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February 16; Star-Ledger | People in nonprofits have spent a good deal of time anticipating the big generational wealth transfer with sums totaling trillions expected to make its way into the coffers of charities over the coming years. But life intervenes and some observers in New Jersey are concerned about the wealth being transferred out of the state. Writing in the New Jersey Star-Ledger, Hans Dekker, the President of the Community Foundation of New Jersey, points to a recent study by the Boston College Center on Wealth and Philanthropy (which predicted the wealth transfer in the first place) that found “between 2004-2008, New Jersey lost almost $1 billion in expected charitable giving as a result of a significant decline in the amount of wealth moving into the state and an increase in the amount of wealth leaving.” Dekker adds that in the five years prior to 2004 “New Jersey gained $1 billion in typical charitable giving as a result of migration into the state. Taken together, this decline represents a loss of $400 million per year in charitable giving in New Jersey.” What is especially troubling about these “scary numbers” for nonprofits is that individuals make the lion’s share of charitable contributions to the state—80 percent—compared to less than 15 percent from corporations and foundations. Dekker also notes that with a decline in funding, the flight of the wealthy hurts in other significant ways. “Wealthy households—while a relatively small proportion of the population—play a valuable role as members of our civic and nonprofit community by serving as volunteers, trustees, and as role models for charitable giving for younger generations.” Among the remedies proposed is a state tax deduction on charitable giving, “an estate tax exemption that begins taxing a family’s life savings at $675,000,” and addressing the state’s income tax rates including the “millionaire’s tax.”—Bruce Trachtenberg

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  • Julia Sass Rubin

    The findings of the Boston College study have been widely misreported and I’m saddened to see that trend continue here. While the study did find an increase in the number of individuals with significant assets leaving the state, it also found that a greater number of even wealthier individuals were moving into the state. Those moving in were also younger, better educated, and their wealth was in the form of income vs. assets. In other words, New Jersey was experiencing a normal transition as an aging population retired and moved primarily to Florida and new, younger folks replaced them. The fact that the replacement population is even more attractive from an economic (and philanthropic) standpoint than those retiring has been lost in the coverage. New Jersey’s conservative republican governor has used this study to justify his desire to kill a tax surcharge on the wealthy imposed by prior administrations in order to help close a large budget gap, even though the state can little afford such a tax cut right now and the wealthy are clearly not being discouraged from moving into the state.