A number of very good “trends in philanthropy” studies have been conducted over the last couple of years. Below are highlights from a compilation of several reports.*
Gen X-ers and Millennials Could be the Most Significant Philanthropists Ever
- The wealthiest 10% of Americans now own 75% of all the wealth in the country, while the wealthiest 1% own an astonishing 43%. And the wealth gap is growing. The 30th Annual Forbes Billionaires List states that there are 540 billionaires in the U.S.
- If current trends continue, donors from Gen X-ers and Millennials (those in their 20s, 30s and early 40s) will be the most significant philanthropists ever.
- All signs point to their wanting to give in new ways that will reshape philanthropic norms.
Social Media and Social Movement Hashtags are increasingly growing to be a critical part of effective social change efforts locally and globally.
- Charitable contributions from High Net Worth donors have increased significantly.
- From 2003 to 2013: people making $500,000+ increased by 57%. Contributions from people making $10 million or more increased by almost double that rate — 104% — over the same period.
- The number of private grant-making foundations, as well as the revenue they hold, has grown significantly:
2014: 86,726 (increase of 28% over 10 years)
- The amount of assets held in foundations increased 35% over same period.
- Charitable giving deductions from lower income dollars have declined significantly, at close to the same rate that contributions from higher incomes donors have increased. The rate of decline in low-dollar donors correlates strongly with indicators of overall economy security in the U.S.
Focus on Impact
- Philanthropy has become more results-focused for many donors, almost 40% of donors have changed their giving due to increased knowledge about the effectiveness of their nonprofits.
- Additionally, donors are have increased their focus on place-based giving in order to improve conditions in their specific geographic locale.
- Millennials’ worldview is distinct from Baby Boomers. They approach philanthropy with a more global, social and inclusive outlook and express more optimism about philanthropy’s ability to impact the issues most important to them.
- Millennials are much more likely to have incorporated new philanthropic trends into their giving. 60% have been influenced by two or more trends, compared with 37% of Boomers.
- According to the NCFP’s Trends survey, nearly 3 in 5 younger family foundations are exploring how to measure and assess their impact. Meanwhile, nearly one half, 48%, of older foundations are taking similar steps. Expect to see a variety of innovative new approaches for tracking impact.
Advice from Where?
- While everyone is reporting a desire for results, the feelings of confidence and knowledge about effective and fulfilling charitable giving has decreased for many High Net Worth donors. Many relate this to the rise of the next generation, who are in the process of learning. It also relates to the surprising discovery that 62% of families did not try to involve their younger members in family philanthropy and 20% found it inconvenient to involve them due to timing, geography, etc. Thus, not providing educational or learning opportunities for their rising generation.
- Studies have shown that many philanthropists with small foundations do not know the best ways to give effectively. Many are likely to seek advice and value the opinions of other wealthy donors than paid advisors when making decisions about their philanthropy.
- The role of philanthropic advisors is in the process of realignment, as research is also showing that philanthropists are bringing in professional advisors to create and implement education and life-long learning programs for engaging younger generations in decision making around philanthropy.
- U.S. Trust Study of High Net Worth Philanthropy
- 11 Philanthropic Trends for 2017
- Trends Study: Results of the First National Benchmark Survey of Family Foundations
- GildedGiving: Top Heavy Philanthropy in an Age of Extreme Inequality
- The Future of Philanthropy: Where individual giving is going