A recent Bank of America study found that while the vast majority of affluent Americans donate to charity, age and gender play a major 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 philanthropic solutions at Bank of America Private Bank.
Over 1,000 high-net-worth individuals (age 21 and older) with at least $3 million in investable assets were surveyed, with 91% responding that they’ve made a charitable contribution in the last year.
How They Give
Diving deeper, key differences in giving begin to emerge. Based on the survey results, direct giving with a financial contribution 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, mentorship and sitting on a board. These findings align with studies showing younger generations tend to diverge from traditional philanthropy.
Younger generations are also more likely to use charitable giving vehicles such as charitable trusts, family foundations and donor-advised funds, citing benefits such as maximizing potential tax benefits, supporting long-term giving and simplifying the process of giving.
Motivations for Giving
In addition to affecting how HNW individuals give, age also plays a role in motivations for charitable giving. All generations aspire to create a lasting positive impact, but older generations feel more of a responsibility to give. 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 self-educating themselves on causes and the influence of their social circles.
Both sets 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 back their philanthropic efforts publicly—younger donors place a higher value on the visibility of their charitable endeavors. The prevalence of social media use among the younger set is likely a factor in why they’re more likely to gauge 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 shoulder the responsibility of instilling the importance of philanthropy in their children, with 46% of women surveyed responding that they’re 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 become involved in philanthropy due to their ideas than vice versa.
While a majority of men agree 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 glaring divides among the generations highlighted by the survey is the future of giving. Younger donors are confident that their generation is prepared to assume philanthropic leadership (88%) and believe the next generation will surpass the effectiveness of previous generations (86%). The older generation, however, is skeptical of the next generation being prepared 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. Just 27% of respondents are currently discussing philanthropy with an advisor. Of those not currently discussing charitable giving, 32% of Gen X and 21% of baby boomers expressed interest in doing so.
