America’s youngest adult generations want to use their money and time to do good but are not always sure how to do so with the best financial outcomes.
A new report from Foundation Source polled around 1000 Gen Zs and Millennials about their charitable giving and found that most had made a financial donation in the past year. This includes 87% of Millennials (average income $98K) and 71% of Gen Zs (average income $59K).
But it’s not just money they are giving as 80% donated items, 54% volunteered time, 30% helped with fundraising, and 25% shared knowledge or expertise.
However, despite the generosity of these young Americans, they do not want to be called the next generation of philanthropists, as just 27% of respondents said that term resonates with them. Instead, they want to seen as givers (80%), advocates (63%), or changemakers (55%).
"There is much discussion around preparing advisors and the broader wealth management industry for the great wealth transfer, but in order to be truly effective, we need to gain a more thoughtful understanding of how NextGen thinks about giving back and creating impact," said Joseph Mrak, CEO of Foundation Source, which provides cloud-based solutions for private foundations and planned giving. "This research offers insight into what the future of philanthropy may look like, and the aspirations Gen Z and Millennials have for driving change in new ways."
Overall higher earners are more likely to make donations and women are more likely to prioritize making an impact. Across all participants, Millennials typically started at age 18 while Gen Zs started at 14.
The study found that awareness of tax efficient ways to donate is low with three in ten have never heard of donor-advised funds while 35% are not familiar with impact investing, 36% have not heard of trust-based philanthropy and 35% do not know about giving circles. Although they are keen to learn.
"Gen Z and Millennial giving has taken shape in informal and hands-on charitable activities like volunteering, donating goods, and making individual contributions directly to causes they are passionate about," said Gillian Howell, head of client advisory solutions at Foundation Source. "However, they are still in the early stages of their philanthropic journeys and are open to learning about different methods that could help maximize their impact. This is a key opportunity for advisors and nonprofits to educate the next generation on how different approaches can help them do more with their charitable dollars and shape their giving for years to come."
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