One last one Bank of America study found that while the vast majority of wealthy Americans donate to charity, age and gender play a large role in their motivations, priorities and giving strategies. “Generational and gender experiences shape worldviews and values, influencing cause selection and how people give,” said Jennifer Chandler, head of philanthropy solutions at Bank of America Private Bank.
Over 1,000 high net worth individuals (21 and older) with at least $3 million in investable assets were surveyed, with 91% responding that they have made a charitable contribution in the past year.
How do they give?
Delving deeper, key differences in giving begin to emerge. Based on survey results, direct giving is the most common form of philanthropic involvement, with nine in 10 older donors and nearly half (49%) of younger donors citing it as their preferred philanthropic approach . However, younger donors prioritize direct action more than their older counterparts, such as volunteering, fundraising, mentoring and sitting on a board. These findings are consistent with the studies showing younger generations tend to deviate from traditional philanthropy.
Younger generations are also more likely to use charitable vehicles such as endowments, family foundations and donor-advised funds, citing benefits such as maximizing potential tax benefits, supporting long-term giving and simplifying the giving process.
Motivations to give
In addition to influencing how HNW individuals give, age also plays a role in the motivation for charitable giving. All generations aspire to create a lasting positive impact, but older generations feel more of a responsibility to give back. Older generations also feel a slightly greater need to respond to an urgent issue and are more driven by their faith traditions. Younger generations, on the other hand, are more motivated by educating themselves on the causes and influence of their social circles.
Both groups of donors are fairly equal in supporting universal causes such as hunger and poverty, as well as health care and educational opportunities. Younger donors lead in supporting efforts related to homelessness, human rights, social justice and climate change, while older donors prioritize giving to religious organizations, animal welfare and military charities.
Older donors prefer to give anonymously (69% of respondents), while younger donors want to support their philanthropic efforts publicly—younger donors place a higher value on the visibility of their charitable efforts. The prevalence of social media use among the younger group is likely a factor in why they are more likely to judge the success of their efforts by public recognition and their influence on others.
Gender Differences
According to the study, gender also plays a role in one's philanthropic preferences and involvement. Women bear the responsibility for instilling the importance of philanthropy in their children, with 46% of women surveyed responding that they are more likely to teach or talk to their children about participating in philanthropy. Women are also twice as likely to inspire their spouse/partner to get involved in philanthropy because of their ideas than vice versa.
While most men agree that they will continue to support the same causes as previous generations, women are breaking barriers by supporting causes important to them, such as the advancement of women and girls.
The future of giving is … unclear?
One of the most obvious generational divides highlighted by the survey is the future of giving. Younger donors are confident that their generation is prepared to take on philanthropic leadership (88%) and believe the next generation will surpass the effectiveness of previous generations (86%). The older generation, however, is skeptical about preparing the next generation to take on and support philanthropic causes. They also believe that their children demonstrate lower levels of commitment to giving back. Only the future will tell whether the older generation is in for a pleasant surprise or the philanthropic sector is in for a rude awakening.
Advisors can play a role in shaping the future of giving. The survey identifies an opportunity to fill the gaps in advisor discussions. Only 27% of respondents are currently discussing philanthropy with an advisor. Of those who do not currently discuss giving to charity, 32% of Gen X and 21% of baby boomers expressed interest in doing so.