By way of inheritance, Millennials and Generation-Z will be recipients of the next great wealth transfer. While estimates vary on the exact amount, there is no disputing that these recipients of wealth will become the richest generation in history over the next decade. A vast majority of this amount will be invested into philanthropic organisations, including family foundations, and will substantially impact generations to come. Incoming generational cohorts have shown to have strong characteristics that indicate a high interest in philanthropy and social impact– which will cause a considerable shift in the wider philanthropic landscape. However, many philanthropic wealth owners find that engaging the next generation is a challenging process.

In collaboration with Innovest Advisory, this webinar discussed the importance of engaging the next generation in philanthropy. More specifically, it explored the following questions:

• What are the characteristics of the next generation and how will that influence the ways in which they engage in philanthropy?
• What strategies can we employ in inspiring a philanthropic legacy for the next generation?
• How can outgoing philanthropists engage and educate the next generation in strategic philanthropy?
• How can organisations develop relationships with the next generation of donors?

What we learnt:

• The next generation of philanthropists are changing the face of global philanthropy through the following key driving influences:
  • A growing global consciousness around social inequalities and the escalating climate crises,
  • A greater need to move beyond ‘just’ aid and a binary focus on the ESG principles. The next generation have been garnering recognition of the fact that traditional models of developmental aid and philanthropy alone are not enough to bridge the significant SDG financing gap. The world’s most challenging social problems will not be achieved by ESG investing alone. More capital is needed, along with deep, intentional and measurable impact investing.
  • A growth in transparency and accountability, brought on by greater capabilities of technology and greater access to information,
  •  A greater need to determine impact, ensure legitimacy, and the accountability of impact investments. The next generation tend to be hyper-focused on the results and impact of their funding – having a thorough due diligence process in place is essential. Elements of due diligence include background checks, clear company management structures, a governanc structure, an impact strategy, etc.
• Philanthropy is witnessing the largest ever intergenerational transfer of wealth. Baby-Boomers and Millennials are amongst the beneficiaries and are largely committed to being more conscious about how they live and want to make a positive impact and contribution to the world.
• The next generation has strong characteristics that will influence the ways in which they engage in philanthropy. These characteristics include being innovative, having a collaborative mindset, and a focus on accountability, tech, and investment beyond the deployment of funds – such as connecting with beneficiaries through volunteering.
• Characteristics of the next generation also include a focus on solutions and the application of a human-centred approach to development challenges. They largely make decisions led by empathy for beneficiary communities and support solutions that are designed from the bottom-up.
• Millennials today are hyper-focused on wanting to track where their funding goes, and the impact it has made. Results-based approaches to funding that demonstrate the success of solutions and highlight areas for continuous improvement are preferred
• Key strategies to engage the next generation include:
  • Family structures: Making use of existing family structures such as Charitable Trusts, Foundations or Family Offices to bring them to the discussion table.
  • Impact through innovation: Design thinking approaches to ideate around a problem with peers and develop potential solutions.
  • Learning by doing: The next generation tend to prefer a more hands-on approach, and want to be involved through volunteering with charities, going on experiential learning trips or by taking up a role in the boardroom through an investment position.
  • Drive Accountability via Data: The next generation can be engaged through designing evidence-based interventions that have effective results frameworks in place and use impact measurement technology to track, measure and prove the long-term positive impact of these interventions.