Let’s set back the clock for a moment: Think Carnegie. Major philanthropists for generations were lauded for bequeathing massive gifts to foundations and institutions dedicated to long-haul social benefits. They had no expectation to see their causes and issues resolved within their lifetimes, as the largest gifts were typically given at the end.
Today’s mega donors are giving staggering amounts long before their golden years and expect to see results. Our “NextGen” (consisting of Generations X, Y and Z) are wealthier at younger ages and hungrier for impact than any prior generation. This manifests in the form of new and creative strategies to support the causes that matter most to them.
LET’S BREAK IT DOWN.
Younger and Wealthier
Today’s mega donors are wealthier at drastically younger ages because two huge economic shifts are taking place.
WE ARE IN THE MIDDLE OF THE GREATEST CONCENTRATED WEALTH TRANSFER IN HISTORY…
A 2014 Boston College Center study on Wealth and Philanthropy indicates that there will be a generational transfer of over $59 trillion between 2007 and 2061, with 20% of wealthy families accounting for 88% of the wealth transferred during that time. The same study indicates that $27 trillion, or 45% of the total transferred will be earmarked for charitable purposes.
YOUNG ADULT TECHIES, HEDGE-FUNDERS, AND OTHER YOUNG ENTREPRENEURS ARE ENTERING THE 0.1% AT UNPRECEDENTED RATES…
In the streets of Silicon Valley, NextGen is also busy creating and innovating multi-million dollar companies and accumulating enormous wealth in the process–all incredibly young age.
More Innovative and More Impatient
NextGen yearn to see real results: a clear goal with clear progress towards that goal, today. In order to obtain those results, many are using some of the same innovative business strategies that helped them amass their fortunes in the first place, employing technology, data and metrics for social change. The borrowing of business metrics from the start up and private industry has led to new ways of approaching impact assessment.
NextGen tends to search for the most promising organizations that can make the largest impact, assessing them much in the same way that one would assess the health of a business.
Unsurprisingly, with impact as the main objective, this means they are more likely to have clearly attainable goals with guaranteed results, as opposed to more lofty yet uncertain goals. Think paid internships in arts for underprivileged youth, as opposed to the widespread philanthropic white whale of curing cancer.
The Next Generation of major donors are younger, wealthier, and more calculating than ever before. They want to see instant results unmistakably spelled out for them, and prefer to measure impact the same way for-profit enterprises might measure their own bottom line. They are not interested in status quo philanthropy, happy to invest in unique models that maximize efficiency and retention without sacrificing impact. This is a group accustomed to instant gratification from their innovations, a characteristic that has bled into their approach to philanthropy.
NextGen expects philanthropic organizations to either transparently demonstrate impact or step aside for organizations that will. We’d be wise to pay heed.