Education and Nonprofits

Report paints promising philanthropic picture

Social and peer networks will fuel next rounds of giving.

February 8, 2013
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The predicted philanthropic impact of the upcoming generation could be so huge that its legacy might have Tom Brokaw hailing it as the greatest generation of philanthropists.

According to a recent survey by Grand Valley State University’s Johnson Center for Philanthropy and 21/64, a nonprofit consulting division of the Andrea and Charles Bronfman Philanthropies, the next generation of nonprofit founders, volunteers and donors will be more philanthropically involved than any former generation of Americans.

The report is based on an online survey conducted in 2012 of 310 members of Generations X and Y. Gen X, generally considered those born between 1964-1980, and Gen Y, generally considered those born between 1981-2000, contain 122 million people. The report, which is the first of its kind, also is based on 30 in-depth interviews with people between the ages of 21 and 40.

Generations X and Y are expected to inherit at least $41 trillion in cash, assets and pre-bequest transfers, and are likely to direct a large amount of that wealth toward philanthropy, according to the report.

“We really did this because these generations have the potential to be the most significant philanthropists in history and we really don’t know that much about them,” said Michael Moody, Frey Foundation chair for family foundations and philanthropy at the Johnson Center. “They really want to be hands-on in their giving. They don’t want to just write checks. They want to get their hands dirty and give time, talent and treasure.”

The survey came away with four major findings:

  • “Next-generation donors want meaningful, hands-on engagement with the causes that they care about and want to develop close relationships with the organizations they give to, giving their time and talent as well as their treasure.”
  • “Next-generation donors are highly connected with their peers, learning about causes from trusted friends and sharing philanthropic experiences with peer networks.”
  • “Next-generation donors seek to maintain the difficult balance of respecting the legacy of previous generations and revolutionizing philanthropy for greater impact, aiming to use new, innovative, even risky strategies to make their giving more effective.”
  • “For next-generation donors, philanthropy is a part of who they are; it is not just something they do. Young donors start developing their philanthropic identity from an early age by learning through hands-on experiences and looking to older generations, and they are eager for new personal experiences that will help them learn to be better philanthropists.”

The most important influence on the upcoming generations’ philanthropic trends was family, with 89 percent of those surveyed mentioning parental impact and 63 percent attributing their philanthropic goals to the influence of their grandparents. Fifty-six percent said close friends would have an impact on their decisions while 47 percent mentioned peers.

“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,” the report read. “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.”

Perhaps the most crucial factor in understanding the upcoming generations’ philanthropic worldview is knowing that for Generations X and Y, philanthropy is seen as critical to their identity, Moody said. Making a philanthropic difference is more than what they want to do, he said. It’s who they want to be.

This distinguishing altruistic trait will impact their views of the nature of business, he said, prompting a blend of the corporate and nonprofit worlds.

“This blurring of boundaries has already started to affect the business world and certainly will affect them as employees and entrepreneurs,” he said. “They’re eager to take risk around social engagement. They’re very entrepreneurial. That spirit that we’ve seen in the business world is now coming into the philanthropy world.”

Sharna Goldseker, managing director of 21/64, said the high capacity of giving is motivated by values, legacy and an eagerness to steward family philanthropy. When respondents were asked why they want to give, she said, they said they wanted to support a mission or cause that aligns with their values.

Goldseker also noted how highly networked next gen donors are, saying social accountability could fuel the philanthropic engine.

“The rising generation of donors promises to have a powerful perch from which to affect change,” she said. “They’re focusing on strategy and peer networks. This is a crucial moment for the field of philanthropy to learn how to adapt to new networking.”

Hands-on-activity was the top reason many became involved, Moody said. The personal engagement in philanthropic work through mission trips, educational charities and family-funded nonprofits often sparked a passion, he said, adding that many of those surveyed described personal transformational experiences through doing “on the ground” philanthropic work.

“How do you craft a philanthropic identity? Mostly, these donors say, through personal experience,” the report read. “They learn most from seeing and doing, or even hearing from others about their own authentic experiences of seeing and doing.”

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