BMO Family Office
The pandemic has changed the way we all view and experience giving. There’s also a new generation in control of wealth and more socially motivated generations aging into discretionary spending incomes. What used to predominately exist as a charitable transaction has now evolved into a philanthropic relationship rooted in long-term impact goals for all generations — from Boomers to Millennials.
This shift in how we think about giving is not a consequence of the pandemic but has been intensified by it. In fact, it’s been a slow progression over decades, heavily impacted by the larger changes in social values from generation to generation. Looking back to the 1950s, society valued authority, organized religion, and order over ideals such as autonomy and liberty. As a result, giving practices were often motivated by guilt, a sense of duty or obligation and often took the form of regular checks to well-known organizations, without any questions.
Twenty-first century giving more greatly emphasizes personal choice and measurable impact. At the same time, social causes like climate change and intensifying political divides have caused donors to become more hands-on with their giving. This trend is counterbalancing, shrinking government funding of charities relative to increasing societal needs. The bottom line? Donors are no longer content to simply contribute to good causes. They want more involvement with the organizations they support — including more say in how their money is spent.
And it's not just high net worth individuals who want to dictate the action of their charitable donations. From a $60 polar bear “adoption” to a $100 million hospital donation, individuals of all backgrounds are researching the organizations they want to support online, often getting involved with the institution first, and then ultimately dictating exactly how they want their donation to be used.
The ultimate of all these examples is the venture philanthropist. Venture philanthropists seek out organizations they deem both good opportunities based on performance and good causes to support based on their social and environmental impact and then turn their gift into investments. For example, a venture philanthropist opens or invests in a restaurant that trains and employs at-risk youth, or offers loans to nonprofit organizations at a lower rate of return.
The nature of giving has changed – and it follows a generational pattern
How and when individuals interact with nonprofit organizations depends on how they view and interact with the world. Whether you’re a person looking to give or an advisor to one, it’s helpful to understand generational giving motivations and processes. Let’s look at each generation and the considerations they typically take before giving.
Our values shape our actions
Taking into consideration the experiences, and consequently, the values of each generation, makes it possible for advisors to begin to understand how clients may wish to help their communities and our larger society. Thus, Millennials will not necessarily assume their Boomer parents’ donation habits. Each generation behaves differently as donors, reflecting their collective histories and values.
 “Generational Giving: Baby Boomer Fundraising Trends, Preferences, and Patterns.”
 “Generational Giving: Generation X Fundraising Trends, Preferences, and Patterns - Qgiv Blog”
 Nonprofit Source “The Ultimate List of Charitable Giving Statistics for 2018”
Stay on top of the latest news and insights from BMO Wealth Management