Next Gen Philanthropy: Finding the Path Between Tradition and Innovation

This guide offers a series of questions that every next generation donor should carefully consider, as well as recommendations based on the past experiences of other next gen donors. Our goal is to inspire you to dream and consider new possibilities, to plan what joy in giving might look like.

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Introduction

Philanthropy usually prides itself on good manners so we’d like to begin by begging your pardon.

You see, we have some unvarnished truths to deliver:

Whether wealth is a blessing largely depends on you and your approach to it. Wealth can present significant problems; it can also bring tremendous freedom and the unusual ability to pursue the projects of your dreams.

Some families view philanthropy as a way to bind everyone together and teach family members a sense of responsibility. Usually parents and grandparents have this vision. While philanthropy can be a unifying force, it is no silver bullet.

Enjoyment and meaning in giving begin with individual motivations and values. People with wealth share the challenge all human beings face—how to find your own individual way, your own path toward meaning, while also maintaining a connection to family, community and history. You must stand on your own even as you stand in the great and ever-evolving succession of ancestors and descendants.

Philanthropy starts with an inward journey—an exploratory mission into the heart and mind.

If you face the expectations of parents or grandparents or must decide about your role in an existing family philanthropic tradition, self-knowledge can help you engage with, and even influence, family tradition.

The title guide of this series, Your Philanthropy Roadmap, can be a useful planning tool to identify goals for giving and clarify your approach. The Roadmap focuses on five key questions:

Why are you giving?
What do you want to achieve?
How do you think change will happen?
How will you assess progress?
Who will join you?

This guide offers another series of questions that every next generation donor should carefully consider, as well as recommendations based on the past experiences of other next gen donors. It is not designed to tell you what to do or how to think. On the contrary, it starts from the assumption that you are the captain of your destiny when it comes to philanthropy.

Our goal is to inspire you to dream and consider new possibilities, to plan what joy in giving might look like.

Written for emerging philanthropists and for those who are established but considering a slight-to-massive makeover, we want to reveal the potential—as well as the challenges—of giving. And we want to do it from the fresh perspective of what some people call the next generation: those who must decide how to honor the legacy of the past while creating a legacy of their own.

A Broader Definition

A Broader Definition

In common usage, “next generation philanthropy” simply means charitable giving pursued by people aged 18–40. Usually, the term refers specifically to people who inherit wealth. Sometimes it includes those who are expected to participate in established family philanthropy. We would like to suggest broader parameters, without reference to age and with deference to each individual to decide whether or not the term fits. Here’s our un-definition:

Next generation philanthropists are people who see themselves as descendants rather than ancestors, who want to use their wealth to be of service to others.

We believe the term is not bound by age or inheritance. Many donors today, while creators of their own wealth, recognize themselves as “next gen” because their methods of giving are innovative—breaking away from the more traditional philanthropic strategies of the past. While the case studies included in this guide are exclusively those of wealth inheritors, their experience and advice is pertinent to anyone who identifies as a next generation donor.

How Do You Perceive Your Wealth?

How Do You Perceive Your Wealth?

The largest wealth transfer in history is just beginning. One estimate says Baby Boomers will receive an intergenerational transfer of $11.6 trillion—that includes both inheritance and inter vivo gifts.* A huge amount will go into philanthropic organizations, including family foundations, and this money will also greatly impact the generations following the Boomers.

You may have received an inheritance some time ago. You may know that money is coming in the future. Or you may have earned your money. No matter the timing or the means, the key philanthropic question for the next generation is: how do you perceive your wealth?

Is it a burden? A resource? Something to be hidden lest you be accosted for donations? Something to acknowledge publicly as a powerful lever to encourage good works?

For most people, money means freedom. It provides the ability to make choices. Yet, your own expectations—and those of family, friends and peers—can seem to constrain that freedom. Most everyone has an opinion about the proper use of large sums of money—but few know what really abides in your heart, or what it’s like to bear the responsibility of spending wealth wisely.

