By Amanda Goldberger
For nearly 100 years, philanthropy has looked fairly similar. Early in the 20th century, the giants of the industrial revolution – Rockefeller, Ford, and Carnegie – launched the first “golden age” of philanthropy with the novel concept of organized giving. While modern philanthropy has its roots many centuries earlier, these titans revolutionized charitable giving by establishing dedicated organizations to give intentionally, and mostly independently, in order to address society’s issues.Philanthropy has evolved steadily in the 21st Century. Philanthropists and their organizations are increasingly networked and collaborative with other like-minded philanthropists as well as stakeholders such as government and corporations. Today, there are greater options in the vehicles for giving from traditional foundations to the Chan Zuckerberg example of establishing an LLC that forgoes tax benefits but retains 100% flexibility on who or what to support.
With nearly $60 trillion in wealth transferring over the next few decades to women and NextGen (Gen X and Millennial generations), we can expect to see a more dramatic shift in philanthropy, from who is managing the giving, what they give to, how they give, and why they are motivated to give. Yes, Baby Boomer women are different than NextGen men and women in many ways, but when it comes to philanthropy, the similarities are more striking than the differences.
The Future Face of Giving
Women of all ages and the NextGen are generous. Studies show that as women’s income rises, they become more likely to give to charity than their male counterparts.
Likewise, the millennial generation, young adults born between 1981 and 1996 who are only now entering their peak earning years, are already engaged in philanthropy. The 2015 Millennial Impact Report – a great resource to better understand this often-misunderstood generation – reported that 84% of millennials made a charitable contribution in 2015 and 45% want to use their wealth to help others. This is different from the mindset of elder generations who tend to hold onto their wealth to ensure legacy within their own family. They want to give now and throughout their lives rather than after their careers are over and they are retired.
Shifting Priorities
Impact is an often-overused word in the philanthropic and nonprofit space. Simply put, someone seeking impact is working toward realizing real change and progress on a critical social issue. Women and the NextGen care about return on investment: how will their support and actions make a meaningful difference? They prefer to educate themselves before making giving decisions by taking the time to understand the problem, the potential solutions, and the efforts already underway. NextGen are particularly interested in understanding the impact of their gifts, rather than receiving recognition for giving.
The issue areas touching the hearts of women and NextGen are fundamentally similar to what Boomer men have prioritized. We may see some movement on the margins with an emphasis on the environment, civil rights, and basic needs, but overall the issues will likely remain mostly the same. What will change, however, is their involvement. The NextGen want do more than write checks; they want to use their time, expertise, and connections to help nonprofits and social movements. Their being highly engaged throughout their lives has the potential to be very meaningful to organizations working on social causes, but it will also require nonprofits to work differently to manage this level of engagement.
Peer-Supported: Networked and Collaborative Giving
Women and the NextGen are collaborative and community-minded. They are more likely to join networks of philanthropists, such as a giving circle or crowdfunding, instead of giving independently directly or through a fund as was most often seen with traditional giving. They believe that larger pools of funds increase the power of giving.
Women and NextGen collaborate even when making decisions about their giving. They seek the advice of experts, such as websites like Charity Navigator, nonprofit staff, and financial advisors, or their peer networks to better understand issues and potential solutions. This collaborative nature amongst women and NextGen extends beyond how they give; they also expect nonprofits and other stakeholders to collaborate together to tackle some of the world’s most intractable problems.
Embrace Tomorrow’s Philanthropy
Change is often difficult, but we should embrace these changes and look forward to what the future of philanthropy holds. I, for one, am hopeful that the coming change in how philanthropy happens – with an increasing emphasis on collaboration, addressing root causes of problems, and longer-term engagement from donors – will result in smarter giving and a better world.
Many families will struggle with the shifts in expectations and desires across generations that will come with tomorrow’s philanthropy. My recommendation is for families to see themselves as a team in philanthropy with the elder generations contributing their wisdom and connections and the younger providing their energy and strategy.
Together, you can do more than what you can accomplish separately. The families that I have helped come together to create multigenerational giving plans acknowledge these changes and allow the space required so everyone can find a way for their passions to be incorporated.
I recommend a couple of resources and experts, if you want to learn more: Generation Impact by authors Sharna Goldseker and Michael Moody, as well as the organization Women Moving Millions. You can also reach out to me for advice or guidance for your own families or as an advisor to families with questions about philanthropy.
Amanda Goldberger is an expert in strategic, high-impact philanthropy and the founder of IMPACT Strategies. She has spent over a decade helping individuals and families, foundations, and corporations make smarter giving decisions in order to realize a better world. You can read more at her website: www.impactstrats.com.
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