The new philanthropists
Lyn Tomlinson, Wealth Planner, considers how a new generation is giving to worthy causes and why their focus has switched to issues like climate change
There has been a great deal of discussion about the potential of the next generation (next gen) of philanthropists. Born between 1964 and 2000, they will shape support for good causes for decades to come, but are they really that different from their parents and grandparents?
Recent research from the Johnson Center for Philanthropy is the first study to ask the next gen what they think, rather than summarise what others think of them. It suggests that they are more similar to the previous generation than we may have believed.
In terms of their priorities when it comes to giving, while the older generation are naturally more focused on health and religion, the next gen is more likely to support environmental causes. Interestingly, both generations cite education and basic needs as by far their main focus of giving.
The next gen’s respect for legacy is apparent in their strong sense of stewardship, and is reflected in whom they look to for support when developing their own philanthropic identity. This should give some comfort to families that their legacies are safe in the hands of their children.
But while the generations are aligned on many philanthropic objectives, what’s clear is that their approaches to philanthropy differ, with the next gen excited about innovation and ideas for change.
Who influences Next Gen Donors
Source: Johnson Center for Philanthropy, Next Gen Donors: Respecting Legacy, Revolutionizing Philanthropy
The next gen philanthropist can be described as having a total impact approach that encompasses all of their assets, whether those are business, investments, time, talent or their network. They want to be hands-on and to involve themselves in philanthropic causes now, rather than waiting until they are older.
Many are drawn to impact investing, which is investing with the intention to generate environmental or social impact alongside a financial return. Unable to disconnect how they invest their assets from their values and philanthropic objectives, they invest both for financial return and social change. They allocate capital across the spectrum of responsible investments, from positive to negative screening through to more impactful, higher-risk allocations such as social entrepreneurship, outcomes-based contracts, microfinance or the innovative green bond.
Working in partnership
Policymakers are waking up to the fact that it will take a concerted effort of government, private capital and philanthropy to address some of the largest social challenges facing us. This is providing never seen before opportunities for collaboration.
This is important because the next gen want to use their personal talents, as well as their assets, to solve problems alongside their peers.
Because some of the next generation stand to inherit an unprecedented amount of wealth (estimated at $40 trillion), the next generation of donors have the future of philanthropy in their hands. While no more charitably-minded than their parents, the tools available to this generation to help them evolve and improve philanthropy are seemingly endless.
Head of Impact and Philanthropy
Lyn is a Wealth Planning Director and provides investment structuring, retirement and estate planning advice. Lyn has specific expertise in Philanthropy and Social Investment and is vice chair of the ethical asset class committee. She is a Chartered Financial Planner and a Chartered Wealth Manager holding the CISI Masters in Wealth Management qualification.
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