Generational Giving Trends
An estimated $59 trillion in wealth will be inherited by Generation X (those born between 1965 and 1980) and Millennials (also known as Generation Y, born between 1981 and 1995) from their aging Baby Boomer parents and grandparents by 2061. Experts predict that their unprecedented resources, both earned and inherited, combined with their visible interest in innovative ways to address global challenges will make them the most significant donors in history.
Many people think of modern philanthropy as the sole province of the independently wealthy or those who have amassed substantial financial gain through a lifetime of achievements.
Donor-advised funds (DAFs), for example, were traditionally established by high-wealth individuals to fund charities. TrustBridge Global has made it possible for anyone—individuals, families, companies, charities, foundations—to participate in a DAF because it charges no minimum to open an account. And, unlike other DAFs, TrustBridge is recognized as a public charity, being structured as a charitable organization at the cantonal and federal levels in Switzerland.
But the profile and expectations of philanthropists are changing. Extensive studies have examined the motivations, goals, and patterns exhibited by the two generations poised to lead the mantle of charitable giving.
The Next Generation of Donors
Sometimes referred to as “next-gen” donors, this up-and-coming group of philanthropists is laser-focused on impact. They’re not driven to donate merely out of obligation, because friends asked, or because their financial advisor waved the tax deduction benefits in front of them. Instead, they want to see the needle move on a range of long-standing challenges that capture their passion.
Seek Rapid and Creative Response
The definition of impact for this group of philanthropists includes finding ways to make giving and grantmaking move faster, to streamline more traditional bureaucratic processes to enable tangible impact they can see. They think globally and strategically, and cost-effective cross-border options that can deliver resources quickly satisfy their goals of accelerated response.
Blur the Line Between Donations and Investments
While they still give through traditional vehicles, such as family foundations and donor-advised funds, next-gen donors are savvy and increasingly interested in impact investing—investments made to generate positive, measurable social and environmental impact alongside a financial return.
Rather than separate their money into silos, they believe they can do as much good or even more by investing significant assets in socially responsible ways or supporting businesses with a double or triple bottom line.
This is not to say that next-gen donors are abandoning their family legacies. They continue to honor those bequests but opt for a different approach and tactics they believe will ensure maximum impact.
While the two generations that make up the next-gen donors are similar, there are a few distinctions regarding their giving motivations and styles.
Generation X
Although small compared to Baby Boomers and Millennials, this generation is financially powerful with a large proportion of highly educated entrepreneurs—boasting 55 percent of startup founders. Thirty-five percent have college degrees, hold more than half of all global leadership positions, and have more spending power than any other generation.
Generation X Donor Profile
Members of this generation are generous, especially in campaigns that involve their workplaces, provided organizations are transparent about their spending. Graphs, charts, photos, and other kinds of proof about how their support makes the world a better place are what motivates this cohort to reach for their wallets. They are more inclined to donate when they trust the sponsor’s philanthropy.
Millennials
Highly educated and culturally diverse, Millennials are known on the whole to be fiscally conservative. They’re considered to be achievement and team-oriented, tech-savvy, and family-centric. More than 35 percent of females in this group have college degrees, and 29 percent of men have at least an undergraduate degree.
Millennial Donor Profile
Much like Gen X, Millennials are more willing to support organizations that demonstrate how their donations make an impact. Giving is important to this group, with more than 20 percent indicating that they want to be known for their philanthropy and view it as an essential part of their identity. They’re passionate donors who are emotionally invested in causes they support.
Maximize Your Gift
Regardless of what generation you belong to or your giving profile, with TrustBridge Global’s lower assessment of operational costs and lower fees, more of your money goes where it’s needed most, rather than to administrative costs.