Next-Gen Donors: Impacting Philanthropy for Generations to Come

Next-Gen Donors: Impacting Philanthropy for Generations to Come

Mar 02, 2021 Joanne Florino

On February 25, I attended a webinar titled “Generation Impact: How Next Gen Donors Are Revolutionizing Giving.” Hosted by philanthropy advisor Kris Putnam-Walkerly, the presentation featured 21/64 Founder and Vice President Sharna Goldseker, nonprofit consultants to multigenerational families, and Michael Moody, the Frey Foundation Chair for Family Philanthropy at the Dorothy A. Johnson Center for Philanthropy at Grand Valley State University. The webinar was based on the book Generation Impact, which Goldseker and Moody had co-authored in 2017 and then updated and expanded in 2020.

“Revolutionizing” is a headline-grabbing, and a downright scary term for those who believe in honoring donor intent. Are the kids radically revising the mission statement? Tearing down the family portraits in the conference room? Demanding that the foundation dissolve? Not at all, say Goldseker and Moody. This is not about the “what” of philanthropy. In fact, next-gen philanthropists name the same primary causes as their elders—notably education, health, and poverty. Nor is it about the “why,” as they share their families’ desire to make a difference through their giving. This next gen—which Goldseker reminds us can include those in their twenties all the way to those in their fifties—will have an outsized impact because they will have more resources to give and (for the younger next gens) will give for a longer time, primarily because they are revolutionizing the “how” of philanthropy.

They are giving, the speakers agreed, in the interest of impact, particularly around persistent problems. They believe in assembling a group of core grantees, using general operating support and the equivalent of R&D-type grants to develop benchmarks and tools to measure progress, putting the foundation’s assets (the “95 percent”) to work beside the grantmaking budget. They are open to disrupting traditional philanthropy to get results, using vehicles like LLCs and (c)(4)s to extend their reach into the for-profit and policy spheres. They are more likely to cultivate ongoing relationships with the nonprofits they fund, more likely to listen to—and to trust—those on the ground, and more likely to encourage honest conversations about what isn’t working.

We were already seeing many of these practices taking hold in the philanthropic sector before 2020, but the crises of last year certainly spurred the more widespread adoption of new ways of doing the business of grantmaking: streamlined applications, loosened reporting requirements, increased general support grants, more conversations about race, fewer foundation-imposed theories of change. It’s not yet clear if these changes will last through 2021, but Goldseker and Moody believe that the next gen will continue to push innovation. In 2020, Goldseker noted, “they became the donors they’ve wanted to be, and they’re not backing off now.”

Still curious about what all this means for donor intent, I asked if next-gen donors regard donor intent as a helpful guide to lasting values or as an obstruction to moving forward. Moody had earlier referred to the next-gen donors as “respectful revolutionaries,” deeply honoring of their legacies and the values they inherit from their families. Goldseker backed that up with some encouraging statistics: 89 percent of the next gens interviewed said their parents influenced them, while 69 percent said the same for their grandparents. In a family foundation, she reminded, the next gen can have  15 or more years of giving and volunteering before coming to the foundation. Ideally, the family has been communicating about values and the legacy it hopes to leave long before bringing a next-gen member onto the board. But even so, she warned, a family has to be clear about the primary driver of its philanthropy. Is it family togetherness or a specific set of programmatic goals? If the former, donor intent is less likely to become a matter of contention; if the latter, then a family should be wary of giving governmental authority to a non-aligned family member, and should seek other ways to engage that member in the foundation’s work. For some suggestions, see https://www.philanthropyroundtable.org/donor-intent-hub/article/six-ways-to-protect-donor-intent-in-family-foundations.