The next generations of major philanthropists: #NextGenDonors

Posted on February 22, 2013

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The next generations of major philanthropists, who fit into “Gen X” (born 1964-1980) or “Gen Y/Millennial” (born 1981-2000) generational cohorts, will wield more philanthropic power than any previous generation.

With an unprecedented amount of wealth, these donors hold the future of philanthropy in their hands, yet, until now, there has been little previous research on the powerful but very private group of young people who stand to become the major donors of the future.

Last week, the Dorothy A. Johnson Center for Philanthropy and 21/64, a nonprofit consulting practice specializing in next generation and multigenerational strategic philanthropy, released the results of a first-of-its-kind national study (www.nextgendonors.org) of the next generations of major donors, ages 21 to 40, in their own voices.

What the research found should help us all be less afraid as this generation takes the reins. Next gen donors want to change how they give, more than what causes they support. They want to revamp philanthropic strategy in ways that can make it more effective.

They want to “conduct due diligence and research before deciding who to support; first decide philanthropic goals or ideal solutions, then search for potential recipients who fit those; fund efforts that address root causes and attempt systemic solutions; and have information about an organization’s proven effectiveness or measurable impact before deciding whether to support it.” These are the top four components of philanthropic strategy—out of 22 possible choices—that our survey respondents prioritized.

1) Driven by Values, Not Valuables: Because these next gen donors come from families with wealth and philanthropic resources, are members of generations experiencing rapid social changes, and are currently in important developmental stages of their lives, many readers may expect them to be entitled by privilege, careless with legacy, and eager for change. However, we have discovered quite the opposite. Values drive these next gen major donors, not valuables – values they often say they have learned from parents and grandparents. They are mindful of the privilege they have inherited or that comes with the wealth they are creating. They seek a balance between honoring family legacy and assessing the needs and tools of the day. They fund many of the same causes that their families support and even give locally, so long as that philanthropy fits with their personal values. They give using many of the same methods that their families use, but they want to explore new philanthropic and investing tools as well. They are eager to share in lifting the mantle of responsibility, along with other members of their families, and to put their resources to work for social good. Yet while they feel a commitment to philanthropy that comes from the past, they plan to meet that commitment in somewhat different ways in the future. Most of all, they are ready to be donors – and all that the term entails – now.

2) Impact First: The word “strategic” is used – probably over-used – in many different ways in the field of philanthropy these days. But these next gen major donors highlight the importance of strategy for the future of the field. They see philanthropic “strategy” as the major distinguishing factor between themselves and previous generations. They intend to change how decisions are made and how research and due diligence are conducted, utilizing multiple sources for information and all of the “tools in the toolbox,” as one of them describes it. They see previous generations as more motivated by a desire for recognition or social requirements, while they see themselves as focused on impact, first and foremost. They want impact they can see, and they want to know that their own involvement has contributed to that impact. They want to use any necessary strategies, assets, and tools – new or old – for greater impact.

3) Time, Talent, Treasure, and Ties: Once engaged, these next gen major donors want to go “all in.” Giving without significant, hands-on engagement feels to them like a hollow investment with little assurance of impact. They want to develop close relationships with the organizations or causes they support; they want to listen and offer their own professional or personal talents, all in order to solve problems together with those whom they support. They have grown up volunteering, and they still want to offer their time, but in more meaningful ways, not just holding a seat on a gala organizing committee. Like other Gen Xers and Millennials, these next gen donors are highly networked with their peers. They learn about causes and strategies from their peer networks and enjoy sharing their own knowledge and experiences with their peers. They believe that collaborating with peers makes them all better donors, and extends their impact. Put simply, they want to give their full range of their assets – their treasure, of course, but also their time, their talents, and even their ties, encouraging others to give their own time, talent, treasure, and ties.

4) Crafting Their Philanthropic Identities: As much as they discuss what and how they think about philanthropy and what they definitely want to do when they take over, these next gen major donors are still figuring out who they will be as donors. Many are in their twenties, experiencing a move from adolescence to emerging adulthood and developing a sense of self. All are from high-capacity families, where wealth does not always transfer easily to the next generation, and where many adolescents come of age feeling like children waiting to inherit independence on many levels. And lastly, events and conditions specific to these historical generations have left lasting impressions that must affect how they act as donors. How do you craft a philanthropic identity amid these three forces? Mostly, these donors say, through personal experience. They learn most from seeing and doing, or even hearing from others about their own authentic experiences of seeing and doing. Rather than waiting until the sunset of their lives to decide who they are as philanthropists and what legacies they want to leave, these next gen major donors actively craft their identities now and actively think about their own legacies.The process of identity formation is important to all generations, but the process of philanthropic identity formation among these particular next gen major donors is especially significant for everyone affected by major philanthropy in our society.

We have experienced a long period of generational stability in the philanthropic world. The Greatest Generation and the Baby Boomers have created and guided almost all of our key institutions for years. But while we weren’t looking, their children and grandchildren grew up, and now they hold the future of philanthropy in their hands.

     

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