What makes next gen donors tick?
Orginally published in Philanthropy News, issue #72, December 2017.
Q&A with Michael Moody, co-author of the recently published book, Generation Impact: How Next Gen Donors Are Revolutionizing Giving.
Philanthropy New Zealand talked to Michael about the book, his findings and what makes next gen donors tick.
1. What is Generation Impact: How Next Gen Donors Are Revolutionizing Giving about, what motivated you to write it, and why now?
Generation Impact is about the most significant philanthropists ever. That’s a bold statement, but my co-author Sharna Goldseker and I believe it’s warranted. The major donors emerging from the Gen X and Millennial generations will have more financial resources to give than any previous generations, and they have big ideas about how to use those financial resources to create real impact in the world. This historic financial largesse comes from both new fortunes created by younger entrepreneurs and an unprecedented transfer of wealth from older generations.
But these “next gen donors” are “most significant” for reasons beyond just their money. They also want to give throughout their lifetimes, to give more than just money, and most important, to give in fundamentally new ways. They want to revolutionise how big donors try to effect change, embracing many of the innovations and experimental new methods that are already starting to shake up the philanthropic world. This book lays out these plans of next gen major donors and talks about what the coming philanthropic revolution means for all of us—wherever we sit around the philanthropic table.
Given how central these donors will be to philanthropy in the future, and across the globe, I felt we needed to know much more about them and had to write this book now!
2. What were your main methods of research and were there any outcomes that you found particularly surprising?
The book is based on data collected over many years from 20–30-year old donors with the capacity for major giving—capacity coming from their own wealth, from inherited wealth, or through their role in a family-giving vehicle.
I think many readers will be surprised by the portrait of these donors that emerges in the book, especially given the somewhat negative depiction of Gen Xers (often seen as “apathetic slackers”) and Millennials (often seen as “entitled selfie-takers”). These next gen donors—even though they sit at the top of their generation’s economic pyramid—are remarkably earnest about doing good in the world. They are driven by values, not valuables. And while they want to shake things up, they want to do so in the name of having bigger impact on causes that many of us hold dear. They genuinely want to use their power for good, and that’s good news, I think.
3. What have you identified as the key characteristics of next gen donors?
Generation Impact identifies and explores a whole range of key characteristics of next gen donors and the similarities and differences they see between themselves and the previous generations of donors. Most generally, as the title of the book suggests, they are a generation obsessed with impact. In a way, that underlies all the other characteristics. When they say they want to change the dominant strategies of big giving—doing more research and focussing on systems change or a few organisations vs. many—they do so in the name of impact, not just change for change’s sake. When they say they want to try new vehicles or tools, they do so because they are hoping these innovations will have greater impact than the traditional approaches. And when they say they want to develop much closer, more candid relationships with organisations they support, giving of their time and talent not just their treasure, they do so because this will make them better donors, able to give in ways that are most effective.
I think it’s also important to note that while these next gen donors are, indeed, revolutionaries, they are not bomb-throwers like that name might imply. In fact, we call them “respectful revolutionaries”. They are earnest and committed to living their values and want to do so in ways that respect the past. If they come from families with a giving legacy, they want to steward that legacy and find their place in the family story—even if stewardship means taking the legacy to the next level of impact. And instead of wanting to replace older generations of donors, they want to work alongside older generations, on multi-generational teams.
4. How do we help next gens to succeed?
Speaking directly to how families—and professionals working with families—can help the next gen succeed, our book has two primary lessons: 1) take them seriously and 2) help them launch. A next gen hates being at the kid’s table. They want to be taken seriously as leaders with something valuable to contribute. So find ways to demonstrate to them that they have a meaningful role in the family giving, and take their suggestions seriously. They will certainly be coming up with new ideas and new strategies they want to try. Don’t ignore or discount those, even if eventually (after consideration that involves the next gen) you decide not to pursue them.
Also, recognise that the next gen is faced with a complex and difficult identity challenge. They are eager to change things for more impact but also want to find their place in the family legacy. In this mix, they are struggling to figure out their own emerging philanthropic identity—and this identity will then guide their giving for decades to come. They are particularly eager to have learning experiences that help them grow and work through this identity process. Give them those opportunities to learn. Encourage them to sit on boards and to pursue their own philanthropic interests outside of the family. And most of all, encourage them to become their own kind of donors and to find their own way.
5. How do next gen donors honour the past as they transform the future?
This is a common challenge in giving families in the US as well and something we talked about with next-gen donors in our research. First, they acknowledge that it is indeed a challenge, so requires careful attention rather than just being swept under the rug or left undiscussed (as it often is). That’s the most important first step. When addressed, though, I think older generations in a family will be somewhat surprised by how open the next gen is to finding a resolution—and one that honors and continues donor intent and legacy in the family. For one thing, the next gen in giving families are, usually, very proud of that family legacy and feel it is their role to steward the legacy. They plan to do so by making the giving more effective, and they see this as honoring the legacy by “taking it to the next level.” But it is still done in the context of donor intent, we found.
Second, on the geographic challenge specifically, our data show that the next gen actually believe very strongly in the importance of local giving, and if they are from a family with a history of place-based giving, they want to continue that local giving even if they themselves do not live in that community. Part of this local giving is about legacy, but it’s also about the next gen’s preference for giving in hands-on ways, building close relationships with organisations they support, and directly seeing the impact their giving. All of those preferences are more easily met in local giving. Of course, they also want to do this local giving in their new hometown, and they usually do. But they don’t see this as a replacement for giving in the location where their family has traditionally given. They want to do both. So trusts or other institutions facing this challenge would do well to find ways to support and encourage the next gen’s giving in their own local areas—while also continuing the giving in the family’s traditional hometown. This can be done through matching programs and discretionary giving, for instance, with the trust or foundation providing some designated funds for a next gen to give in their current hometown or matching personal funds that the next gen gives there. And, of course, it is vital that whenever the next gen visits the region where the family vehicle gives, they can “see” the impact of that family giving in a way that keeps them committed to it. They will want to continue a family legacy that they see is significant, even if they don’t see it every day.
6. How might New Zealand next gens differ or be the same to American next gens?
Are there global next-gen trends?
Our research was limited to donors in the US, but it is an important question, as there are good indications that a cadre of similarly eager and active next gen big donors are emerging around the globe. The same economic dynamics that mean these donors in the US will be the biggest in history are happening in other countries, to a greater or lesser degree, and so Gen X and Millennial donors from places like New Zealand will be the leaders of the philanthropic landscape there in the future. Here’s hoping someone is planning to do this sort of study in New Zealand. I’d love to help them out!
. . . .
Generation Impact: How Next Gen Donors Are Revolutionizing Giving by Sharna Goldseker and Michael Moody (2017) is available at Amazon.com