Here, philanthropy can provide a real option. Not because giving away money automatically confers meaning and joy. In fact, thoughtless giving usually has a candy bar effect—the initial rush gives way to a kind of donor’s “sugar low” and eventually, even regret. No, philanthropy can be an option for the “next generation,” because it politely but unapologetically asks questions of great relevance: Who are you? What motivates you? Why are you here? How can you best serve—not just your community or the world, but your own sense of what really matters?

Philanthropy helps us see wealth as a tool. First, for self-definition. Second, for service. Third, for correcting what you think is wrong in the world. This is not about guilt. It’s about fulfillment. Of course, any individual can seek to find their way without practicing philanthropy. But most people will benefit personally by going through a process of considering what his or her own philanthropy might look like.

No one can be constrained—even by the weight of tradition and great wealth—if they have enough clarity about their own values

We need to come to terms with the fact that maybe we aren’t any more worthy than the next person and maybe the sense of entitlement or lack of sense of entitlement doesn’t need to exist and it centers on you doing the best in your situation … It’s a real opportunity to truly do good, and so if your heart feels moved to do good and to work for change— try and use this opportunity. Do it without fear and without feeling ashamed. That’s the best I can do. - Dawn, a next generation philanthropist whose parents won the lottery when she was 18 years old

Creating a Plan

Do You Have a Plan?

If the answer is no, you may actually be in luck.

Starting from scratch allows intuition to play just as important a role as research. If you do have a plan for giving, that’s also great. It means you have something to field test, to run by valued advisors and friends.

As you might have guessed by now, our purpose is not prescriptive. It’s imaginative. We want you to tell the story of your potential philanthropy and paint your own pictures both before you begin and while you act. Perfectionism and philanthropy do not make good bedfellows—don’t wait until you have the perfect training and experience to begin planning. The trick is to turn the switch of possibility from “off ” to “on”—and then begin to explore what might exist in this world that you would create.

And keep in mind, there is no single right or wrong answer; some of the best learning is gained through mistakes.

It’s worth remembering that plans are meant to be revised and mistakes often teach us the best lessons. So relax and concentrate. In its first stages, a plan for giving is just a sketch of the philanthropy you might want to build. Thinking ahead and creating a strategy does not mean you must stay on that path. The best plans always include review and revision—tying awareness and responsiveness to an evolving clarity of purpose.

For those of you already engaged with giving programs, you might decide to take some time to consider how your existing strategy might change. As new information comes in, as projects succeed or fail, as your own passions ignite, so too can you adjust your course.

The Philanthropy Roadmap can help here, but the essential ingredient is you—your focus, your inspiration, your enthusiasm.

While you work on your plan, here are some ideas to spark how you want to give.

Social Change Giving

One Approach

Resource Generation is a nonprofit organization that provides information, support and networking to “young people with financial wealth who believe in social change.” Their ideas on giving and tips on how to give as a next generation donor, some of which are shared below, are thought-provoking:

Avoid Strings

“If we trust people enough to give them the money in the first place, we need to also trust that they know best how to use it. After all, they’re the ones doing the actual work we’re supporting, so they have the day-to-day experience it takes to know what’s most needed. By giving without strings, we respect the knowledge of those we give to.”

Ask Questions, Start a Dialogue

Simple questions to grantees like “What do you need?” or “How can I help?” seem basic, but they’re “not common giving practice. Donors often assume that they already know what’s best and never even open up a dialogue. So it’s worth reminding ourselves from time to time that to be effective givers we also have to be effective communicators.”

Recognize What You Don’t Know

Ask for help—especially from those people with experience in the area you want to support. Questions can lead to collaboration. “There are activists out there who have committed their entire lives to trying to make that change happen in their community—who know the histories, the strategies and the priorities inside and out.”

Who Benefits From the Giving?

