Next Gen – Who Is the Next Generation of Philanthropists?
The United States is currently undergoing a massive generational transfer of wealth. It is projected that at least $41 trillion will transfer from parents and grandparents to the post-Baby Boom generations over the next 40 years. Further, it is anticipated that this new wealth may usher in a new “golden age of philanthropy” as the members of Gen X (born 1964 – 1980) and Gen Y/Millennials (born 1981 – 2000) – collectively called “Next Gen” — take over the reins of financial decision making. The first “golden age” conjures up the major givers of a century ago such as Rockefeller, Morgan, and Carnegie. This new golden age includes leaders Warren Buffett and Bill Gates, neither of whom is part of this current generational cohort, but also includes Mark Zuckerberg and Priscilla Chan – 28/27 years old, John and Laura Arnold – 38/39 years old, and Sergey Brin and Anne Wojcicki – both 39 years old. (See my recent post “Megaphilanthropy – Can You Even Get Your Head Around It?”)
Much handwringing will occur in all marketplaces as marketers try to sell their products and services to these folks. This includes the not-for-profit sector as organizations and causes struggle to make meaningful connection and increase their share of wallet. Understanding what makes this new wave of philanthropists tick is crucial.
A recent study by the Johnson Center for Philanthropy and 21/64 examined the motivations of these young philanthropists. The participants in the study all come from very charitable high net worth families. For example, 53% of their families give over $250,000 annually to charity, while 30% give over $1,000,000. So they tend to emerge from a high achieving, high expectation gene pool. The good news is, contrary to the generational sloth perceived by certain Baby Boomers of the upcoming generations (“kids today – lazy, no motivation, no social conscience”) these Gen Xer’s and Millennials appear to take a long term view of philanthropy and look to get into it sooner.
Some key findings:
- Driven by Values, No Valuables – Values appear to drive the Next Gen philanthropists, not valuables. Surprisingly, or not, these values have often been learned at their parents’ knees. 89% credit their parents for their social consciousness, while 63% credit grandparents, 56% close friends and 47% peers. They seek a balance between honoring the family legacy and assessing the needs of the day (eg. – supporting religious organizations versus environmental causes). While they feel a commitment to philanthropy that is rooted in the past, they plan to meet that commitment in different ways in the future.
- Impact First – This may be more perception than reality but Next Gen see embracing “philanthropic strategy” as a distinguishing factor between them and their parents and grandparents. They see prior generations as being motivated more by a desire for recognition or social standing while they see themselves motivated by the desire for impact above all else. They want to see, and find satisfaction in, the results of their philanthropic investments.
- Time, Talent, Treasure, and Ties – Giving without significant, hands-on engagement feels like a hollow investment with little assurance of impact. Relationships with the organizations they support are crucial. The consensus is that one gives with all one has to give.
- Crafting Their Philanthropic Identities – Philanthropy has traditionally been a second or third act, engaged in as one “matures” into their golden years. Next Gen does not want to wait for this and is looking to currently craft their individual identities and actively ponder and develop their own legacies.
The results of this study are certainly encouraging. Next Gen philanthropists of means want to move from success to significance more quickly and more often than their parents. Those of us who look to assist in this transformation (advisors, fundraisers) should expect today’s givers to be more engaged and more demanding of results – and that this trend will only accelerate over the coming years.
