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after the boom

In a turbulent time, baby boomers are set to pass unprecedented wealth to younger generations

More than $84 trillion — along with values — will be handed down in the next 25 years

Boomer benefactor Swanee Hunt (right), daughter of the late Texas oil baron H.L. Hunt, met in her Washington, D.C. home with Afghani activist Palwasha Hassan. Hunt and Hassan are working to empower women in Afghanistan through Hunt’s social justice foundation.John Boal/John Boal Photography

The third in an occasional series on the future of the baby boomers.

The boomer money spigot opened last summer for UMass.

Marty Meehan, the 64-year-old University of Massachusetts president, pulled in the school’s biggest gifts ever from donors of his own generation — $175 million from investor Gerald Chan, 70, and $50 million from finance executive Rob Manning, 57, and his wife, Donna. A portion will help UMass boost its medical and nursing student diversity and redouble its work to reduce racial health disparities laid bare by the coronavirus.

“The baby boomers’ job is a long way from being done,” Meehan said. “I hope baby boomers will find a way to make the world better than they found it. And I don’t think they’ve done that yet.”

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A pandemic-era burst of philanthropy lifted charitable giving to a record $471.4 billion in 2020 and continued through this year as Americans, especially those born after the Second World War, opened their wallets as never before. Giving USA Foundation reported that environmental and civil rights groups were among those that saw funding rise the most.

But that is only the beginning. The restless generation that came of age in the ’60s and ’70s is set to lead the largest handoff of wealth in human history over the next quarter century. By 2045, Americans, primarily older Americans, will give away about $84.4 trillion — quadruple the annual output of the whole US economy — to heirs and charities, according to a new projection by the Boston research firm Cerulli Associates.

Millions who are now retiring have piled up substantial assets during their working lives, far more than previous generations, thanks in part to the double-digit gains in housing values and booming financial markets. The current bull market is more than a decade old and has continued even in the teeth of the pandemic. Today, nearly 12 million US households have enough to qualify as millionaires, a term that once meant seriously rich, but now applies to fully 8 percent of the nation’s population.

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Boomers, born between 1946 and 1964, are expected to account for nearly two-thirds of the wealth transfer in a coming era that will witness “the most dollars changing hands that this country, or any country, has ever seen,” said Cerulli Associates analyst Chayce Horton.

But that vast generational outpouring will be distributed wildly unevenly. About 40 percent of the anticipated windfall will come from households with over $5 million in assets, the wealthiest 1.4 percent of the US population. At the other end of the scale, meanwhile, one in four Americans have no retirement savings at all. As a result, bequests in the coming decades could cement and exacerbate an inequality not seen since the Gilded Age of the late 1800s.

The great wealth handoff gets underway as boomers, the youngest of whom turned 57 this year, exit the work force at an accelerating pace and turn their attention to their next acts — and an uncertain legacy.

Members of the first television generation may have danced to the thumping bass of the Rolling Stones, but they also hatched the personal computer and mapped the human genome. Yet recent years have brought a series of shocks exposing the magnitude of problems that accumulated on the boomers’ watch: racial strife, an unvanquished COVID-19 scourge, the floods and wildfires that signal climate crisis.

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The wealth handoff now unfolding can be seen as a test, not only of the generation’s largesse but of its sense of responsibility to solve problems the boomers themselves helped cause or worsen. There are signs that’s begun to happen. Outlays from charitable funding pools known as donor-advised funds surged nearly 40 percent in the past two years, a Giving USA report last month found, with grants to racial justice groups and historically black colleges climbing four-fold.

Celtics co-owner Steve Pagliuca, who started Boston Celtics United For Social Justice, laughed with guard Marcus Smart before the start of a game on Dec. 12. Jim Davis/Globe Staff

Boston Celtics co-owner Steve Pagliuca, 66, was already involved in charitable giving through Bain Capital, where he is co-chairman, and his family foundation. But after George Floyd was killed by a Minneapolis police officer last year, igniting nationwide protests, Pagliuca joined with players and managers to launch a $25 million initiative, Boston Celtics United for Social Justice, focused on economic empowerment, voting, and reforms in education, health care, and criminal justice.

