Finding  Your  Middle  Class  Millionaires:    

Who  Are  They  and   How  Can  You  Reach  Them?  

12/18/14  1pm  Eastern  

The  presentation  will  begin  shortly.

Before  We  Get  Started3

This  presentation  is  being  recorded!  

The  recording  and  slides  will  be  emailed  to  you    later  this  afternoon.  

Please  chat  in  any  questions  for  our  guest.    We  will  answer  them  in  the  formal  Q&A  session    

at  the  end  of  the  presentation.

3

Our Presenters:

Harold Pinkham:

Principal & Co-Founder, ActivateLegacy

Ron Ware:

Principal & Co-Founder, ActivateLegacy,

President & Personal Legacy Advisor, Wealth Impact Partners

Think Different!

Meet Bob – a Middle Class

Millionaire:

• Actively involved with Organization for 30+

years, served past 10 years on Executive

Board

• Loves Organization!!

• Children greatly benefited from the

Organization

• Program guy, not a fundraiser

• Annually gave $200

What About Bob?

• Not on anybody’s radar for a major gift.

• About to retire and attended an Estate

Planning workshop we hosted to

members/donors of organization.

• Bob and his wife met with CFP/Legacy

Advisor because they were concerned

they didn’t have enough for retirement.

Bob & His Wife discovered:

•They were going to have “excess

wealth” which they didn’t plan to spend

on themselves or want to give to their

children.

•They discovered they could

create/provide legacy gift that would

reflect their deepest values.

Four Months Later…..

They announced that they plan to leave

the Organization over $1,000,000!!!

How did this happen??

The Millionaire Next Door:

A landmark book by

Thomas Stanley & William Danko

Who are they?

• They don’t look like millionaires.

• They don’t dress like millionaires.

• They don’t eat like millionaires.

• They don’t act like millionaires.

The Millionaires in Your

Organization:

• Two-thirds are self-employed.

• Only one in five is retired.

• 57 years old; married with three

children.

• Almost never divorced.

• Spouse is equally or more frugal

• Serious budgeters.

The Millionaires in Your

Organization:

• 97% are homeowners.

• 50% have lived in the same house for

more than 20 years.

• Most live in middle-class

neighborhoods.

• Their homes valued around $320K.

Millionaire Spending Habits:

Frugal, Frugal, Frugal!

• 50% would never spend over $350 for a

suit.

• 50% would never spend over $140 for a

watch.

• Most hold Visa/MasterCard instead of

American Express.

Millionaire automobiles:

• 81% purchased their vehicles outright.

• 59% spent under $35K for their vehicle.

• Only 23% own new vehicles.

• Most autos are over 4 years old.

• F-150, Explorer, top choice.

Millionaire Businesses:

• Self-employed: They make up less than

20% of the work force, but account for

66% of all millionaires.

• “Dull normal” businesses: welding

contractor, farmer, plumber, HVAC,

dentist, accountant, pest controller, etc.

Millionaire Businesses:

• Cash Poor: much of their realized income is

invested in assets that tend to appreciate in

value without generating realized income

(i.e. 20% home equity, 20% retirement, 20%

business)

• Self-employed: 75% are entrepreneurs; others

are professionals (accountants, lawyers,

doctors, etc.)

Millionaire Businesses:

• 91% never received, as a gift, as much

as $1 of the ownership of their

business.

• Less than 20% will turn their

businesses over to their children.

The Millionaire Entrepreneur:

• Most will require planning to unlock

assets for philanthropy.

• Only 3% have plans in place.

• Few are prospected by nonprofits.

• They are the core business of many

financial advisors.

Millionaire Net Worth:

• Of the 8.4 Millionaire families in US only

6% have net assets worth over $10

Million.

• Average $3.7 million.

• Typical $1.5 million (median).

Most Don’t Consider Themselves….

Wealthy!

With Assets between $1 – 5 Million

UBS Wealth Management Study

Assets Over $5 Million

With Net Assets over $5 Million

UBS Wealth Management Study

Millionaires’ Biggest

Concerns:

What Keeps Them Up At Night?

• Running out of money – 88.3%

• Rising medical costs – retirees experience a much higher rate of inflation due to medical costs.

• Living longer – average lifespan continues to increase.

Millionaires’ Biggest

Concerns:

1. Heirs – 79%

2. Medical costs – 77%

3. Retirement income – 71%

4. Kids/Grandkids education – 48%

5. Being sued – 47%

6. Losing job/business – 40%

7. Personal security – 28%

8. Parents’ care – 28%

• 9. Gifts to Charity – 27%

Prince & Associate Survey

Summary:

• Over 8.4 million Millionaires in U.S.

• Over 13 million are worth $500K -

$999K.

• Most don’t think they’re wealthy.

• Few have done little, if any, financial

planning.

So what’s an organization

do to?

A New Approach…

“The Excess Wealth Conversation”

With Your Donors

Every gift begins with…..

a conversation.

