As we've talked to people around the country about our research on next gen donors, we've encountered enthusiasm and concern in about equal measure. The enthusiasm leads them to ask a number of unanswered questions: What are next gen donors interested in? What kinds of changes do they want to see in our world? What's the secret to getting them more engaged? The questions of concern are: Will the next generation give at the same level as previous big donors? If I want next gen donors' support, will I have to change how I appeal to them? Just what kind of donors will I have to work with?

But hands down the most common question we hear is this: Are they going to give to the same causes and organizations as big donors of the past?

We get this question from nonprofit leaders concerned that their organization will no longer be a priority. We get it from current donors and socially conscious citizens worried that the causes they care about will be of little interest to the very Gen X or Millennial donors who could potentially make the biggest difference. And we get it from older members of philanthropic families who fret that the younger family members will abandon what they have long supported.

Our answer to this question is mixed. These rising next gen donors are, on the whole, interested in the same big causes and social problems as their parents and other older donors. They don't plan to cut off major funding for health care or education or basic needs or other causes. Nor do they plan to give up on local communities.

In our survey, we asked next gen donors a straight question: Overall, do they support similar or different causes than their extended families and previous generations? Roughly two-thirds (67.1 percent) answered “similar.” When asked to explain, many donors said being active with their families expanded their issue knowledge and built close relationships with specific organizations, so they want to stay focused on those same causes.¹

But (and this is a critical clarification) next gen donors want to support those causes and organizations in fundamentally new ways—ways that they feel will make a much more significant and tangible impact. They want to revolutionize how we give, not necessarily what we give to or for whom. They believe strongly that we need to retool philanthropic strategy if we want to make better headway on substandard education, health disparities, poverty, and other long-entrenched social problems. And this means they won't necessarily want to support the same organizations in the same ways. As we warned, the Impact Revolution will surely ruffle more than a few feathers.

Passionate about Strategy

When next gen donors talk about changing how they want to give, they often characterize these strategic changes as part of a momentous generational shift, not a minor tactical tweak. One donor in her early twenties eagerly proclaimed that “we are really blazing a trail that is very different from the generation that came before.” Next gen donors are excited about making the shift they already see as their generation's historical contribution to improving philanthropy.

In this way, next gen donors are certainly in tune with a significant trend in philanthropic circles toward emphasizing strategy. Calls for “more strategic philanthropy” have dominated the publications and conferences in our field for the past couple of decades, even as that term has been defined in many different ways.² The main thrust of this “new” strategic approach—which, to be honest, connects back to threads interwoven throughout the history of giving—is to give “more from the head and less from the heart.” Strategic philanthropy is driven by sober-minded judgments of how to give most effectively and by close attention to choosing the right methods and means for giving, not just by giving to the right cause. It criticizes donors who are driven solely by their passions or their emotions.

We can see why this approach might appeal to these emerging big donors. They are becoming aware of the philanthropy field right at the time when this is the dominant discourse, and this focus on “better strategy for better results” is extremely attractive because it prioritizes impact. In fact, we think next gen donors want to take this emphasis on strategy to revolutionary levels, not just make incremental or tactical shifts.

But it would be wrong to say that they don't have passion and that they want to give solely from the head and not the heart. Rather, their passion is strategy. For Generation Impact, good philanthropy is always strategic philanthropy. Giving from the head warms the heart.

Same Issues, Bigger Impact

We, too, were curious to know whether there was a coming shift in the cause areas that major donors fund, so we asked next gen donors which issue areas they support personally and which issues their families support.³ Figure 3.1 shows the top two causes for both as the same: education and basic needs. Many of the other issue areas fell into similar tiers of preference for the next gen donors and their families, though with some obvious variations that we'll discuss later.

Here again, we see that the similarities in causes across generations are more striking than the differences. The next gen are focused on meeting basic needs like shelter and food, just as its parents have been. These donors still want to give to health care at some level. In fact, if we look over the long history of major giving, we note more continuity than change in issues across generations of donors.⁴

But what about the differences that clearly show up in Figure 3.1? Next gen donors show somewhat less interest in giving to some traditional causes like health, youth and family, arts and culture, and religion—though those four causes are still in the top half of the rankings for the next gen. And next gen donors were more likely than their families to give to civil rights and advocacy as well as environmental and animal-related causes.⁵ In fact, unlike their parents, they rank those two causes above the so-called combination organizations—traditionally popular organizations such as the United Way or Jewish Federation that act as a “middle man,” raising money and then distributing that to charities working in a variety of issue areas.

