The Education of Young Donors: a Two-Way Street

A new generation of wealthy young people is arriving on the philanthropic scene, with values and attitudes toward giving that differ greatly from those of earlier donors. If the non-profit world is to thrive in the next century, it must find ways to tap into the vision of those donors.

The new generation — which consists of people ages 35 and under — has grown up in a racially diverse, high-tech world in which the distinctions between business, government, and non-profit organizations have become increasingly blurred. Those factors have molded our way of seeing the world. What’s more, unlike past generations, wealthy young people aren’t waiting to do important philanthropic work until we are older, nor are we doing it in isolation. We’re doing it together, and we’re doing it now.

Philanthropic leaders need to actively woo the next generation by putting young people on boards, by creating special youth chapters or divisions, by offering leadership training, and by involving younger people in the governance and management of non-profit organizations. They must also take to heart the next generation’s desire to do things differently. A fresh eye, a willingness to take risks, a passion for advocacy, and young people’s energy and openness are qualities that non-profit leaders ought to see as assets.

But the process needs to be a two-way street. Young people, and especially young donors, must be willing to listen to lessons imparted by those with experience in the philanthropic world. The next generation — which, in addition to amassing much wealth on its own, stands to benefit greatly from what experts predict will be the largest intergenerational transfer of wealth in history — must recognize that it would be counterproductive to invent the philanthropic wheel all over again.

That is not to imply that young donors should do as they are told or blindly follow tradition, but rather that they actively learn about what has worked and what has not. As the World War II generation passes on a financial legacy of trillions of dollars, the next generation must take charge of its finances, get some philanthropic experience, and learn to give money in imaginative, socially effective ways.

Already, many wealthy members of my generation are making conscientious, well-informed decisions about how, when, where, and why to give their money away. Last year, for example, the Third Wave Foundation and the Funding Exchange — both progressive, community-based grant makers — sponsored the first Young Donors Retreat. The event brought together a diverse group of 40 young, wealthy people from across the nation, ranging in age from 14 to 35.

As a group, according to an anonymous survey of retreat participants, 20 of those 40 people gave away nearly a million dollars of their own money in the previous year, which represented 21 per cent of their annual pre-tax personal incomes. That is well above the national average — and staggering when compared with the 3 per cent to 8 per cent that wealthy individuals generally give.

Participants in the retreat grappled with issues related to how to get, spend, save, and give. Nearly every discussion focused on how the next generation’s idea of philanthropy differs from ideas of the past — and especially how we must expand participation in the world of philanthropy across lines of race and class.

Having grown up in an America where people are taking charge of their own lives, my generation is particularly attuned to breaking down the class distinctions that have traditionally separated donors from grant recipients. Indeed, many of us occupy both roles at once, so we recognize that effective social-change efforts must include significant dialogue between donors and organizers. We also recognize that the definition of donor — and the celebration of that role — must include all people, regardless of their income or assets, who give to causes they care about.

What’s more, many young donors bring an informal, hands-on approach to philanthropy that differs greatly from the formality of the past. Unlike previous generations of philanthropists, many young donors are not wary of being labeled “rich” or “wealthy.” Instead, we recognize that change involves our rolling up our sleeves and working across boundaries of economic class and race.

Because young donors have grown up in a global, high-tech, corporate culture, many also do not see the business world as antithetical to the pursuit of socially beneficial ends. In fact, many of us are interested in finding ways to apply the business savvy that led to the creation of our own wealth to our philanthropic pursuits.

Successful non-profit groups of the future must recognize the validity of those skills and sensibilities and provide innovative, hands-on ways for the next generation of donors to use its philanthropic dollars. Today’s non-profit leaders need to be active teachers — conscientious mentors who hand down the lessons they have learned while realizing that young people will adapt that legacy to suit their own experience. For its part, my generation must be willing to listen and not focus merely on demanding that it be heard.

The influence that the next generation will have on the traditional agendas and structures of the philanthropic world is certain to be profound. My generation must continue to become involved in philanthropic activities, while today’s non-profit leaders must cultivate our passionate energy and vision. If both sides do their part, philanthropy — and society — may well be the biggest beneficiaries.

Catherine Gund is a co-founder and board member of the Third Wave Foundation and the first third-generation trustee of the George Gund Foundation, in Cleveland. She is 33.