Your charitable giving has allowed you to make a lasting imprint on society, your community and the world. Now you would like your children and grandchildren to become involved in charitable giving. Including younger family members in your philanthropic activities is a way to pass on personal values, share experiences, establish family traditions and promote a spirit of cooperation. You may even have a goal of preparing your children or grandchildren to manage a family foundation. Indeed, they may play a key role in creating social and environmental benefits for future local and global communities.
Getting family members involved in philanthropy[1] also may be an important part of your overall wealth transfer plan. In this guide we will provide options on how to engage and educate your family in philanthropy. From entry points to starting philanthropic conversations, to ideas on how to involve family members, to sharing information about new philanthropic tools being used, we lay out a path that can help you influence the next generation of philanthropists.[2]
EXPLORING GENERATIONAL DIFFERENCES[3]
The three key trends that shape generations are parenting, technology and economics.[4] While not a hard science, examining the events and conditions that each generation experiences during their formative years can help inform why some family members make decisions the way they do, encourage empathy among family members, and build ties across generations. Taking a closer look at the five living generations — Traditionalists, Baby Boomers, Generation X, Millennials and Generation Z — can help us learn more about what influenced them and how that may affect their philanthropic tendencies.
Traditionalists (born before 1945) witnessed the invention of airplanes, automobiles and cinema. Traditionalists were influenced by World War II, the Great Depression and segregation, which left them feeling cautious, yet with a deep sense of loyalty to the people and institutions that provided opportunities for growth. Representing 26% of total philanthropic donors, Traditionalists tend to fund institutions both local and civic in nature, often giving back to the communities where their wealth was created and to the people whose experiences mirror their own.[5]
Baby Boomers (born between 1946 and 1964) are referred to as the “generation of workaholics” and have been influenced by the civil rights movement, the Cold War, political assassinations, the sexual revolution, space travel, and women’s rights. Despite having lived through tumultuous times, this generation has maintained their spirit of optimism and invests in charitable causes that are important to them. Boomers are the largest group of philanthropic donors among the generations, representing 43% of total giving.[6] They are currently the leaders of many public charities and family foundations in the United States.
Generation X (born between 1965 and 1980) makes up the smallest generational cohort but is the third largest giving group among the five generations. Gen Xers were shaped by the fall of the Berlin Wall, the energy crisis, Watergate, and women’s liberation. This generation experienced a very different upbringing in relation to parenting norms, as the divorce rate tripled during their childhood. As a result of more women joining the workforce during this time, many Gen Xers became “latchkey” kids.[7] They are often referred to as “social entrepreneurs,” having founded several nonprofit organizations such as Teach for America, charity: water, Venture for America, and Dress for Success, among others.
Millennials (born between 1981 and 1996) are currently the largest generation in the U.S. labor force. Their formative experiences were affected by the September 11, 2001 (9/11) attacks on the World Trade Center and the Pentagon, the Oklahoma City bombing, the Columbine high school massacre, the Iraq War, the development of the internet, social networking sites, reality TV and the 24-hour news cycle. The effects of 9/11 and other tragic events created a deep sense of civic responsibility to vote and volunteer. They are motivated by the desire to live in a world free of danger and to create a better life for everyone.
Generation Z[8] (born after 1997) embraced the first African-American President of the United States, Barack Obama, witnessed the fight for marriage equality and have experienced the dramatic effects of climate change. In fact, 76% of Gen Zers are concerned about humanity’s impact on the planet.[9] Seeing their parents endure the instability of the Great Recession, this generation tends to be more frugal with their finances, building their savings earlier than older generations.
Generation Z is optimistic yet realistic about the challenges ahead. Eighty-nine percent are optimistic about their futures, which is higher than any other generation on record.[10] Gen Zers are very independent, having been taught that there are definitely winners and losers in life. Since many Gen Zers are still completing their academic education, there has been less time to draw definitive characteristics about their habits and what their philanthropic preferences might be. However, we have seen them begin to engage with charities by volunteering, with 26% of Gen Zers raising money for charitable causes.[11] They also have a socio-entrepreneurial spirit which may influence the organizations they are willing to support and which furthers their interest in starting nonprofit organizations in the future.
Embracing diverse interests, values and generations in your philanthropic activities can strengthen your family’s charitable giving. It also is important to recognize the perspectives of each generation to facilitate multigenerational philanthropy.
FOR MORE INFORMATION
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If you would like to learn more about these and other services offered by Northern Trust, contact a Northern Trust professional at a location near you or visit us at northerntrust.com.
