The next generation of philanthropists is bringing about a “golden age of giving.”
That’s according to research by Michael Moody, Frey Foundation chair for Family Philanthropy at the Johnson Center for Philanthropy at Grand Valley State University.
He said the next generation of philanthropists has more resources than their counterparts from previous generations, and they also want to “revolutionize giving.”
That includes people inheriting wealth and those “making their own wealth in unprecedented ways — the Mark Zuckerbergs of the world.”
The younger philanthropists are giving and becoming impactful much earlier in their lives, compared even to the most recent billionaire philanthropists, such as Warren Buffet and Bill Gates, Moody said. There was a “golden age of giving” during the time of the Rockefellers and the Carnegies, he said, and now, we’re entering another.
“Baby boomer donors are not going anywhere for a while, but there is some transfer of power and transfer of wealth within the philanthropy space going on right now,” Moody said.
His research used a national survey and 75 in-depth interviews of people in their 20s and 30s who have the capacity for major giving. His most recent book, “Generation Impact: How Next Gen Donors Are Revolutionizing Giving,” discusses the findings.
Questions regarded their preferred giving styles, what they would or would not change about giving, and which causes most interest them.
The bottom line is the younger generation wants to make an impact.
“Finding a way to show the impact to the next generation is really crucial because they are obsessed with that impact,” Moody said.
He found young people want to do more than simply write a check. They want to be involved firsthand with the organizations, making decisions alongside staff about how to tackle issues.
They think “one of the worst things” previous philanthropists have done was to write a check and get out of the way, he said.
“They want to be right there, rolling up their sleeves, getting the work done with them,” Moody said.
The major causes — education, health care, basic needs — are mostly the same, except millennials are more interested in issues such as climate change and human rights, and they are less likely to give to religious organizations and “middleman” organizations such as United Way.
The younger generation also prefers to focus on an issue or organization, rather than spreading their resources over a wide range, Moody said.
For Christina Keller, 36, board chair of the Grand Rapids Community Foundation, that leading passion revolves around poverty and leveraging communities to make systematic change.
“I think communities are the units of change,” she said. “How can we all come together and address the root causes of our problems?”
In better realizing its desired impact, the next generation has a strong disposition for innovation, Moody said.
“They want to try new things, even if they’re risky, if they could potentially lead to greater impact on those causes that they care about,” he said. “They haven’t seen the needle move as much as they think it should.”
This is true for GRCF, said Diana Sieger, the organization’s president. An increasing number of staff members are younger than 40, and as a “bona fide baby boomer,” she is “thrilled” at the way they have helped move the culture toward being more innovative.
Moody said many people of the younger generation believe they can do more good investing in socially responsible companies — impact investing — than they could as philanthropists.
People with strong environmental values would not invest in oil companies, for example. Or, the next generation of families who control endowments might be looking to align investment with a family mission.
Impact investing is something Keller sees as very important, and she has worked with the foundation to make decisions around that, Sieger said.
While Moody’s research covered young people with a capacity for major giving, he said he’s found millennials as a whole care about giving time and volunteering, regardless of income.
All these aspects will have “great consequences” for nonprofits and fundraisers, he said. They will need to consider how they approach their work and engage their biggest donors as more of these people gain the capacity to give.
“Those that recognize what’s coming down the pipes are trying to prepare for it but realizing it’s a heavy lift to make some of these changes,” Moody said. “The payoff is that if you can engage the next generations, they will be loyal, they’ll give more over a longer period of time and they’ll give valuable talent and skills.”
Sieger said Moody’s “cutting-edge” research has influenced work at the foundation.
Over the past several years, GRCF has been working on ways to engage younger donors, said Shaun Shira, director of major and planned gifts.
The foundation’s One Hundred New Philanthropists project, meant to engage the next generation, has four criteria to become part of the group, including volunteering in the community and helping spread the word about the program and foundation.
Keller has provided “good direction” about how to continue that, Sieger said.
Shira added having young foundation trustees, such as Keller, has been a “purposeful” way the foundation has worked to engage that age group.
“The community foundation is dedicated to engaging every type of person and donor in the community,” he said. “We have the word ‘community’ in our name, so for us to reflect the community that is ever-changing in Grand Rapids and Kent County is a very intentional move.”
Key to success, no matter who is donating, Sieger said, is developing relationships— knowing what is important to donors and learning how to engage them best.
“Having that intentionally around being a thought partner I think has helped us engage this next generation of donors, and I think we can confidently hope that they’re going to be our donors for their entire lives,” Shira said.