Charlotte Davis Welcome Introductions Project Rationale College - - PDF document

3/8/2017 1

Orientation TAC Meeting

Rural Maryland Transfer of Wealth Opportunity Project

March 28, 2017

Charlotte Davis

Welcome – Introductions – Project Rationale College of Southern Maryland’s Role

Don Macke

Center Team Introductions – Session Overview

3/8/2017 2

Don, Deb, Cathy, Dana & Eric

Methodology – Ground-Truthing Process

Orientation Flow

1. Welcome, etc. 2. Center Team & Session Review 3. America’s TOW Opportunity 4. Methodology Review & Ground-Truthing 5. TAC & How We will Work 6. Preliminary Analysis 7. Critical Questions 8. Next Steps 9. Wrap Up & Thanks Please refer to the agenda for greater detail.

Transfer of Wealth

3/8/2017 3 Philanthropic Opportunity

TOW is the inter-generational transfer of household wealth or estates.

US Net Worth Trend

$0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 1945 1947 1949 1951 1953 1955 1957 1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

1945-2015

(trillions $)

Annual Rate of Growth for US Household Current Net Worth

Decade Annual Growth Rate

1945-1950 3.47% 1950-1960 4.48% 1960-1970 4.09% 1970-1980 3.08% 1980-1990 3.47% 1990-2000 5.77% 2000-2010

• 0.12%

2010-2015 +0.39%

3/8/2017 4 Average Net Worth by Age

$0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000

Less than 25 25-34 35-44 45-54 55-64 65-74 75+ All households

2007 Avg. Net Worth 2010 Avg. Net Worth 2013 Avg. Net Worth

Average Net Worth by Educational Attainment

$0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000

No HS diploma HS diploma Some college College degree All households

2007 Avg. Net Worth 2010 Avg. Net Worth 2013 Avg. Net Worth

Average Net Worth by Work Status

$0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000

Work for someone else Self-employed/ partnership Retired Not working All households

Chart 3. Average Net Worth by Work Status 2007 Avg. Net Worth 2010 Avg. Net Worth 2013 Avg. Net Worth

3/8/2017 5 Methodology

Background Paper Historical Trends Population Forecasts Economic Scenarios Personal Income Scenarios Wealth Formation Scenarios Giveback Potential TOW Scenarios

Technical Advisory Committee (TAC) Members’ Role

Share Knowledge | Test & Verify Findings | Help with Education

• Demographic patterns
• Economic development and wealth formation trends
• Wealth holding patterns within the community
• Unique populations like immigrants, Amish, unionization, etc.
• Historic and projected personal income trends
• Household income status (e.g., sources, extent)
• Real estate holdings and market valuations
• Asset holdings (e.g., home ownership, vacation homes)

About the Project

Estimate household net worth in 2016 Estimate 10-year (2016-2025) and 50-year (2016-2065) transfer of wealth opportunity Produce transfer of wealth timing charts Produce estate transfer charts Illustrate source of wealth in 2016 by asset types like property, investments, etc.

3/8/2017 6 Online resource

https://goo.gl/xFccDP Dana Williams – dana@e2mail.org or 402.323.7336

Questions & Discussion Preliminary Analysis

3/8/2017 7 Maryland Urbanization Map Regional Analysis

Western MD DC / Baltimore Eastern Shore Southern MD Urban

2016 Household Current Net Worth

ESRI Estimates for 2016 Median CNW - $187,201 Mean CNW - $812,500 Gross CNW - $528.3 Billion Discounted CNW Estimates High Capacity – 27.8% 180,459 Households 65-74 Age Group ANW - $1.4 mil

3/8/2017 8

Mean & Median CNW

Ratio Mean/Median MD 5.3 Rural 4.3

$164,151 $187,201 $867,881 $812,500 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 $900,000 $1,000,000

Maryland Rural

Median Mean

Population Change

• 0.0%

0.5% 1.0% 1.5% 2.0% 2.5% 1970-2015 2000-2015 2015-2021 MD Rural MD

Maryland Economic Drivers

Personal Income 2015 (thousands) Change 2001-2015 2015 Per Capita Values Benchmarked to the US Retirees $90,216,150 35.4% Government $56,004,846 41.2% Professional and technical services $31,096,040 39.3% Health care and social assistance $25,411,658 48.9% Construction $14,985,781 6.4% Hardship Related Transfer Payments $14,947,229 113.3% Finance and insurance $12,544,759 16.9% Retail trade $12,019,347

• 6.8%

Administrative and waste services $9,397,524 35.8% Hospitality $9,140,269 29.1%

• 0.75

1.00 1.25 1.50 1.75

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MD Rural Economic Drivers

Personal Income 2015 (thousands) Change 2001-2015 2015 Per Capita Values Benchmarked to the US Retirees $23,803,232 52.4% Government $11,227,636 44.5% Health care and social assistance $5,161,212 53.9% Professional and technical services $4,708,799 75.2% Hardship Related Transfer Payments $3,890,059 131.1% Construction $3,618,880 3.4% Retail trade $3,340,339 4.9% Manufacturing $3,064,418

• 17.2%

Hospitality $2,216,495 55.5% Other services, except public administration $1,904,130 25.8%

• 0.50

0.75 1.00 1.25

Questions & Discussion Critical Questions

3/8/2017 10 Critical Questions

• 1. Demographic Changes?
• 2. Economic Changes?
• 3. Personal Income Changes?
• 4. Estate Wealth Formation?
• 5. Key Trends?
• 6. Curves in the Road?
• 7. Resources?

Questions & Discussion Next Steps – Don

Wrap Up & Thanks - Charlotte

3/8/2017 11

Project Schedule

February – Project Start March – Model Development March 28rd – First TAC Meeting April – Ground-Truthing Preliminary TOW Findings May – Research & Refined Scenarios Second TAC Meeting June – Final Findings Third TAC Webinar - Final Report July – Project Closeout

Questions & Discussion

For More Information

Community Development Philanthropy Transfer of Wealth

www.energizingentrepreneurs.org

Don Macke Cathy Kottwitz Dana Williams don@e2mail.org ckottwitz@gmail.com dana@e2mail.org