https://www.cerulli.com/press-releases/cerulli-anticipates-84-trillion-in-wealth-transfers-through-2045.