Millennials and Gen Z Redefine Charitable Giving: A New Era of Activist Philanthropy
A groundbreaking new survey from Bank of America Private Bank reveals a seismic shift in charitable giving, driven by wealthy millennials and Gen Zers. These younger high-net-worth individuals are not simply writing checks; they are actively engaging in activist philanthropy, prioritizing hands-on involvement and public recognition over anonymous donations. This generational shift is poised to reshape the charitable landscape, demanding a new approach from nonprofits and wealth advisors alike. Their commitment to social change transcends traditional notions of philanthropy, demanding a more comprehensive and integrated approach to impact investing.
Key Takeaways: A New Generation of Givers
- Activist Approach: Younger high-net-worth individuals (HNWIs) are far more likely to volunteer, fundraise, and mentor than their older counterparts, viewing themselves as active agents of social change rather than simply donors.
- Public Recognition Matters: Unlike older generations, younger donors crave public acknowledgement of their contributions, emphasizing the importance of visibility and recognition in their philanthropic efforts.
- Cause-Driven Giving: Homelessness, social justice, climate change, and the advancement of women and girls are top priorities for younger donors, contrasting with older generations’ focus on religious organizations, the arts, and military charities.
- Strategic Giving Vehicles: Younger HNWIs are more likely to utilize sophisticated giving vehicles like charitable trusts, family foundations, and donor-advised funds, reflecting their proactive and well-planned approach to philanthropy.
- A Holistic Approach: The younger generation views philanthropy holistically beyond financial contributions, integrating “time, talent, testimony, and ties” rather than merely “treasure” (financial contributions).
A Paradigm Shift in Philanthropic Engagement
The Bank of America Private Bank survey, encompassing over 1,000 respondents with more than $3 million in investible assets, paints a compelling picture of this generational divide. While 91% of respondents across all age groups donated to charity in the past year, motivations and methods differ significantly. Older donors (over 44) frequently cite a sense of “obligation” as a primary driver, while younger donors (under 43) are more influenced by “self-education” and peer interactions, indicating a more conscious and values-driven approach.
Younger Donors: More Than Just Money
The study underscores the younger generation’s preference for active participation. They are twice as likely to volunteer and more than four times as likely to act as mentors compared to older donors. Their engagement extends to fundraising, where they are twice as likely to solicit donations from their networks. This highlights a move away from purely transactional giving towards a more deeply integrated and personally fulfilling approach to social change.
Older Donors: The Legacy of Traditional Giving
While older generations remain highly charitable, their approach often differs. Their contributions are frequently driven by a sense of duty or tradition. Their giving largely stems from a sense of responsibility and established practices, although their underlying motivation to “make a lasting impact” resonates across generational lines.
Causes and Vehicles: A Generational Divide
The causes championed by each generation also diverge. Younger donors show a strong preference for addressing contemporary social and environmental issues: homelessness, social justice, climate change, and the advancement of women and girls. Conversely, older donors are more inclined to support religious organizations, the arts, and military charities. This reflects both evolving societal priorities and differing life experiences shaping their individual philanthropic journeys.
Strategic Utilization of Giving Vehicles
The younger generation’s strategic approach is evident in their choice of giving vehicles. They are over four times more likely to utilize charitable trusts, family foundations, and donor-advised funds, demonstrating a sophisticated understanding of long-term impact and estate planning. This systematic approach underscores their commitment to effective and sustainable philanthropy.
Implications for Advisors and Nonprofits
This generational shift demands a reevaluation of strategies for both wealth advisors and nonprofits. Dianne Chipps Bailey, managing director and national philanthropic strategy executive at Bank of America Private Bank, emphasizes the need for a holistic approach, incorporating “the five T’s: time, talent, treasure, testimony, and ties.“
A New Dialogue: Integrating Philanthropy Early
Bailey highlights the eagerness of younger donors to discuss philanthropy proactively with advisors, even before investment planning. “They have a hunger to know more, to learn more about philanthropy,” she notes. This necessitates a shift in advisory practices, integrating philanthropic discussions into the initial stages of engagement.
The Importance of Recognition and Public Celebration
The survey reveals a striking difference in the desire for public recognition. Younger donors are more than three times as likely to gauge the success of their efforts based on public acknowledgement. Nearly half are willing to associate their names with their philanthropic work, a stark contrast to the largely anonymous giving prevalent among older generations.
“Praise them, celebrate them, give them visibility,” Bailey advises. This highlights the significance of public relations and engagement strategies for nonprofits in attracting and retaining the support of this younger generation.
Reframing the Language of Giving
Even the terminology needs reevaluation. A Foundation Source report indicates that only 27% of young donors identify as “philanthropists,” preferring terms like “givers,” “advocates,” or “changemakers.” This shift in self-perception underscores the importance of using language that resonates with their values and identity.
Conclusion: Embracing the Future of Giving
The confluence of unprecedented wealth transfer and a new generation’s activist approach to philanthropy is reshaping the charitable landscape. The $80 trillion set to be inherited in the coming decades necessitates a strategic understanding of this evolving dynamic. Courting and engaging this younger generation of wealthy givers is paramount, not only for their financial contributions, but also for their fresh perspectives and innovative approaches to social impact. Understanding their motivations, their preferred causes, and their desire for recognition will be pivotal in fostering a more inclusive and effective philanthropic ecosystem, ready to tackle the complex challenges of the 21st century.
