The term “philanthropist” often elicits a mental image of older wealthy donors. However, the face of philanthropy is changing as younger generations are distinctly more engaged with giving than older ones.
Social impact is integral to how Millennials and Gen Z navigate the world—whether it’s the products they buy or the organizations they support, younger generations want to make a difference. Now, financial institutions have the opportunity to enable the altruistic goals of millions of customers.
Youth are far more generous.
In the wake of the pandemic, giving increased across the board. However, younger generations are leading the charge to make an impact: 46% of Millennials say they’ll give this year compared to only 14% of Baby Boomers and 24% of Gen X, per Investopedia. Similarly, 55% of surveyed Millennial donors expect to contribute over $500 this year, while only 26% of Baby Boomers say the same, according to Frontstream.
The frequency of donations is also up amongst younger generations, with Millennials and Gen Z more likely to donate quarterly while Gen X and Baby Boomers tend to give just two to three times a year.
Younger generations are not only more generous with their dollars, but with their energy and time. According to Data Axle, nearly 50% of respondents ages 18 to 29 said they volunteered with nonprofits and 60% said they discussed and promoted information about nonprofits among their peers. By contrast, only 23% of respondents between ages 45 to 60 volunteered.
Altruism is distinctly tied to how Millennials and Gen Z engage with their communities, both in how they allocate their time and money. Yet few are likely to call themselves philanthropists.
The future of philanthropy is undeniably digital.
Millennials and Gen Z came of age at a time marked by advent of the internet. As the first true digital natives, younger generations leverage technology to interact with the world.
It easier now than ever to be connected to those on the frontlines of social movements. Social media is used as a tool for activism, as young people speak out about injustice ranging from Black Lives Matter to the #MeToo movement.
Social media feeds are flooded with information about different causes, which inspires many to take action. The internet has broadened the ways in which young people are able to learn about, engage in, and support causes.
The internet has similarly changed how young people donate to causes they care about. Checks and cash are a thing of the past as donors opt for the ease of donating online. Last year, online giving grew by 12.1%, with 55% of Millennials expressing a preference for donating online, according to Double the Donation. This new era of digital philanthropy is marked by greater ease and prompts an increased frequency of donations.
Even old-school philanthropic tools like donor-advised funds are taking a turn toward digital with the help of software from Amicus.io. Technology brings greater flexibility and accessibility, so DAF providers can embrace no-minimum offerings. Now DAFs, traditionally limited to use by wealthy philanthropists, are becoming more popular with younger, everyday donors.
Comprising over half of the U.S. population, youth are leading the way to think about philanthropy in a new light. It’s time that we follow and support them.
What this means for financial institutions.
Financial institutions—like banks and robo-advisors—are poised to take advantage of these trends by leading the charge to make philanthropy more accessible to youth by incorporating giving into the online banking experience.
Housing charitable giving alongside checking, savings, and investing reinforces the everyday nature of philanthropic impact. It instills the notion that philanthropic and financial goals are not mutually exclusive—in fact, they’re fundamentally intertwined. By aligning these goals, financial institutions are able to tap into an ever-growing market and empower customers to make an impact.
Fintech innovators like Amicus.io offer digital donor-advised funds. Now, clients of all ages and financial backgrounds can become philanthropists, all from the online experience of the financial brand they trust. Not to mention, it keeps assets within the firm’s ecosystem where they can be invested and grow until donations are ready to be granted.
When you make philanthropy as easy as online banking, charitable impact is amplified.
Let's discuss how you can enable the next generation of philanthropists.