But getting a gift from a MCM requires a much

different conversation

MCM Donor’s are looking for…

• Financial Clarity and Confidence with their

future.

• Privacy as they discover their true capacity.

• To be inspired not confused.

The Excess Wealth Conversation is…

a focus on Donors needs first!

It is…

• holistic, deeply personal, and authentic

conversation.

• thoughtful conversation exploring a donor’s

philanthropic intent.

It is…..

• strategic approach to assessing a donor’s financial

capacity and philanthropy intentions.

• an invitation to plan at a new, exciting, and deeper

level: If you knew you could, wouldn’t you?

What it is not….

• It is not focused on your organization’s

needs.

• It is not an ask for a gift

• It is not guided or conducted by staff.

It is not…

• focused on tactics (i.e. Charitable Gift

Annuities, CRTs, etc.)

• an advisor selling a financial product.

• a solicitation for business.

Case Study:

The Man who couldn’t pronounce

Philanthropy.

As an Organization…

• Focus on donor concerns, become Donor-Centric!

• Create a Philanthropic Advisory Council (PAC) to help donors begin the philanthropy conversation

• Use your PAC to provide valuable educational resources that address their concerns.

• Demonstrate leadership/Show them that you care about their issues!

Create Your Planned Giving…

Dream Team!

Create a Philanthropic

Advisory Council (PAC)

• 25-40% of most nonprofit supporters work in the financial industry.

• These are the attorneys; accountants; financial planners; insurance professionals; bankers, investment bankers; etc. connected to your organization.

• Recruit and train them to help your organization.

Have them:

• Help produce educational events and materials that inspire your Middle Class Millionaire donors

• Help create a Gift Planning “culture” within your organization.

Leverage their expertise to address donor concerns:

• Estate Planning

• Small Business Exit Strategy

• Elder Law/Medicaid Planning

• Health & Long Term Care Insurance

• Retirement Income Planning

• Asset Protection

As a result, you generate:

• Appreciation and trust from donors who feel valued and understood by your Organization.

• Significant follow-up conversations among donors and PAC members.

• Interest in Gift Planning strategies and opportunities as donors seek to create impact through your Organization’s work.

WIN → WIN → WIN

Growing Trends:

Nonprofit staff’s involvement in helping donors to make charitable decisions:

2006: 41%

Today: 29%

More and more donors are consulting with their legal/financial professionals first.

Bank of America Study of Affluent Families

Growing Trends:

Percent of donors who learned about giving/ philanthropy options from a financial advisor:

1994: 4%

2008: 28%

NCPG Task Force Study, The Future of Charitable Gift Planning.

Growing Trends:

Sources of Charitable Advice

Accountant: 67.5%

Attorney: 40.8%

Financial Planner: 38.8%

Nonprofit Fundraiser: 24.1%

University of Indiana Study

However, before you begin:

Be Aware!

Who initiates the charitable

gift conversation?

CPA’s & Wealth Advisors – Only 5.7%

Attorneys – Only 6.3%

Donors/Clients – 94%

Source: Bank of America/Merrill Lynch

How do donors/clients feel

about this?

Only 21% are satisfied with Advisors!

Why?

• The Tax Lead: Donors motivated to give to reduce taxes. Advisors: 46%, Donors: only 10%

• Donors were frustrated they had to initiate the philanthropic conversation. (34% open to idea if brought up by Advisor. 43% if Advisor shares own plans)

• Advisors focused on the technical; did not discuss personal or social values.

Source: Bank of America Study & The Philanthropic Initiative

The typical approach

to planning:

The Planning Horizon

Why?_____________________________________

How?

80% of time spent on How (tactical)

20% spent on Why (dreams/social values/concerns)

RESULT:

75% of clients/donors don’t take action!

Something to think about …

The transfer of wealth

is coming!

Expected wealth transfer 2007-2061:

Over $59 Trillion

Amount directed to Nonprofits/Charities:

Over $6.3 Trillion

Boston College Center on Wealth and Philanthropy:

Who currently has the wealth:

Share of Wealth

• Silent/Greatest Generation: 53%

• Baby Boomers: 38% (Youngest is now 50 years old)

Are You Ready?

Questions?

About ActivateLegacy

Grow Legacy Gifts

The 7-Step System & Tools

ActivateLegacy Resources:

• Webinars

• ½ Day & Full Day Training Workshops• For Executive Boards – begin to build the culture

• For Financial Experts – create and implement your

Philanthropic Advisory Council

• Our Signature Donor Presentations –

inform and inspire

• Grow Legacy Gifts System – materials,

coaching, and consulting

Our Next Free Webinar:

“The Excess Wealth Conversation”(The Art of Unlocking Exponential Gifts from the Middle-Class Millionaire)

January 28th - 2:00 PM

Register at:

http://activatelegacy.com/webinars/

Thank You!

www.activatelegacy.com

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