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A Big Conversation for the New Philanthropists

A Big Conversation for the New Philanthropists

The philanthropic landscape is evolving to the next level of impact and many of the old guard are struggling with the shift. The Millennial generation is not content to wait around; they are more confident and self-directed in constructing their own hands-on solutions for the planet and its people by finding solutions to social problems.  They are innovative, entrepreneurial, technologically-savvy, sophisticated, educated, collaborative, demanding and seek purpose through measurement. They already make philanthropy and other social engagement more satisfying and effective. Based on ideas such as the 5Ps: planet, people, profits, purpose and performance, they apply business principles and embrace grass roots initiatives as a start-up with a hand-up!

These wealth holders are both inheritors and wealth creators and according to Jonah Wittkamper, co-founder of Nexus Youth Summit, and they are “the most global, transparent, interconnected, and interdependent generation in human history….the most aware of both its ecological footprint and the needs of the earth”.

Recent survey data reports that 42% of next-gens under 30 believe social change is as important as profit, compared with only 26% of those over the age of 45. In addition, 65% of young wealth holders rated charitable activities as an important part of their wealth creation plans compared to 58% for those over 45.  Look at Google, Facebook, Microsoft and Twitter, and a multitude of additional social enterprises like The PVBLIC Foundation, Satisfeito and Comart Foundation for confirming evidence. 

The Millennials are shaking up the way that giving works and are breaking down the barriers between working and doing good. The old guard don’t always like it, but the young know that this is their world now.  Unfortunately, this 21st century giving model places them at times in direct conflict with their elders.

Debate

Old Guard

Millennials

Thoughts/Thinking

Conservatism

Versus

Experimentation

Identity linked to   later life funding of known institutions;

Gravitate to people and   groups with good intentions focus;

Not always interested if   the money is being used effectively, as long as institution is known to them.

Identity linked to   funding grassroots initiatives now with often unknown passionate non-profits,   people and groups;

Gravitate to   like-minded people who are aligned spiritually and share passion and values;

Focus typically on   pre-defined impact and measureable outcomes.

Millennials less   interest in how things have been done and more confident to come up with   their own solutions;

throw money at problems   vs problem resolution;

more grants and   smaller, some research usually done by advisors ….less grants and larger , much   in-depth personal and peer group research .

annual gifting that   often leads to dependence vs multi-year gifting leading to self-sustaining   social economies [and linked to community-led development].

Gifting in local areas and   within known boundaries vs global perspective

Type of  structure to be effective and achieve   purpose

Large infrastructure:

needed to support   institutional needs

Lean infrastructure:

unleash and leverage   community talent

own foundation or   sponsor projects through existing NGOs.

Finding alignments,   understandings and making sense of a more hands-on approach.

Sponsoring other NGOs   rather than doing it all.

Closer connection to   projects and the use of technology as a benefit.

Dealing with the money

Last Forever:

Traditional preservation   of wealth and investment of capital

 is the primary goal and spending is second; investment   choices for capital

Spend-down:

Social entrepreneurs

Spend more than the   amount dictated by tax regulators.

Conservatism and   inconsistency using old approach

Changes the projects   that are funded.

Failure is a waste of   money; experimentation is not considered.

Social economy choices   rather than tradition investments for capital.

Social responsibility   drives profitability in business and for foundation.

Sourcing advice and   making decisions

Use of outsiders:

Product and gap-centric   model and link to same culture and age groups for advice.  Long-time advisors connected to old guard  and forget to build bridges that work to the Millennials.

Use of peer network:

Consumer-centric   problem solving model with extreme flexibility and peer collaboration and   beneficiary feedback.  Interested in   advisory service providers who understand the new directions [and have good   understanding of the traditional methods for context].

Gifting priorities   often identity- and emotion-driven vs assessing impact balanced by emotion.

Different methods and   styles to gather and harness grantmaking information effectively and make   decisions [frequent use of advisors vs peers].

Use of technology to   strategically manage projects and risk vs more traditional methods.

Inter-generational   respect by advisors and especially old guard advisory challenging relationship   at times with young wealth holding philanthropists.

Business for personal   profit which may be directed to private philanthropic purpose vs business for   social and personal profit which is directed to transparent impactful philanthropic   purpose.

 

Same Game – Different Focus

The old guard and new philanthropists have similar values on giving and are partners in this game as the elders opened broad avenues of giving and saw themselves as generals leading their change agenda.  The Millennials are now in charge and it’s their turn to focus on specific areas and achieve results as partners in a more focused agenda.  Although they appear to derive some inspiration from the elders, no real heroes have emerged.  They look to their generation and trust what they observe. 

I don’t think the two perspectives are polar opposites, rather I think that a misalignment and misunderstanding of the process has derailed the likely agreements on the same outcomes.

Let the big conversation begin and let’s take philanthropy to the next level.

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