The Principles of Next-Gen Philanthropy

The current global ‘Great Wealth Transfer’ has provided the next generation with the opportunity to shape the future of philanthropy.

Equipped with passion, innovative thinking, and a commitment to lasting change, a new cohort of socially conscious wealth inheritors – and wealth makers – is emerging.

Next-Gen donors could be categorised as a highly motivated group that is driven by generating positive social impact for the causes they align themselves with. They regularly look beyond traditional philanthropic funding towards more innovative ways to drive social change, like through impact or ESG-related investments. Additionally, they often don’t distinguish between philanthropy and other parts of their lives, seeing opportunities to generate positive change in everything from their consumption habits to career choices.

Here are further key principles about next-gen giving that all advisors should be aware of.

Innovative philanthropy

Millennials frequently respond to global issues with a sense of purpose and urgency, especially on issues linked to inequality, be it gender, disability, racial or economic inequity. In pursuing these issues, they see the potential in campaigning and activism, channelling their charitable efforts towards global movements such as #MeToo, Black Lives Matter or climate action ventures.

Millennial and Gen-Z donors also look to integrate responsible investing initiatives, social enterprise or social finance options into their philanthropic activity. They are also looking at innovative philanthropic structures, moving beyond the traditional trust/foundation models to manage their philanthropic capital, and turning to more efficient giving vehicles like donor-advised funds.

For those who are also leading businesses, they may apply greater time and energy to environmental, social and corporate governance (ESG) and diversity, equity and inclusion (DEI) commitments than previous generations.

Embracing technology

With social media, crowdfunding platforms, and dedicated charity apps allowing donors to quickly find causes they’re passionate about and make donations with just a few clicks, it is now easier than ever before for next-gen philanthropists and campaigners to discover, research and donate to charities.

Next-gen philanthropists have matured in an era marked by unparalleled technological progress. We now live in an increasingly digital environment that has heightened our collective global awareness and forged a determined commitment within the younger generation to collective progress and improvement. The prevalence and ease of online donation platforms has helped to engender a mindset amongst the next generation that philanthropy is more of a responsibility than a random option for those with the means to make a difference.

Joining forces

Next-gen donors recognise the importance of collaboration, often seeking opportunities to join forces with others to tackle large-scale societal issues. They aren’t interested in ‘armchair’ or ‘chequebook’ philanthropy and don’t associate success with forging their way alone. As a result of a globalised upbringing, they actively seek global partners and opportunities to ensure their philanthropic funds can create the maximum – and sustainable – impact on society.

As the great wealth transfer gets underway, advisors need to recognize the unique emerging interests, values and motivations of the inheritors. The next generation of donors are taking philanthropy personally, and they are embracing new technologies, diverse strategies and the strength of collaboration to achieve their impact-driven philanthropic goals.

For more information on how we can support your client’s philanthropic journey, please contact us.

About the Author

Natalie Pinon is Director of Development at NPT UK. She has over 15 years of experience working with philanthropists and impact investors to manage their giving.