“That [racial] crisis catalyzed the whole country,” Pagliuca said. “It was shocking and opened our eyes that we weren’t doing enough. The problem was even deeper than many Americans had thought.”

For plenty of boomers, imparting values is as important as channeling money to causes in a turbulent time. Young people across races and classes are committed to such issues as environmental justice and Black Lives Matter, even while skeptical of traditional institutions, including business, government, and organized religion, said Bishop John M. Borders III, 63, of Morning Star Baptist Church in Mattapan. Often they’ll look to their elders for wisdom and guidance, he said.

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“Young people want to hear from my generation,” said Borders, who’s been engaged in talks with younger ministers about their differing world views. “They want us to tell them how to survive, how to be strong. The vast majority of my congregation have no wealth to pass down. They just try to pass down their faith. They pass down their resiliency.”

Bishop John M. Borders III delivered his sermon at Morning Star Baptist Church on Dec. 19. Borders talks to congregants about handing down faith and resiliency to the next generation.Pat Greenhouse/Globe Staff

Indeed, boomers are bringing an activist spirit — and a knack for reinventing everything from work to technology to food — to the late stage of their lives and disbursal of their earthly possessions.

The wealthiest Americans are in a unique position to effect change, and some are drawing on their business backgrounds to do so in a targeted way. Institutions such as the Bill & Melinda Gates Foundation and the Chan Zuckerberg Initiative are investing heavily in research around “big ideas,” including artificial intelligence and precision medicine, with the potential to transform spheres ranging from education to drug discovery.

“I feel like many of the new philanthropists will be better at giving their money away than the government will be,” said Christina Wing, who teaches leadership and philanthropy at Harvard Business School.

Individuals and family foundations are refining an approach called strategic philanthropy, pioneered by the Rockefeller, Ford, and Carnegie foundations early in the 20th century, where donors develop programs in consultation with communities they serve and measure results.

These are philanthropists who operate more like investors in business startups, said Leslie Pine, managing partner at the Philanthropic Initiative in Boston, which advises funders. Social ventures like YouthBuild, which teaches job skills to high school dropouts, and Reach Out and Read, which brings books into pediatric care settings, were incubated in the Boston area and replicated nationally.

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By far the largest chunk of the coming wealth transfer — about 86 percent, Cerulli estimates — will flow to children and other heirs. That has the potential to fuel lavish lifestyles, but it could also set off a gusher of investments and entrepreneurial activity, along with a second wave of charitable ventures in coming years. Many in the older generation are already talking to their children about giving and even involving them in determining how to channel gifts.

Often a life passage, such as retirement or a death in the family, will cause older folks to think hard about what they want to do with their money and what values they want to convey to the next generation, said Jill Fopiano, president of O’Brien Wealth Partners in Boston.

“They’ve been wrapped up in their jobs, and retirement often coincides with children being out of the nest,” she said. “That’s when people start to search for meaning. They start to think about what difference they want to make both while they’re living and when they pass on.”

‘The world needs our help’

More than a decade ago, a pair of boomers, Bill and Melinda Gates, stepped away from their careers at Microsoft to start giving away their fortune. They joined with legendary investor Warren Buffett to challenge fellow billionaires to focus on coming generations.

Among the first to join in their Giving Pledge were Bill and Joyce Cummings, a Winchester couple who fly coach and pride themselves on being frugal. But they’ve quietly bankrolled hundreds of nonprofits through a foundation worth over $3 billion. The pledge asks the wealthy to donate at least half their assets to charity. By the time they signed it, in 2011, the Cummings had already given more than 70 percent.

Though they’re in their 80s and thus older than the boomers, the Cummings helped to set the pace for an emerging class of boomer benefactors that includes AOL founder Steve Case, 63, businessman and former presidential candidate Tom Steyer, 64, Boston hedge fund manager Seth Klarman, 64, and Boston-bred Netflix chief Reed Hastings, 61, along with scores of other pledge signatories from their generation.

Bill Cummings, founder of Cummings Properties, delivered poinsettias on Dec. 8 to Batavia Biosciences, one of the companies leasing space in his Woburn office building. He and his wife, Joyce, were among the first to sign the Giving Pledge.Suzanne Kreiter/Globe Staff

So far, Cummings’s foundation has distributed over $320 million to organizations ranging from Big Brothers Big Sisters to community development centers, almost all in Eastern Massachusetts. “We very much want to put it back where we got it, in our communities,” said Cummings, who grew up in Medford and was the son of a house painter.

