Gen Z, Millennials Look Beyond Financial Contributions for Charitable Gifts
Foundation Source, a provider of cloud-based solutions for private foundations and planned giving, released Shaping Tomorrow: How Gen Z and Millennials View Charitable Giving, a quantitative and qualitative study of over 1,000 Gen Z and Millennials between the ages of 18 and 43.
Of the Millennial respondents, which had an average income of $98K, 87% made a financial donation in the past year. Of the Gen Z respondents, which had an average income of $59K, 71% made a financial donation in the past year. However, both groups also engage in a range of non-financial charitable activities as testament to their commitment to social change, including donating items (80%), volunteering time (54%), helping with fundraising (30%), and sharing expertise/knowledge (25%).
Overall, the next generation (NextGen) envision growing their charitable giving footprints with 80% of respondents aspiring to be described as a 'giver', 63% an 'advocate', and 55% a 'changemaker'. They shy away from the label of 'philanthropist' -- only 27% said the term resonates with them. The younger generation gravitates more toward catalytic terminology which they associate with contributing to larger systemic change rather than a more passive approach of individual giving.
"There is much discussion around preparing advisors and the broader wealth management industry for the great wealth transfer, but in order to be truly effective, we need to gain a more thoughtful understanding of how NextGen thinks about giving back and creating impact," said Joseph Mrak, CEO of Foundation Source. "This research offers insight into what the future of philanthropy may look like, and the aspirations Gen Z and Millennials have for driving change in new ways."
Awareness of Giving Vehicles
While both Gen Z and Millennials demonstrate active engagement in charitable activities, many are not aware of the ways in which they can optimize their giving through tax efficient vehicles. Three in ten have never heard of donor-advised funds, and more than one-third are not familiar with impact investing (35%), trust-based philanthropy (36%), or giving circles (35%). However, both Gen Z and Millennials are interested in learning more about the range of giving tools, with giving circles at the top (43%). Gen Z in particular would like to learn more about donor advised funds (41%), trust-based philanthropy (34%), and family foundations (33%).
"Gen Z and Millennial giving has taken shape in informal and hands-on charitable activities like volunteering, donating goods, and making individual contributions directly to causes they are passionate about," said Gillian Howell, head of client advisory solutions at Foundation Source. "However, they are still in the early stages of their philanthropic journeys and are open to learning about different methods that could help maximize their impact. This is a key opportunity for advisors and nonprofits to educate the next generation on how different approaches can help them do more with their charitable dollars and shape their giving for years to come."
Among the key trends from the report:
- Generational changemakers: Gen Z and Millennials aspire to be seen as givers, volunteers, advocates, humanitarians and changemakers.
- Primary drivers: Whether Gen Z or Millennial, their inspiration to get involved in charitable activity is primarily driven by family, having a passion for a specific cause or issue and wanting to help their local community.
- Gender differences: On the whole, women are more likely than men to want to make an impactful change to a cause and demonstrate their family's values; men, on the other hand, are more likely than women to want to create or continue a legacy.
- Starting young: Millennials who engage in charitable activities started at an average age of 18; Gen Z started even younger — at age 14.
- Money matters: Financial contributions were influenced by each participants' financial resources. Monetary donations are more common among high earners, college graduates and employed individuals. And high earners donate greater amounts.
"Gen Z and Millennials have faced a unique geopolitical, social, and economic landscape, including unprecedented crises and world events as they come of age and enter their peak earning years," said Hannah Shaw Grove, chief marketing officer at Foundation Source. "These events have shaped a generation focused on grassroots social change, and we expect to see them increase their financial contributions to such causes as they accumulate more wealth. It's essential that we provide NextGen with strong support and guidance to help them navigate their evolving role in the charitable community."
The preceding press release was provided by a company unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of the staff of NonProfit PRO.