We know that most Gen Xers and Millennials are less engaged in formal religious practices than their parents and grandparents, that as a generation they are more supportive of civil rights for the LGBTQ community and people of color, and that they have grown up surrounded by more widespread environmental awareness.⁶ But what can explain the relatively lower interest in areas like health, arts, or those middle-man organizations?

We think the answer relates to impact. It isn't that these causes are of less interest; it's that it's harder for the next gen to see how they can make a direct, meaningful impact by giving to the types of organizations working on those causes. It is harder for the next gen to develop a close, personalized, strategic relationship with such groups. The health care field has some of the largest nonprofits in any area, and the arts and culture arena is chock-full of traditional institutions known more for their gala events than their dashboards showing improved effectiveness.

This preference for seeing impact (and avoiding large-scale, traditional institutions) might also partly explain the next gen's relatively lower interest in giving to religious organizations. In fact, when we looked at the young donors who said they attend religious services frequently, we actually found they give to religious causes just as much as previous generations. We believe it is partly because they know those organizations firsthand, have a relationship with their leaders and participants, and can see from the inside the impact of giving to them.

These next gen donors we surveyed were echoed by those we personally interviewed. One interviewee explained that he wanted to get away from funding “traditional, big institutions” and instead “get more toward a portfolio of grants that really move the dial on an issue.” Another said that on her family foundation's board, the next generation pushed the family to stop “funding one another's private schools” and instead look for how it could have “an outsized impact for our actual dollars.”

The same can be said for any large nonprofit. Many of the next gen donors told us they much prefer to give to smaller organizations because they can have—and see—a greater impact; they can make a personal connection and catalyze change using innovative strategies. One donor put it simply: “I would rather be involved with a small organization where I can make a big impact than a big organization where I make a little impact. If I work with a small organization, I can make a significant impact, and I can help them drive the change that they need.”

When they were involved in giving to larger institutions, their engagement with specific programs or campaigns is what kept them active. They gave to the piece of the bigger organization that they felt connected to, that they could observe closely.

The lesser interest among the next gen in funding the middle-man fundraising operations like the United Way or Jewish Federation probably has something to do with this size issue as well. Being just a line on a fundraising thermometer is of little interest. Next gen donors struggle to see the impact they are having when giving to umbrella groups because there is too much distance between their giving and any clear outcomes generated.

Strategies for Success

Saying that next gen donors want to change how they give to causes (their strategies for giving) more than the causes themselves begs this question: What strategies do they want to change specifically? As they take the reins of big giving, these donors can't change everything all at once. They need to prioritize which strategies they consider the most essential for expanding philanthropic impact.

When asked to assess the current or traditional ways of giving, some next gen donors got specific about criticizing how previous generations' style of giving was too “informal,” “ad hoc,” “personality-driven,” and “based on connections with people, not necessarily the actual program.” They wanted to move from “passive checkbook philanthropy to more active, catalytic strategies.” They felt like “the traditional philanthropy of writing checks to the Breast Cancer Research Foundation Dinner...lot of that will die off as grandparents die off and there will be a shift.” Katherine Lorenz, a donor whom we introduced at the start of the book and who is deeply involved in her family's multigenerational giving (and who is profiled in Chapter 10), still notes a distinct shift: “We view philanthropic strategy differently from our grandparents. We worry more about the programs inside the buildings rather than the bricks on the outside.”

Other donors saw the shift less as a wholesale replacement of new strategy for old and more as a necessary improvement of past strategy alongside an introduction of the new. This wasn't always easy for them to explain, though. One helpful attempt: “I think it is a blend of accepting, learning, and carrying out some established best practices and in other places pushing back or challenging other best practices or habits that have existed.”

We asked next gen donors what they consider the most important components of philanthropic strategy, choosing from a long list of statements. Figure 3.2 shows the top five vote-getters:

Our data confirmed the appeal of these five elements of strategy over and over. One donor we interviewed succinctly captures the sort of research-based, focused, impact-driven philanthropic strategy the next gen wants to embrace: “Personally, if I had my own foundation and was controlling it with nobody else, I would be very strategic about what I was interested in and narrow it down, educate myself in that area, and make some plan that I felt was going to accomplish some sort of result.”