Among the growing forces in philanthropy are multigenerational family projects. Deborah Sills Iarussi, 54, recalled her grandfather, Nathaniel Sills, who ran an automotive parts business in New York, telling his family, “I’m not interesting in giving you a ton of inheritance [but] what I am going to do is give you a foundation.”

Sutton Bradbury-Koster (center) talked to at-risk youth, many of whom have suffered from trauma and urban violence, at a program hosted by Roca in Chelsea. The nonprofit is funded by the Sills Family Foundation. Lane Turner/Globe Staff

Today, the Sills Family Foundation, started in 2003, spreads roughly $2 million a year in donations across several states. It targets specific causes, such as families in crisis. Among the groups it supports is Roca, which works with gang-involved young adults in Chelsea and Boston.

The foundation is also the connective tissue of the family. Iarussi said she and her two older uncles, all trustees, are working to involve younger family members who distribute grants to causes they choose through second- and third-generation funds. “Money can pull people apart,” she said. “We’re working hard to make money pull us together.”

South Shore businessman Rob Hale, 55, tried to tap into the same pay-it-forward impulse when delivering a commencement speech at Quincy College last May. He announced he was giving each graduate $1,000 with the hope they’d pass half on to someone else struggling through the pandemic and upended economy. Each grad got $500 in an envelope marked “gift,” and another $500 in one marked “give.”

Hale and his wife, Karen, previously made $50 million donations to Boston Children’s and Brigham and Women’s hospitals. They, along with Hale’s mother, Judith, gave $80 million to Dana-Farber Cancer Institute in memory of his father, Robert T. Hale Sr., who died from pancreatic cancer. Most recently, the Hales pledged $30 million to Rob Hale’s alma mater, Connecticut College, the biggest gift in its history.

At Veterans Memorial Stadium in the spring, Quincy College graduate Robenia Chambers, hugged commencement speaker Rob Hale, co-founder of Granite Telecommunications. Hale surprised the 250 graduates with $500 cash for themselves and an additional $500 he asks them to give away. Suzanne Kreiter/Globe Staff

“These are terrible times, and the world needs our help,” said Hale, the CEO of Granite Telecommunications in Quincy, citing COVID-19 and the racial divisions. “It feels like America’s more unsettled than I’ve ever seen it. … And if we’re the fortunate ones who can help, we should.”

Some captains of commerce, who historically backed philanthropies as individuals, have been getting their businesses into the act. State Street, the Boston financial services giant, focused its foundation 11 years ago on education and job training. More recently, it’s also been steering contributions, totaling $25 million annually, toward programs that advance racial equity and social justice and combat the ravages of the pandemic and climate change.

State Street’s leaders want to “make a statement” to the community during tough times, said Joe McGrail, 65, who heads the foundation. The campaign has also helped recruit and retain younger workers, many of whom want to be engaged. “The next generation thinks a lot about how business can help solve social problems,” McGrail said.

Giving also appeals to customers, especially boomers stepping up their own charitable efforts. J. Jill, the Quincy-based women’s clothing retailer, supports its Compassion Fund by selling a line of products, such as scarves and Christmas ornaments, in stores and online. It has raised $20 million over the past decade to support homeless and battered women and other causes and plans to increase contributions in 2022.

“We have boomers who want to spend their money on brands that stand for something,” said Claire Spofford, 59, the J. Jill chief executive.

Giving and the family fabric

Texas oil baron H.L. Hunt, a rock-ribbed conservative who was one of the world’s richest people when he died in 1974, might have frowned at how his youngest daughter is spending her inheritance.

Swanee Hunt, 71, has funded progressive activists and social justice causes, such as empowering women and fighting sexual exploitation, through her Cambridge-based foundation, Hunt Alternatives. She also runs an institute that supports women leaders in Afghanistan. Hunt, a former Harvard Kennedy School lecturer who moved to Washington, D.C., three years ago, recalled her father harshly criticized what he saw as the leftist leanings of many philanthropies.

