Nonprofits Freeze as $124 Trillion Shifts to Younger Donors
A senior Bloomerang executive says charities are stuck on old playbooks as $124 trillion changes hands between generations — and the donors inheriting it give differently.
Steve Isom, a senior executive at donor-software firm Bloomerang, told Fortune that most nonprofits are "paralyzed" over how to court millennial donors as the $124 trillion Great Wealth Transfer moves fully underway.
The largest handover of household wealth in American history is no longer a forecast. It is happening now, and the fundraising profession appears unprepared for it. Steve Isom, a senior executive at donor-software firm Bloomerang, told Fortune that most nonprofits are approaching the youngest generations of donors the wrong way, leaving them effectively “paralyzed” as $124 trillion moves down the family tree.
The number itself is the headline. But the operational story underneath it is more uncomfortable for charities: the institutions that spent four decades building relationships with one cohort of donors now have to build them again, with a group that behaves nothing like its parents.
Why a record transfer does not automatically mean record giving
There is a persistent assumption in the nonprofit sector that inherited wealth converts, more or less mechanically, into charitable dollars. That assumption is doing a lot of unearned work.
Wealth passing between generations changes hands at a moment of maximum financial distraction. Heirs are simultaneously settling estates, managing tax exposure, absorbing illiquid assets like closely held businesses and real property, and — often — dealing with siblings. Charitable intent, where it exists at all, competes with mortgage payoffs, tuition and the simple instinct to consolidate.
More importantly, an inheritance does not carry the donor relationship with it. A bequest arrives with the deceased’s affinities, not the heir’s. The local hospital foundation that a parent supported for thirty years has, at the moment of transfer, no standing relationship with the person now holding the money. That is the gap Isom is describing when he says nonprofits are approaching younger donors incorrectly: they are treating a generational handoff as a continuity event when it is closer to a cold start.
The tactics that stopped working
The traditional major-gifts playbook was built around a small number of high-touch, high-cost interactions: the annual gala, the direct-mail appeal, the named-building conversation conducted over lunch. Those methods were optimized for donors with settled careers, local roots and a tolerance for institutional formality.
The donors inheriting the $124 trillion are, in aggregate, more mobile, more likely to research an organization before engaging with it, and considerably more skeptical of overhead ratios and vague impact language. They also expect the transaction itself to be frictionless — the same standard they apply to every other digital payment they make. A fundraising operation that still routes a first-time gift through a paper form or a three-page checkout is losing donors it never even sees.
Several structural mismatches stand out:
- Cadence. Older giving patterns cluster around year-end and annual renewals. Younger donors are more comfortable with recurring, smaller commitments — which produce lower headline gift sizes but far better lifetime value.
- Proof. Emotional appeals without measurable outcomes read as evasive to a cohort raised on ratings platforms and public financial filings.
- Channel. Peer-to-peer and creator-led fundraising has moved real money without any institutional gatekeeper involved. Many charities still treat those channels as novelty rather than infrastructure.
- Voice. Younger donors frequently want participation — volunteering, advocacy, governance input — rather than a receipt and a newsletter.
None of this is technologically difficult. It is organizationally difficult, because it requires development teams to abandon metrics they have been rewarded on for years.
Where the software vendors fit in
It is worth naming the commercial interest here. Bloomerang sells donor management software, and a sector-wide diagnosis of “you are doing this wrong” is also, conveniently, a sales argument. That does not make the observation incorrect — vendors sitting on aggregated donor data across thousands of small and mid-sized organizations genuinely do see behavioral shifts before individual charities do. But readers should weigh the source.
Bloomerang sells donor management software, and a sector-wide diagnosis of “you are doing this wrong” is also, conveniently, a sales argument.
The broader donor-technology market has consolidated around a handful of platforms offering CRM, payment processing, email automation and analytics in a single stack. The pitch to nonprofits is that retention, not acquisition, is where the money is: keeping an existing modest donor is dramatically cheaper than finding a new one. That logic becomes more compelling, not less, when the incoming donor base gives in smaller increments over longer horizons.
The organizations most exposed
Large national charities and university endowments have professional planned-giving teams, legal counsel and the patience to wait a decade for a gift to mature. They will manage.
