The end of the name plaque?

Is social status losing importance in philanthropy?

Walk into a theater, a museum, or a social services building, and you are likely to find plaques bearing the names of the philanthropists whose dollars made the space possible. These donors have enriched countless lives, supporting art, culture, research, basic services, and more.

If some of the latest research is to be believed, the plaques may become rarer. This is due to the fact that who it was that gave money, to whom they gave it, and for what reasons is changing. I quote from a #nextgendonors research paper:

“A relatively small group of Gen Xers and Millennials are inheriting over $40 trillion in wealth, much of that designated for charitable giving. Many are making their own wealth, too. They will be the major donors in America for decades to come; some already are”

And if those participants in the research are to be believed, these younger donors may represent a tidal wave that our current nonprofit industrial complex isn’t quite ready for, not least of which is a shift in motivation for giving:

“Generational differences lie primarily in that much of [my] parents’/grandparents’ giving was socially motivated (gain/maintain social status, participate in certain social circles, be recognized
for contributions). I’m interested in many of the same causes but much less concerned about the recognition and more about participation and impact”

In a separate report, entitled, “#NextGenDonors: The Future of Jewish Giving”, the issues of where the next generation of donor dollars will go and why is addressed head-on.

As context, Jewish communal giving over the past 100 or so years has largely been funneled through centralized organizations, known as Federations. These Federations function similarly to the United Way, through combined fundraising, planning, and allocations. According to the report, younger high-worth Jewish donors are less likely than their parents to give through Jewish Federations (51% vs. 71%).

A part of that shift in Younger Jewish donor dollars is being redirected to secular causes, reflecting a shift, not in values, but in their application. These next gen donors describe a strong connection to their parents’ values, rooted in Jewish tradition, guiding their philanthropy. Their application, though is more universal.

To further quote the report:

“[My parents’] philanthropic approach doesn’t match up with mine 100% because while they focus on the Jewish community, I think it’s also our duty to help those in need throughout the community as a whole.”

As it turns out, these generational differences, in which values are inherited, but applied differently, manifest not only in Jewish-specific vs. universal giving, but also in the types of organizations within those sectors. Just as the entrepreneur and small business person is the hero of this generation, so too are younger philanthropists more likely to support start-up and smaller organizations.

“My parents tend to give to more established institutions and less grassroots-y, local causes. However, our conversations that lead us to those different choices often reflect common values and ideas about community and giving back.”

As if all of these major shifts weren’t enough, the research indicates that the very ways organizations seek to include and engage donors may be in for a shock:

“Giving without significant, hands-on engagement feels to them like a hollow investment with little assurance of impact. They want to develop close relationships with the organizations or causes they support; they want to listen and offer their own professional or personal talents, all in order to solve problems together with those whom they support. They have grown up volunteering, and they still want to offer their time, but in more meaningful ways, not just holding a seat on a gala organizing committee.”

So how can you get out ahead of this major shift and benefit from these younger philanthropists?

1. Serve the whole donor to maximize how they can advance your cause.

Don’t only focus on the dollars younger donors can provide, but also give these philanthropists deep understanding of and exposure to the work and population you are engaging. Look to the skills that person brings from their professional life and leverage those skills. Create a plan for allowing that donor more interaction and involvement in the decision making processes.

2. Create peer-driven environments in which donors can engage with each other

Giving circles, like Natan,have found success with high-capacity younger donors, while JFCS in Minneapolis as formed its board into a modified giving circle with direct allocations authority.

3. Listen

So simple, yet so often under-appreciated. Invite younger donors to coffee and learn what motivates them, what their passions are, and how they might feel most impactful.

While the name plaques may not disappear tomorrow, those who ignore the immense generational shifts in philanthropy may soon find themselves surrounded only by the names of those no longer living, while the time, talent, and treasure of engaged philanthropists is being put in action elsewhere.