In recent years, the landscape of charitable giving has undergone a significant transformation, driven predominantly by the youthful spirits of wealthy Millennials and Gen Z. This demographic is not merely rewriting the rules of philanthropy; they are reframing the conversation entirely. A study by Bank of America Private Bank highlights that young, high-net-worth individuals view themselves as agents of change, actively engaging in social causes rather than simply contributing funds. This represents a seismic shift in how wealth is utilized for social good, prioritizing activism and personal engagement over traditional donation practices.
According to the survey that captured the sentiments of over 1,000 individuals with at least $3 million in investable assets, those under 43 are dismissing outdated notions of philanthropy. They favor active participation—volunteering their time, fundraising, and acting as mentors—over the more passive approach of writing checks. While the overarching commitment to charity remains strong, with 91% of respondents noting charitable contributions in the last year, the motivations and methods diverge significantly across generations. Young philanthropists are eager to roll up their sleeves, indicating that they seek deeper involvement in initiatives that address pressing social and environmental issues.
Dianne Chipps Bailey, a key figure at Bank of America Private Bank, emphasizes this departure from tradition: “They view themselves as holistic social change agents,” she notes. This framing suggests that the next generation sees philanthropy not as a prerogative but as part of a broader responsibility to society, signaling a shift toward more dynamic social accountability.
Motivation: A Generational Divide
The motivations behind giving also reveal important distinctions. For older generations, particularly individuals over 44, the impetus often stems from a sense of obligation—charitable acts fulfilled as responsibilities assigned by societal norms or family traditions. In contrast, young affluent individuals exhibit a desire to educate themselves about philanthropy, allowing their social networks to influence their choices significantly.
The generational divide showcases a fundamental transformation in how charitable endeavors are perceived. Younger donors, in their pursuit of meaningful impact, are more likely to engage with causes that resonate personally—such as homelessness, social justice, and climate change—compared to their older counterparts, who tend to support traditional institutions like religious organizations and the arts.
Bailey refers to the “five T’s” of philanthropy—time, talent, treasure, testimony, and ties—highlighting the variance in giving styles. While older individuals often emphasize financial contributions (treasure), younger generations are focused on integrating multiple dimensions of giving into their philanthropic activities. Their engagement with time and talent reflects an understanding that impactful change requires multifaceted approaches. This perspective underscores the notion that charity extends beyond monetary transactions; it is equally about fostering relationships and creating systemic change.
This paradigm shift poses both opportunities and challenges for wealth advisors and nonprofits alike. As the younger generation inherits vast wealth—estimated to be over $80 trillion in the years to come—understanding their unique preferences and motivations becomes vital for successful engagement. As philanthropy increasingly becomes a family affair, the involvement of younger individuals in complex giving tools, such as charitable trusts and donor-advised funds, is poised to rise.
As wealth management professionals pivot to meet the needs of this new wave of donors, it is important to acknowledge their desire for recognition. The survey indicated that younger philanthropists are far more likely to seek public acknowledgment of their contributions compared to their predecessors, with nearly half indicating a preference for associating their names with their philanthropic initiatives. This contrasts sharply with older donors, where anonymity often reigns supreme. Acknowledging this craving for visibility is crucial; as Bailey aptly states, “Praise them, celebrate them, give them visibility.”
In doing so, wealth advisors can create a supportive environment where younger philanthropists not only feel valued but also empowered to make meaningful contributions to society. Engaging with them early and often about philanthropic strategies—before discussions about investments—will cultivate a strong foundation for ongoing dialogue.
Ultimately, the wave of Millennial and Gen Z philanthropists is not just reshaping giving; they are setting a new precedent for what it means to be a philanthropist in the 21st century. Charitable engagement is increasingly about holistic involvement, social impact, and public recognition. For wealth advisors and nonprofits, adapting to this evolving landscape will not only be beneficial but necessary to harness the immense potential that these young givers represent. As we move forward, it becomes clear that the future of philanthropy is bright, driven by new ways of thinking and doing.