A gift to a soup kitchen and a gift to a city’s symphony orchestra will help different groups. Knowing the end recipient can help clarify your strategy. “The bulk of things rich people traditionally give to—like universities, medical research and cultural events benefit rich communities. Even when funding other issue areas, wealthy people usually tend to give to groups that are run and controlled by those with class privilege.”

What Does Success Look Like?

Our idea of success and our grantee’s idea of success might be different. “We need to ask the groups we’re giving to what their visions of success look like. We need to understand how they evaluate their own progress, both short and long-term.”

Don’t Be Afraid of Failure

“Sometime the most transformative movements and most talented leaders are born out of past failures … Our success as givers isn’t tied to the success of those we give to. Our own success is about process, about communication, collaboration and challenging ourselves.”

Consider Different Forms of Giving

“While there are special rules for charities, there aren’t any restrictions on who individuals can or cannot hand their cash over to. Some nonprofit organizations are certified by the government, which means that giving to them is tax deductible. Other kinds of giving may not save us on taxes, but may still be just as meaningful.”

Be Open

Transparency around giving is a good thing in spite of the potential exposure—both publicly and among friends and colleagues. The manner in which next generation philanthropists take action with their resources “can be just as important as the action itself.”

 

We are walking into organizations that were set up, in many cases, before we were even born. We are rarely given an orientation or the necessary information to be effective participants. When meetings are held across the country or in the middle of the week, it’s hard to skip school or work to be there. Our family funds may have priorities that we don’t agree with. Plus, making decisions as a group of family members certainly isn’t the most efficient way to give. Agreeing on what to fund—or what to have for lunch—can be a challenge. - Alison Goldberg and Karen Pittelman, Creating Change Through Philanthropy: The Next Generation

Are You Connected?

Are You Connected?

Few of us would dream of living a life disconnected from the Internet. But many live in emotional isolation from family, community and heritage.

Some people look to philanthropy to provide the glue for a dysfunctional family. But without communication, effort and outreach by family members, even the most carefully laid out giving program may not make the center hold. The family philanthropy can sometimes become a place for airing old resentments and, without thoughtful guidance, it can split open existing fissure points in the family.

One family shared their initial feedback on their joint philanthropic experience as “wonderful.” The parents and siblings entered the process hoping it would be a place of common interest and a vehicle for creating a shared legacy for future generations. The foundation had no formal leadership, no guidelines or advisors, and a family-only board.

Sadly, this lack of structure ultimately led to bickering as the siblings began to fight over which issues and organizations to support. Old hurts rooted many years back embodied themselves in fights over what were, in reality, small differences that could have been reconciled. After months of fighting, the daughter announced that the family office would be split because her two brothers had stopped speaking with her father and her due to disagreement over the philanthropy. The end of communication sealed the fate of more than the joint philanthropy. Without the means to discuss grievances and differences in opinion, the two family factions never got the chance to get past the misunderstanding and, from that point on, the philanthropy reflected the family’s rupture instead of their shared experience and history.

Obviously, communication is central when it comes to family wealth and philanthropy. But many people who include themselves in the next generation take a passive role and wait for the older generations to reach out and set up opportunities to talk.

Our challenge to you: Get proactive when it comes to forging a connection to generations that have come before.

You may see your parents or grandparents as staid and unwilling to move out of their circles of comfort. You may come from a family with five or more generations of giving tradition. You may be the youngest in your family. Nothing is an excuse for inaction. Here’s why: When you respectfully communicate that you want to be connected no matter the outcome of philanthropic or wealth decisions, you honor the human connection. Once the human connection is sustained, it can be nurtured. You can say clearly—and respectfully—what you want from the relationship and ask what they want. You can seek mutual understanding as a first step.

Author and Harvard philanthropic expert Charles Collier put it this way: “think about values first, product second.” It may require some diplomatic skills, but you may even want to take the lead in this area, initiating a discussion about how individual differences can be recognized and family connection still maintained.

