Research by the Center for Rural Entrepreneurship shows the transfer of wealth - the transfer of assets from one generation to the next - can strengthen communities as long as the assets stay within the community.
In Cole County, $1.95 billion will transfer generations by 2020, and $24.1 billion by 2060, according to the study commissioned by the Alliance of Missouri Community Foundations, an informal group of leaders of 10 community foundations in Missouri and funded through a U.S. Department of Agriculture grant.
John Baker, executive director of the Community Foundation of Central Missouri, said the issue with the transfer of wealth is that many people no longer spend their entire lives close to their birthplace. So, when assets are transferred to the next generation, the wealth is leaving communities.
To address this, Missouri community foundations are encouraging people to consider designating a portion of their estates, 401(k), IRA accounts, or life insurance policies for an endowment through a community foundation, which will benefit a community long-term.
"First, take care of your family and those you love," Baker said. "Then, give five - 5 percent that is - for your hometown community."
In Cole County, this 5 percent can be given through the Community Foundation of Central Missouri and then percentages of interest accrued on the initial donation is paid out annually by the Foundation on your behalf to specified nonprofits.
The Community Foundation of Central Missouri has a potential service area of 10 counties, including Cole County.
The foundation began in November 2010 and offers donors a variety of vehicles to establish charitable funds to provide a revenue stream for nonprofit services.
According to the Foundation, Cole County has $7.36 billion in private wealth. Over the next 10 years, $2 billion is estimated to be transferred to another generation.
If 5 percent of all Cole County estates become a part of the organization's community endowment, in 10 years, the endowment would equal $97 million in charitable gifts, providing $4.9 million total in grants and services, paid out annually, forever.
Baker said if every resident of the 10 Missouri counties served by the Alliance of Missouri Community Foundations gives 5 percent of their assets, after 10 years, Central Missouri could have $424 million in endowments, providing $21 million in grant payouts every year.
"We want to see communities continue," Baker said. "People can leave a legacy.
"It's a way to provide with what they've done, long after they're gone."
Contact Baker at the Community Foundation of Central Missouri at 573-817-5027 or firstname.lastname@example.org if you are interested in learning more about endowing a charitable fund.