A former US ambassador to Austria and friend to Hillary Clinton, Swanee Hunt was influenced by her mother, Ruth Ray, (her father’s former mistress who married him after his wife died) and her southern Baptist upbringing. “Mother was extremely generous, and for her it was all about the church,” Hunt said. “For Dad, it was all about stopping the Red Menace,” a Cold War era term for the threat of communism.

Like many boomers, Hunt is now thinking about passing her legacy to her own three children, who are all involved in global philanthropy, along with her eight grandchildren. She hopes they’ll wrestle with the same questions that consume her: “Do we have to take responsibility for our neighbors? Well, who’s our neighbors? It’s the whole world.”

Swanee Hunt, a former US ambassador to Austria, has devoted much of her adult life to supporting social justice and global security causes through her Hunt Alternatives foundation. John Boal/John Boal Photography

But drawing on her own experience, Hunt doesn’t think she should dictate how her heirs make their impact in the world. She has a message for the younger generation — and for her fellow boomer activists: Rather than pick up and run with the elders’ causes, she said, “Do the next right thing. The danger is when we try to make the next generation look like us, care about the same things. The spark may go out.”

Estates of the super-rich will attract the most attention, of course, but the enormous wealth amassed by boomers guarantees that literally millions will leave assets valued at more than $1 million to posterity. All of this will have to be divided, often among multiple heirs and causes, foreshadowing countless family dramas in the years ahead.

Hyannis financial planner Chris Boyd, whose clients are mostly boomers, said many are surprised at the size of their holdings when they see him for the first time. “When you think of people who might own a house in this area or have a 401(k), you get to a million dollars pretty quickly,” he said. “The market of the past 10 years, it’s been on a run.”

A burgeoning cast of estate planners, financial advisers, and wealth managers — professionals who once catered exclusively to the rich — are now guiding middle-class Americans who might not have even drawn up a will in decades past. They set up family trusts, shelter assets from inheritance taxes, and create charitable funds or foundations.

Some in the wealth management business also help clients navigate the dicey family dynamics at play, and the potential for unintended consequences, in generational handoffs. And they advise some not to wait until they die: Giving while still alive can enable not only “money talk” with younger heirs, but a wider conversation about legacy.

For boomers with modest means, the calculus can be straightforward. Framingham resident Kevin Driscoll, 70, a former Digital Equipment engineer and sales manager who now entertains children and adults as a ventriloquist and puppeteer, said he’ll be dividing his financial assets equally between his two sons. In addition, Lance, 38, will get the red Corvette, while Ian, 28, will get his other car and puppet cache.

Driscoll’s not shy about offering words of wisdom to his sons, but he also believes the next generation needs to figure out life for themselves. “They’re going to have their own joys and sorrows,” said Driscoll, who spends holiday seasons visiting senior care homes dressed as Santa Claus. “I tell them to do what they love, and the money will follow.”

For other families, passing on wealth is anything but simple. A family’s size, or bickering among siblings, can produce strains. Economic forces can limit inheritances. Many older Americans have seen their pensions phased out or lost their jobs late in their careers, forcing them to draw smaller Social Security payments early to fund their retirement. Others have had to crack into their nest eggs to pay for long-term care.

Falmouth high school science teacher Jim Remillard, 66, and his wife, Maureen, 64, a school nurse, have helped their eight grown children — four daughters and four sons — with money as much as they could along the way. But like most in their generation, they have no long-term care insurance, which Remillard calls “wicked expensive.” So while their estate will eventually be parceled out equally among the kids, its size will depend partly on whether the parents can remain healthy.

There are also differing views on how much, or whether, those in the older generation should aid their offspring financially. Many help adult sons and daughters pay for weddings and downpayments on homes, or seed grandchildren’s college funds. Others fear too much help can dampen ambition and independence. Some adult children feel guilty about taking money from parents during their lives or even after.

Most also recognize that when wealthy people take up philanthropy, it will inevitably mean smaller inheritances for the next generation.

Rob Hale, at Granite Telecommunications, is OK with that.

“I tell my kids I’m trying to give away all my money,” he said. “They’ve been very fortunate to have wonderful educations and hopefully a strong upbringing. They’re going to need to run their own lives. They’re not going to have aristocratic lives.”


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Robert Weisman can be reached at robert.weisman@globe.com. Follow him on Twitter @GlobeRobW.