Success in family philanthropy is not measured only by compliance with the law or a mission statement, or even good impact metrics, writes Kelin Gersick in Generations of Giving. Success “must also be measured by the family members’ commitment to the foundation’s work, the satisfaction they take in doing that work together, and the foundation’s ability to evolve and remain vital from one generation to the next. In this sense, a foundation’s success will be measured in the eye of every family member.”

Your parents and grandparents may seek to involve you in the family’s philanthropy. They may offer you a role in deciding which grants the family foundation should give. They may earmark charitable funds for you to grant solely according to your own priorities. Though such offers often come with expectations, they are also an opportunity to connect and exchange ideas.

Is this area filled with fear and loathing for some next generation givers? Definitely. Do mixed families pose special challenges sometimes? Sure. Can it be annoying for one sibling to have to deal with another who controls the family philanthropy? Of course.

Should you give up in light of these challenges? We don’t think so.

Try this: Imagine yourself in your mother’s shoes, or your granddad’s, or your step-brother’s. How do they see the family? What are their values, their fears, their insecurities? What do they see as their role? What legacy are they trying to build?

Everyone is worthy of compassion. And compassion can be contagious when openly espoused. Understanding, connection and communication can follow—all of which keep open the potential for change. All relationships depend on compassion. And family philanthropy is all about relationships.

Philanthropy is, literally translated, ‘The love of mankind.’ It is about taking enjoyment from doing things that help people. You have to choose the things you do strategically and you have to choose things that you will do well… If you choose to do philanthropy in a way that you don’t enjoy, I would bet that you’ll do it badly… It should be the best possible
investment of your time. - Karl Muth, Economist, Author, Legal Scholar & Next Gen Philanthropist

What's Your Philanthropic Calling?

What’s Your Philanthropic Calling?

Taking the time to learn what feels authentic, fulfilling and meaningful in philanthropy can transform your giving.

You don’t have to be a zealot. You don’t even have to have a public profile. A calling just means you have a direction. It means you know what you care about, what your values are and what you want to accomplish. Once you have this knowledge, making decisions becomes much less about your own searching and much more about the merits of each potential project.

As Charles Collier puts it in his book Wealth in Families, it’s a good idea to figure out the why of giving before the how— defining what’s important before deciding what kind of philanthropy you will actually do.

Patience can be very useful here. Not all of us can access our philanthropic passions easily. Cynicism and self-doubt sometimes create major roadblocks. Often, we can feel frustrated because, though we know many things are not our calling, we cannot put a finger on what feels just right. In such a situation, it’s useful to remember that not knowing our calling is often the perfect starting place for a journey of discovery. As Socrates found, questions are often more useful than answers.

Here are a few to get you started:

What excites you?
What kind of project best matches your own dreams, skills and sense of service?
If you were to live your whole life and not attempt one thing, what would leave the biggest hole of regret?

Our guide The Giving Commitment: Knowing Your Motivation may be of value as you delve into what really inspires your approach.

Moving Forward

Moving Forward

People give to people. So goes the old fundraising saying. It’s true, of course. But for the purposes of this guide, we’d like to alter it slightly to the following:

People give with people.

This is one of the most exciting trends among next generation philanthropists. Many of them are committed to the idea of active networking—where their personal involvement in their giving leads to a conscious effort to build new connections with other philanthropists, nonprofit leaders, entrepreneurs, activists, scholars and of course, the lives and regions directly impacted by their philanthropy.

For these philanthropists, the connections provide important feedback loops to gather information on impact and new approaches. They also feed the emotional and spiritual sides of giving—for without human contact, philanthropy is like watching a sunset with your eyes closed.

Soon you will be putting down this guide. As you consider your next steps, we encourage you to start with some informal networking of your own.

Our Challenge

Reach out to another person of wealth who you know shares an interest in philanthropy. Ask them about their experience. If you can’t think of someone you want to connect with, consider attending a conference run by organizations that support next generation philanthropy. (See the Resources page.) The journey of giving is an opportunity to connect—not just with family, but with anyone who can stretch your imagination, expand your ability to make a difference and most importantly, feed your own sense of possibility.