It’s undeniable that as a charitable generation, millennials are rapidly catching up to (and even surpassing) baby boomers and Generation X.
Perhaps surprisingly to some, millennial entrepreneurs give more than twice as much of their money and time to charitable causes compared to baby boomer or Gen X entrepreneurs. A key takeaway from the latest “Millennial Impact Report” is that millennials utilize the power of collective action; millennials acting in individual small ways can create significant leverage as a larger group.
When you consider that many millennials earn less in real dollars than their predecessors, are burdened with increasing student debt and are years away from owning a homes, this data is encouraging. In fact, millennials are well on their way to becoming the most generous generation in history.
But a closer look at millennial giving indicates an important shift away from the philanthropic patterns of previous generations. The data indicates millennials give more online, in smaller amounts and to charitable groups aimed at relieving suffering rather than to traditional philanthropic organizations.
Of course, any charitable giving is laudable, but it’s important to note that philanthropy is not the same as charity. Charity focuses on easing the suffering caused by social problems, while philanthropy focuses on eliminating the social problems themselves. In short, the purpose of philanthropy is to improve the well-being of humankind by contributing to institutions and organizations that address long-term societal problems.
While millennials are prone to sending money to relief efforts, I have seen firsthand that it’s their parents and grandparents who support the arts, museums, hospitals, think tanks and long-standing charitable institutions such as the United Way, Feeding America and Autism Speaks.
Because the lines are blurring, we need to restate the definition of philanthropy, especially so millennials and their successors will fully appreciate it.
First of all, philanthropy has less to do with money than it does with the giving of time, talent and treasure. This matters because the millennial generation may not (yet) have sizable monetary resources, but they do have time and talent. When combined with a passion for social change, this energy can be channeled into what might be called the “new” philanthropy.
Because the tip of the “donor pyramid” is crumbling as members of older generations pass away, millennials and Gen Z must step up to take their place. It’s important that boomers and Gen X teach the principles behind philanthropic giving so that our vital philanthropic organizations continue to provide for the public good.
Causes come and go, but persistent issues that societies have been addressing for hundreds of years (sickness, social safety nets, poverty alleviation and economic mobility, education and literacy, etc.) endure. Each generation may apply different tools to address those enduring problems, but the strategy of amassing resources behind institutional giving must be passed along. Otherwise, the value of giving is diluted, and large or lasting impact cannot be accomplished.
While it’s true that governments have legitimate interest in things like social safety nets, a common defense, enforcing property rights and contracts, and ensuring free exchange and movement of its citizens, private and voluntary institutions (with their focused philanthropic missions and ability to move quickly with a minimum of bureaucracy) have historically been major drivers of social reform. History is replete with examples of religious institutions, social compact groups, and private research and development dollars tackling temporal and long-term problems in health, science, medicine, technology and education.
Philanthropy is a particularly strong tradition in the U.S. According to Giving USA, American individuals, foundations and institutions gave roughly $427.71 billion in 2018. Of this number, American individuals gave an estimated $292.09 billion to charity. Our system of government relies on citizens to take the initiative with time, talent and treasure to advance education and science, reduce neighborhood tensions, defend human and civil rights, combat community deterioration, and encourage economic advancement.
Philanthropy is democratic; anybody can participate. It is not limited to the elite, the powerful or the wealthy. Any U.S. citizen can use the power of giving (time, talent and treasure) to effect change. Inherent in this is the lesson that giving is not based on the tax code or the intentions of those in power, but rather, on participation in a shared robust, civil and compassionate society.
Philanthropy is an important way of building community, especially when that community looks nothing like what it does for their parents. Millennials are likely a very transient generation — living in multiple places and experiencing multiple jobs (let alone careers). But where they devote their time, treasure and talent connects them in ways that their transitory lifestyle may not.
It’s important to remember the need for humility among all generations in our society. Those with something to teach are as valuable as those with something to learn. Philanthropy is the love of humankind. Charity is the love of fellow humans. When it comes to millennials, it’s highly possible they will be doing both.
