Their new report, "Wealth Transfer Estimates Among African-American Households," also includes statistical patterns and trends in income, wealth, and philanthropic giving among African-American households, as well as information on the capacity of African-American households to make charitable gifts and to leave charitable bequests during the same 55-year period. The research was facilitated by funding from the Twenty-First Century Foundation.
"By examining the major findings concerning recent trends in the financial resources and philanthropy of African-American households, the distribution of wealth and rates of growth in wealth among them, and the estimates of wealth transfer, we are attempting to paint part of an accurate financial picture of the African-American household, both today and in the future," said BC Center on Wealth and Philanthropy Director Paul Schervish.
In 2001 the net worth of African-American households reached $1 trillion (in 2003 dollars) after a decade of steady growth. In spite of this steady growth the African-American share of total household net worth fell because the wealth of other households grew more rapidly.
"We did find, however, that the growth in wealth among younger African-Americans who grew up after civil rights legislation was in effect identical to that for Caucasians of the same age and this is a hopeful sign for African-American wealth in the future," said CWP Associate Director John Havens, who directed the study.
The new report is an outgrowth of the nationally-noted study "Millionaires and the Millennium" issued by the Boston College researchers in 1999, which reported that $41 trillion ($46.3 trillion in 2003 dollars) would be transferred via estates in the U.S. over the next 55 years. Four times higher than the previous highest estimate of wealth transfer, the $41 trillion figure -- which was the lowest of three scenarios presented by CWP and of which $6 trillion ($7 trillion in 2003 dollars) is expected to go to charity ?- represents the largest intergenerational transfer of wealth in history.
The researchers note that while the estimates of wealth transfer from African-American households are large, they account for only a fraction of the $46.3 to $153.7 trillion (2003 dollars) of CWP's 1999 estimate of total wealth transfer for the nation.
"Although African-American households constituted 12.4 percent of all households in 2001, they will generate less than 2.5 percent of the national total wealth transfer," said Havens. "This is due to the low endowment of wealth owned by African-American households in 2001 and the lower-than-average rates of growth in the wealth of most African-American households," he said.
Income, wealth, and charitable giving in the African-American community have risen rapidly in recent years, Schervish and Havens report.
From 1992 through 2001, after adjustment for inflation, they say, both aggregate income and aggregate wealth for African-American households have risen at an annual rate of 4 percent, and aggregate charitable giving has risen at an annual rate of 5 percent. Similarly, the inflation-adjusted household averages for wealth, income, and charitable giving among African-American households follow the same trend, albeit at somewhat slower rates.
These themes of growth are encouraging for the African-American community, but the researchers note that they lag behind national trends.
"In terms of aggregate financial resources the African-American community, as a group, was substantially better off in 2001 than in 1992; but their gains in income and wealth were not as large, on average, as for the total population, whose income and wealth grew even faster than African-American households. The rate of growth in charitable contributions among all other households was greater than among African-American households, due in substantial part to the higher rates of growth in financial resources among all other households," said Havens.
"The result," he said, "is that African-American households gave a larger total amount but a smaller share of aggregate national household giving in 2001 than in 1992."
The full report is available for download at http://www.bc.edu/research/swri/features/africanamerican/.
The CWP estimates are derived through a wealth transfer microsimulation model developed and housed at the center that combines data from the Census, Center for Vital Statistics, Federal Reserve, and the Internal Revenue Service.
In addition to the report on African-American wealth transfer, over the last several months CWP has begun to do regional and state wealth transfer projections. At the invitation of the St. Louis Metropolitan Association for Philanthropy, for example, the researchers recently estimated wealth transfer in the St. Louis metropolitan area.
The Center on Wealth and Philanthropy at Boston College (www.bc.edu/cwp) is a multidisciplinary research center specializing in the study of spirituality, wealth, philanthropy and other aspects of cultural life in an age of affluence. CWP is a recognized authority on the relation between economic wherewithal and philanthropy, the motivations for charitable involvement, and the underlying meaning and practice of care.
Founded in 1970 as the Social Welfare Research Institute, the center officially was renamed on June 1, 2004, to reflect the increasing focus of the researchers' work over the past two decades on the trends, meaning, motivations and practice of wealth and philanthropy, and to coincide with a new program of executive education for wealth holders, fundraisers and financial professionals.
MEDIA NOTE: Paul Schervish and John Havens can be reached at the Boston College Center on Wealth and Philanthropy at 617-552-4070.