September 19, 2014; Wall Street Journal
Among the spate of recent articles on the charitable giving of millennials is this one from the Wall Street Journal. It reports that millennials are much more committed to “giving back” and much less “entitled, needy and self-absorbed” than some might believe. In the 2014 Millennial Impact Report produced by a consulting firm called Achieve, 87 percent of millennials reportedly made financial contributions to nonprofits last year. Financial advisors might find millennials an attractive potential clientele, given that the WSJ estimates that $30 trillion in the intergenerational transfer of wealth will land in the wallets of millennials “over the next several decades.”
Philanthropic advisor Betsy Brill suggests that financial advisors must be aware of the differences between millennials’ approach to philanthropy and their baby boomer parents’. Experts suggest, according to the WSJ article, millennials favor “socially conscious, globally minded charities that champion civil rights, good business practices and environmental protection, among other issues.” That is in contrast to their baby boomer parents, who “prefer to give to local charities that support the arts or cultural institutions such as museums.”
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The article quotes Ben Pierce, the president of Vanguard Charitable, who suggests that boomers are more interested than millennials in reducing their tax obligations through charitable giving. “Provide less tax talk and ask them about their personal passions and interests,” Pierce told the Journal. Chicago-based philanthropic advisor Ken Nopar added that millennials aren’t interested in creating philanthropic legacies—meaning, presumably, endowed philanthropic institutions—but “are more interested in the impact their donations can make today rather than decades from now or after they’re dead.”
Citing the examples of crowdfunding and the ice bucket challenge, financial advisor Ted Jenkin suggests that millennials are interested in discussing “social movements.” Jenkin reported that many of his young clients, as a result of his discussing the ice bucket challenge, gave $100 apiece to the ALS Association “even though it may not have been their charity of choice.” He believes that it shows that millennial donors want to be part of a larger social movement. “Millennials want to make the world a better place,” he added. Brill suggests that toward that end, millennials can be introduced to concepts beyond charitable giving such as socially responsible investing, shareholder advocacy, and proxy voting.
Making judgments about the behavior and interests of millennials compared to boomers is fraught with the danger of oversimplification. Another lens for looking at charitable giving behavior might be in comparing the philanthropic interests of the donors who earned their wealth, compared to those who stand to inherit their wealth. Other disaggregation might be based on gender or race. However, based on the Journal’s commentary about millennials and philanthropy, does it sound like the Journal captured the behaviors and interests of millennials correctly? Might the implication be that museums and cultural institutions are in for a tougher fundraising road because they aren’t prominent on the radar screen of millennials? Does this analysis suggest that the days of foundations established “in perpetuity” are numbered as more and more millennials establish foundations or donor-advised funds structured to “spend down”? Will the purported “social movement” interest of millennials lead to an upsurge in giving for civil rights and human rights?—Rick Cohen