Below, we summarize each of the first four elements of strategy and show how next gen donors see each as essential for greater impact. We also give illustrative quotes from our in-depth interviews with next gen donors to provide supporting examples in their own words. Chapter 7 deals extensively with the fifth component of strategy, “recommending causes or organizations to others.”

The donor profiled next, Mary Galeti, distinctively illustrates both the desire to change strategy and many of the specific strategies we just reviewed. Mary inherited her role as a donor. Actually, she was thrust into it. Due to the sudden and unfortunate passing of her mother and aunt, Mary found herself with significant responsibility in the family foundation—a foundation that would soon grow considerably in assets due to those deaths.

Faced with such loss, one might assume a woman of 22 might be too overwhelmed by grief or too absorbed in coming of age to serve as a thoughtful and engaged donor and leader. However, Mary's maturity is evidenced in the questions she posed for herself at the time, which exemplify the mix of earnestness and assertiveness we found to be hallmarks of next gen donors. She asked herself, “What kind of donor do I want to be? How can I honor my family's legacy and make an impact with these funds?” As we'll see, her responses to these questions are fascinating.

Mary is keenly aware that this tragic turn in her life also dropped a tremendous opportunity in her lap. She decided to embrace the opportunity by crafting a highly strategic approach for her family's giving, one that makes responsible use of all their assets while still being entrepreneurial and forward-thinking.

Mary's experience diving deeply into the world of philanthropy and social entrepreneurship is a dramatic illustration of points we heard from many other next gen donors. She sincerely wants to be a good steward of a family legacy and to pass that on now to her own children. But she is also excited over how much more impact her family can have if they adopt an innovative philanthropic strategy—if they are more focused, proactive, entrepreneurial, and systems-oriented, yet still careful and smart. In fact, for Mary, being innovative is her family's legacy. And she hopes her kids will adopt and carry on that legacy as well.

In another sense, however, Mary is unlike many other next gen donors. She inherited a family legacy of innovation, yes, but the foundation itself did not have much of a preestablished strategy, nor a strong-willed old guard. She was able to introduce her revolutionary strategy without having to overthrow the old one. Many other next gen donors face a bumpier path to changing strategy.

Give Local—But Differently

We know Gen Xers and Millennials are extremely globally aware generations, growing up in a time of easy access to information. They might, in fact, know more about hunger in Sudan than they do about hunger in their hometowns.

But we also know that they have an ardent desire for personal engagement and for seeing their impact. This desire helps explain a somewhat surprising finding from our research: Next gen donors still want to give to local organizations. “Addressing problems in my local community or hometown” was still rated as one of the top five reasons for engaging in philanthropy. One donor offered an interesting metaphor to explain why she wanted to focus on local giving: “It's almost like when you're sitting in a café and you hear the cacophony all around you, and you literally just want to put your headphones in and stare at your computer. The more globally aware you are—you know of all of these things happening all over the world—the more you really want to hunker down and focus right where you are and see how much of an impact you can make.” This finding will likely come as good news to those who worry that local causes will lose support as the next gen members become big givers.

But remember, how next gen donors want to support local communities, and the types of organizations they want to support, are changing. They want to give locally, but with a new strategy and using new tools. This means that although local causes in general will still get support, some local charities serving those causes will struggle to retain next gen donors unless they offer them new ways to engage.

Similarly, a concern we often hear in the family foundation field—a field dominated by foundations that have deep connections to place—is that next gen donors may never live in those communities. Here, too, we have somewhat good news. Next gen donors connected to place-based family foundations repeatedly told us they are committed to maintaining a focus on their legacy communities, even if they don't live in those communities now. This was Mary Galeti's story, of course, and we heard similar stories from others. To compensate for not living in the town where their families give, these donors often seek out site visits when they are in that area. They also try to develop close working relationships with the organizations their foundation supports. Without those local touch points, the giving from a faraway foundation would be less inspiring and interesting to them because they could not see, hear, or touch the impact.

Local giving can also offer an olive branch to siblings and cousins who serve as trustees of family funds and foundations but who may have disparate interests and community commitments. Here we see the key strategic priority for the next gen that we highlighted earlier: its desire to focus their giving on just a few causes and organizations. Consider how one donor, who is now on the board of his family's foundation, explained a decision he and his cousins made: “We are pretty spread out geographically, so we have decided to focus on the city where my mother and her generation grew up and where the money was actually made and created. It has been nice to keep us focused on something that we all love and care about and also not splinter the focus of the foundation.”

