As younger generations of wealthy individuals rise to prominence, they are redefining the way philanthropy is approached. A new study from Bank of America Private Bank has revealed that millennials and Generation Z are more likely to engage directly in charitable causes through volunteering, fundraising, and mentoring, rather than simply donating money.
This generational shift is not just a trend; it’s a movement that is set to profoundly reshape the charitable landscape. Wealth advisors and nonprofits must take note, as these younger donors are demanding a more involved, activist approach to giving.
Young Donors as Activists, Not Just Donors
The survey, conducted with over 1,000 respondents who each had more than £2.5 million in investable assets, found that wealthy individuals under the age of 43 see themselves as active participants in social change, rather than just passive philanthropists. Unlike previous generations who primarily focused on financial contributions, these young donors are keen on giving their time, talents, and influence.
Dianne Chipps Bailey, managing director and national philanthropic strategy executive at Bank of America Private Bank, commented: “They view themselves as holistic social change agents. The younger generation wants to leverage their wealth and their personal networks to drive real, lasting change.”
Generational Differences in Philanthropy
While philanthropy remains a strong priority for wealthy individuals of all ages, younger donors are approaching it with a different mindset. According to the study, 91% of the wealthy respondents—both young and old—had given to charity in the past year. Yet, the motivations and methods differ significantly between the generations.
Millennials and Gen Z donors, the survey found, are more likely to get involved in the causes they support through volunteering and helping to raise funds from their peer networks. They are twice as likely to act as mentors and four times more likely to sit on nonprofit boards, compared to their older counterparts. In contrast, older donors, particularly those over the age of 44, are more inclined to give out of a sense of obligation and tend to focus on financial contributions.
A Focus on Peer Networks and Activism
For younger philanthropists, giving is a more social activity. Many are motivated by the influence of their friends and social circles, as well as a desire to self-educate about pressing social issues. This differs markedly from older donors, who are more likely to cite traditional values of responsibility as the driving force behind their philanthropy.
Bailey noted that even though younger donors are still building their wealth or inheriting it, their focus on activism and peer involvement is likely to persist. “You can think of philanthropy as the five T’s – time, talent, treasure, testimony, and ties,” she explained. “The older generation is focused on the treasure. The younger generations are leaning into the other four.”
Different Causes, Different Priorities
In addition to differences in how they give, the causes supported by younger and older philanthropists also vary. Millennials and Gen Z are twice as likely to donate to efforts aimed at addressing homelessness, social justice, climate change, and the empowerment of women and girls. In contrast, older donors are more focused on supporting religious organisations, the arts, and military-related charities.
This divergence is likely influenced by the societal events witnessed by younger generations. “When you think about what they’ve been through in recent years, especially in 2020, they’re leaning into the response,” Bailey said. “And it’s sustained. So many people move their giving with the headlines, but they’ve really dug in deeply.”
The Implications for Wealth Advisors and Nonprofits
The shift in how younger generations approach philanthropy has significant implications for both wealth advisors and charitable organisations. The study found that younger donors are more likely to use giving vehicles such as charitable trusts, family foundations, and donor-advised funds—many of which were established by their families.
Bailey stressed the importance of incorporating philanthropy into early discussions with wealth advisors. “They have a hunger to know more, to learn more about philanthropy,” she said. “They’ve already got these complex [giving] vehicles at the ready, so the education piece is critical both for nonprofits and for the advisors.”
With an estimated £65 trillion set to be inherited by the younger generation in the coming decades, this shift in philanthropic engagement is expected to have a lasting impact on the charitable sector. For wealth advisors and nonprofits, engaging with this new generation of donors will be crucial. “You need their perspective and you’re going to need their money,” Bailey added.
Public Recognition: A Key Factor for Young Donors
The younger generation also values public recognition for their charitable efforts. According to the survey, they are three times more likely than older donors to seek public acknowledgement for their philanthropy. Nearly half of the young respondents said they associate their names with their charitable work, while over two-thirds of older donors prefer to give anonymously.
“Praise them, celebrate them, give them visibility,” Bailey advised. However, she added, the younger generation prefers to be seen as “givers” or “changemakers” rather than “philanthropists.” A separate report from Foundation Source found that 80% of young donors prefer labels like “advocate” or “changemaker,” with only 27% accepting the term “philanthropist.”
Conclusion
The rise of wealthy millennials and Gen Z as social change agents marks a significant departure from traditional philanthropy. With their focus on involvement, peer networks, and activism, they are reshaping the charitable landscape. As the next generation of givers continues to grow in wealth and influence, nonprofits and wealth advisors alike will need to adapt to meet their evolving needs and expectations.
