Younger generations have a new perspective on philanthropy

One of the most significant intergenerational wealth transfers in modern history is unfolding.

Over the next couple of decades, an estimated $100 trillion of global wealth will be passed down in the so-called Great Wealth Transfer.

A significant proportion of this wealth will continue to be channelled towards philanthropy, but the transfer is also ushering in a broader shift in philanthropic thinking as younger generations bring new perspectives on what constitutes purpose, impact and social change.

Shaking things up

What we're seeing in our work with families is a desire among younger people to shake things up. Senior members of families are starting to introduce younger family members into philanthropy and, as a consequence, the next generation is showing some different expressions of philanthropic interest.

These younger people are bringing their individual perspectives to the table - and their concerns and priorities may not align with those of their parents.

The younger generation are often more 'action orientated', have a desire to make systemic changes, and want to see more tangible results. The current generation may prefer to stick with the approaches and formulas they have developed and feel are proven.

Alignment through involvement

Understandably the chosen causes are also different across the generations. Some of the younger generation tend to be drawn more toward environmental and mental health causes, while older people's interests tend to lean more towards physical health, education and the arts.

Introducing the next generation to the family's philanthropic endeavours is almost bound to lead to differences of opinion.

It's important to acknowledge and embrace the differences early on, while trying to build a consensus around an approach that the whole family can buy into.

One family we're working with has two children and they've set aside a dedicated amount for them. One of the children is very interested in sustainable forestry, and the other is interested in addressing homelessness in the community where the family lives.

The family recognised these interests and said to the children "right, you go off and find the projects that you're interested in, and then we'll sit down as a family, discuss them and, in all likelihood, support you".

It's these kinds of conversations that ensure families are aligned in their philanthropic approach now and in the future.