This finding reinforces that there is not going to be a revolution in the causes preferred by the next generation of major donors. The revolution will be in their strategies for giving to those causes.

What Does This Mean?

The next generations of big donors follow their passion in their giving, like other donors. But their passion is to improve philanthropic strategy itself, to maximize impact. This desire to change giving worries many people. Will the next gen give to the same causes and communities? Will it revolutionize philanthropic giving so much that it becomes unrecognizable or, worse, will philanthropy's positive impact on our lives and communities be lost in the shuffle?

The findings we've reviewed in this chapter likely give some comfort, but there is reason for caution as well. Big changes are certainly coming. And like other parts of the Impact Revolution, these changes in how the next gen give will be messy and frustrating for a while. They will certainly force many other people around the philanthropic and nonprofit table to change in turn. But we believe that if we can adjust to this new reality, and if the next gen donors themselves approach the process with humility, sincerity, and patience, then Generation Impact might just make headway on some of our most persistent and troubling social problems.

This coming transformation in philanthropic approach by the biggest donors of the future means they will favor certain organizations, which in turn, means other organizations will likely suffer. This is the harsh reality of the Impact Revolution.

While all nonprofits will have to adjust to the strategic approach of these new major donors, some will have to adapt more than others. Large, traditional institutions will not be able to magically transform into smaller ones, but they can be creative about making themselves seem small to next gen donors. Instead of asking these new donors to contribute to your big fundraising campaign, get them connected to a special program or new initiative, one where they can see their contribution bringing about tangible and meaningful impact. Combination organizations like United Ways or Jewish Federations will have a special challenge. They need to discover ways that next gen donors can feel more connected to the ultimate beneficiaries of their contributions or can feel like they are supporting a strategic, evidence-based solution that gets at root causes.

Next gen donors also want more information and impact measures from nonprofits, and this desire requires nonprofit professionals to be open to gathering and giving that information. The next gen donors' desire to educate themselves about issues and to focus on proven solutions can make them better thought partners for nonprofit work if nonprofit professionals find greater ways to engage them at that substantive level.

As we've seen, next gen donors want to change how we do philanthropy not because they are bored with traditional giving but because they are convinced these changes will lead to better results. They are so convinced of this, in fact, that they feel they have no choice but to make these changes. And they plan to do so whether the older generations come along with them or not—though they'd welcome the company.

This means conflicts over strategy might be a chief source of friction within multigenerational giving families and vehicles like foundations. As Mary Galeti's story illustrates, next gen donors want to lead their families into more proactive, focused, effective, and entrepreneurial approaches. But in families where older generations have long-standing, ingrained commitments to certain conventional methods or favored organizational partners, this eagerness to shift to a new approach will meet resistance. And this resistance—or perceived inflexibility—might lead to the next generation opting out of the family giving process altogether.

Philanthropic families looking to engage the next gen better would do well to find ways to accommodate the passion these rising family members have for new strategies. They can also help these up-and-coming donors feel more connected to the local impact the family has, giving them the chance to see the results of their new plans.

We also advise next gen donors to be careful as they implement their changes so that good intentions do not lead to unintended consequences. The keen focus on attacking root causes and funding “change not charity,” for instance, can sometimes mean neglecting essential, even emergency, services and aid. Focusing so much on upstream causes for future systems change could mean we overlook those drowning downstream today, so balancing the portfolio of giving to address both should be an intentional strategy.

Finally, the call for greater transparency and reporting from organizations could be helpful despite the extra work involved. But it could also tip the balance of power in philanthropy even more toward the donor side, giving donors more control over organizational choices like how to define success or determine which programs take priority. Donors should be sure that their desire for information and research actually becomes their practice, not just something they demand of organizations but then don't use. As one donor we interviewed lamented, “Would I like to be researching organizations and the different types of things that they do, and developing an opinion on what the best way to go about it is? Yes. Am I doing that now? No. Is that a conflict internally? Yes.”⁸

Next gen donors want to transform giving, even if it means some rough sailing along the way because they are convinced their changes will improve giving. As this next gen donor reflects, “The vision I have for how [my giving] might work takes a lot of time; it takes a lot of energy. It is more labor-intensive than the traditional models of philanthropy. But I am really committed to putting in that time. It feels like my calling in life right now.”