The idea of what constitutes philanthropy is changing. And driving this shift in thinking are millennials and Gen Z. These younger generations do not think that you have to come from wealth to donate, and that donating money is the only way to be a philanthropist. This is evident from the fact that approximately 74 percent millennials consider themselves to be philanthropists, compared to 35 percent of baby boomers.
It also helps that this next generation will be the recipient of one of the most significant wealth transitions in history. As millennials and Gen Z inherit the fortunes of their baby boomer and Gen X parents, they will go from holding just 3 percent of the global wealth to approximately 60 percent.
These trends and their implications are drawn from a report titled Philanthropy Trends: A Look into the Future by Instituto Beja and Oxygen that attempts to offer a guide to the future of philanthropy and a map of trends and innovations. For this, the team at Oxygen interviewed 22 people from across the world including philanthropists, nonprofit leaders, journalists, and academics. They also delved into studies, articles, surveys, and analyses to provide a perspective on what the current zeitgeist reveals about the philanthropic sector, and the world we live in.
While the report covers a wide range of themes including trends in technology, measurement and evaluation, and communication, this article will focus on what young people think of philanthropy and how they give.
The young engage differently with nonprofits
Baby boomers usually engage with nonprofits because they care about the organisation and its mission. Millennials and Gen Z, on the other hand, are driven by their social conscience and desire for change—90 percent millennials donate because of their alignment with a cause or a mission, rather than due to the organisation itself.
Social media and peers play a significant role in who and what young people support.
However, this doesn’t necessarily mean that young people do not care about the nonprofit’s mission. In fact, they expect a stronger connection with the nonprofit and its cause despite having a smaller donation corpus than the older generation. They are also more vocal advocates of the causes they champion, and are three times more likely to defend a nonprofit they support compared to Gen X and baby boomers.
Social media and peers play a significant role in who and what young people support. They are four times more likely to learn about causes from influencers and celebrities, and 1.5 times more likely to learn from colleagues as compared to traditional donors. An astounding 69 percent prefer to engage with nonprofits over social media.
They want to do it their way
According to the Bank of America Private Bank Study of Wealthy Americans report from 2022, 76 percent of philanthropists from the younger generations want to carve their own path when it comes to giving. Women in particular were more inclined to this idea, with 88 percent wanting to do things differently from their predecessors as compared to 69 percent men.
For this younger set, priorities are defined by a range of factors such as personal identity, political opinion, and faith, much of which might not align with their families’ giving traditions. They also care a lot more about systemic issues such as race, gender, and the environment. For instance, they have been most active during movements for racial justice, political and economic unrest, and times of crisis.
Young givers also understand how their everyday actions and financial resources can aid in addressing some of these entrenched problems, and hence are keen on finding the best ways to use resources and make a bigger impact, whether it is through charities, investing in social businesses, or making traditional investments that consider environmental, social, and governance factors.
The young recognise power dynamics
Traditional donors often offer restrictive funding for specific projects to nonprofits, which leads to extensive reporting and bureaucracy and might not reflect the organisation’s real needs. Young people are more cognizant of supporting the recipient and their mission, thereby creating a more balanced relationship between the donor and the recipient.
They also recognise the power dynamics that exist between the donor and the nonprofit, and aim to dismantle it by allowing the recipient to have more control over their resources. Additionally, young donors are more transparent about their intentions and the expected results of their donation.
They want to focus on social justice
The younger generations acknowledge their privilege, and so they are more aware of their role in addressing social injustice.
A research study conducted by the Lilly Family School of Philanthropy (IUPUI) with donors between the ages of 18 and 35 with a net worth of USD 1 million or more revealed that many of them are looking to social justice philanthropy as a way of tackling this challenge.
Social justice donors try to redistribute power to more people, especially those who are marginalised.
The main idea behind social justice philanthropy is knowing that donation, especially by people with class privilege, is connected with unequal institutional systems and structures of capitalism, racism, sexism, and more. Recognising this, social justice donors try to redistribute power to more people, especially those who are marginalised.
The younger generations practise social justice philanthropy by focusing on four key objectives:
- Reducing harm by withdrawing investments from financial assets and stopping the process of accumulating more wealth.
- Providing resources to the marginalised by offering assistance or mutual aid and by supporting QTBIPOC initiatives or organisations.
- Shifting the power dynamics by ceding decision-making, reallocating wealth for more even distribution, taking actions to make amends for past wrongs, giving stolen or appropriated land back to indigenous communities, and practising advocacy.
- Dismantling oppressive systems by funding grassroots initiatives and organisations that work on community building, and using storytelling to raise awareness.
They look at giving beyond just money
According to a worldwide study by Edelman, 70 percent of Gen Z are engaged with social or political issues. Only one out of every five of them would work for a company that doesn’t share their values. For these younger generations, standing up for what they believe in means more than just giving money.
They might not call themselves activists, but they support the causes they care about with their earnings and expenses. They are most likely to boycott a product, company, or government if they disagree with its political, social, or environmental stances.
Young people want to contribute not only through financial resources, but also through their time, energy, and influence. They vote for political representatives with similar views; sign petitions online; change how they make or purchase a product; and participate in rallies, marches, and protests. They also self-reflect and are willing to learn and question their own prejudices and privileges.
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