Many would agree that higher levels of wealth should go hand in hand with giving back more to society – and millennial HNWs certainly agree with this.
Recent research by SEI suggests that wealthy millennials under the age of 40 match the contributions of UHNWs.
What prompts Millennial HNWs to such high levels of giving and do their motives go beyond the feeling of obligation?
The millennial generation are often described as being ‘entrepreneurial’, ‘agents of change’, and sometimes even as ‘disruptors of traditional industries’. Of course, the overarching desire to change the way things are traditionally done is ordinarily a strong characteristic of youth.
Philanthropy is no exception and the younger generation is vocal about their shifting attitudes. Traditional non-profits have been described by millennials as being a “one-way street” so in response there is a growing desire to transform giving into an interactive experience and find new ways of engaging with donors.
The motivation to look for new approaches on how to do “good” is often driven by the desire to measure the impact made by contributions – and research finds millennials wanting to take an increasingly active role in philanthropy.
Similarly, according to HSBC’s Essence of Enterprise research, over half of millennial entrepreneurs say that achieving positive impacts in their community was a consideration when starting their business.
And this trend is not just limited to social entrepreneurs.
Our research with Philanthropy Impact shows that the younger generation’s approach goes beyond the idea of simply giving and donating. While donations remain the main form of support, millennials are over 20% less likely to pursue this route than previous generations. Instead, their engagement is more varied and they are more willing to experiment. Notably, compared to previous generations they spend more time on fundraising and are more likely to engage with other kinds of support, such as share giving and property gifts.
Figure 1: Allocation of philanthropic support
Q: Thinking about your total contribution to all of the causes you support, how would you break down your support into the following categories?
Even though the form of support millennials seek takes a different approach – the priorities remain the same across generations. HNWs are most concerned about health, animal and children’s welfare. However, the younger generation tends to place a stronger focus on education and climate change in particular.
Figure 2: Motivation to give
Q: Which causes do you regularly support?
A desire for impact however, does not always translate into action. Research shows that giving by HNWs increases with guidance and access to professional advice. If advisors can understand millennials’ appetite for impact and the nuances in their approach to philanthropy, then they can provide them with the right kind of support to unlock their potential to do ‘good’ in a new way.
Thought for the week:
“Never doubt that a small group of thoughtful, committed people can change the world. Indeed, it is the only thing that ever has.” — Margaret Mead
News from the world of wealth:
Morgan Stanley Wealth Management launches two sustainable investing portfolios – Business Wire
A quarter of wealthy investors don’t have an advisor – WealthManagement.com
UBS helped raise one of the industry’s largest impact investment funds – WealthManagement.com
Australian regulator gets after wealth management industry – FiNews.asia
Author: Denisa Pritzova, Analyst
Background: Originally from Slovakia, Denisa completed her studies in the Netherlands before moving to the UK. She speaks English, German and Slovakian fluently. She joined Scorpio after completing various internships including at RBS and the British Embassy.
Education: Denisa holds a Joint Master’s degree in International Business from Rotterdam Erasmus University and completed her Bachelor’s degree at Maastricht University in the Netherlands. During her studies she had the opportunity to spend a semester abroad at TEC de Monterey University in Mexico as well as at UCD Business School in Dublin.
And at the weekends: Denisa likes to escape the hustle and bustle of the city, and go hiking or cycling. She also enjoys anything that involves music, and is always looking for an opportunity to go ballroom dancing (or any dancing really!).