The risk sits with small and mid-sized regional organizations — food banks, arts groups, community health clinics, animal shelters — whose donor files skew heavily toward one aging cohort and whose development function may be a single staff member with other duties. For those groups, the wealth transfer is not an opportunity but an attrition event. Every year the file ages without replacement, the revenue base narrows.
What to watch over the next several reporting cycles: whether aggregate charitable giving keeps pace with the transfer, whether donor-advised funds absorb an increasing share of it as a parking place rather than a distribution channel, and whether the number of individual American households giving to charity continues its long-documented decline even as total dollars hold up. Concentration — fewer donors giving more — is the trend line that should worry the sector most, because it makes revenue fragile in exactly the organizations least able to absorb a shock.
The market backdrop
The transfer is also happening against asset prices that sit near their highs, which inflates the headline figure and the value of appreciated securities that make gifting attractive. At the last close before this was written, on Friday, 14 August 2026, the S&P 500 tracker (NYSEARCA: SPY) finished at $776.34, down 0.20% on the day from a previous close of $777.88. The Nasdaq 100 fund (NASDAQ: QQQ) ended at $731.07, off 0.14%, and the Dow tracker (NYSEARCA: DIA) closed at $536.80, down 0.21%.
Those are quiet sessions, but the level matters more than the daily move. A substantial share of the wealth being transferred is held in equities, and gifts of appreciated stock — which allow a donor to avoid capital gains while claiming a deduction — become more valuable to both sides when markets are elevated. A meaningful drawdown would shrink the transfer’s nominal size and, historically, charitable giving tracks financial-asset values closely.
The practical implication for nonprofits is that the window to build relationships with the inheriting generation is open while balance sheets are strong. Waiting until the money has already settled into someone else’s portfolio, or into a donor-advised fund with no distribution requirement, is how a $124 trillion opportunity becomes someone else’s revenue.
Key facts
- Transfer size: $124 trillion, described as fully underway
- Source of claim: Steve Isom, executive at donor-software firm Bloomerang, via Fortune
- S&P 500 (SPY): $776.34, -0.20%, close of Fri 14 Aug 2026 20:00 GMT
- Core problem: Nonprofits ‘paralyzed’ over how to reach millennial donors
Frequently asked questions
What is the Great Wealth Transfer?
It refers to the handover of household assets from older generations to their heirs, valued at $124 trillion. According to reporting by Fortune, the transfer is now fully underway rather than a future projection. It includes cash, securities, real estate, retirement accounts and privately held businesses passing to younger recipients over the coming decades.
Why are nonprofits struggling with this shift?
Steve Isom, a senior executive at donor-software firm Bloomerang, says most nonprofits approach the youngest generations of donors the wrong way and are effectively paralyzed by the question. The core issue is that a bequest transfers money but not the donor relationship — heirs inherit assets without inheriting their parents’ charitable affinities.
Does inherited wealth automatically increase charitable giving?
No. Heirs receiving wealth face competing pressures including estate settlement, taxes, illiquid assets and personal financial priorities. Charitable intent is not automatic, and the receiving organization typically has no existing relationship with the heir. Charities must rebuild engagement rather than assume continuity from the previous generation.
Which nonprofits are most at risk?
Small and mid-sized regional organizations — food banks, arts groups, community clinics and shelters — with donor files concentrated in one aging cohort and minimal development staffing. Large national charities and universities have professional planned-giving teams and legal resources to manage multi-year gift structures. Smaller groups often have a single fundraiser handling multiple roles.
How do market levels affect charitable giving?
A large share of transferring wealth sits in equities, so asset prices influence both the transfer’s nominal size and gift values. At the close on 14 August 2026, SPY finished at $776.34 and QQQ at $731.07. Gifts of appreciated stock are more attractive when markets are elevated, since donors avoid capital gains tax.
What is Bloomerang and why is it commenting?
Bloomerang is a donor-management software firm that sells CRM, payment processing and analytics tools to nonprofits. Its executives see aggregated giving behavior across many client organizations, which gives them early visibility into donor trends. Readers should note the commercial interest: a diagnosis that charities are fundraising incorrectly also supports the company’s sales case.
Sources
Photo: Julia M Cameron · Pexels Licence — source
