Millennials are buying, investing based on 'social good': Fidelity
Some three-quarters of the younger generation described themselves as philanthropists, compared with 48% of Generation Xers and 35% of boomers.
Charitable giving has deep roots in American society, but it is also subject to a constantly changing landscape. Today, technology is growing increasingly sophisticated and the world is more connected than ever.
Recent research by Fidelity Charitable sought to discern how these dynamics will change the way people give back.
Artemis Strategy Group conducted two studies on behalf of Fidelity Charitable, the first in March 2020 among 3,055 people to ascertain donors’ giving motivations and behaviors, the second in January among 830 participants to detect shifts in donor thinking because of the pandemic and other events. In both surveys, respondents had given at least $1,000 to charity the previous year.
The surveys found that social good is strongly influencing how donors make financial choices. Nearly half of respondents said they have bought products that provide a social benefit, and 20% have invested in socially responsible businesses or investment funds.
Technology has made its easier than ever to uncover, support and share new charitable causes, and millennials are at the vanguard of this transformation.
A quarter of donors surveyed said they have donated through a social media platform; 4 in 10 have accessed an online giving platform, such as GoFundMe, to make donations.
Millennial leadership
Although millennials currently control only 5% of wealth in the U.S., their attitudes, expectations and approaches to charitable giving will revolutionize the social sector as they inherit trillions from their baby-boomer generation, according to the survey.
Some three-quarters of the younger generation described themselves as philanthropists, compared with 48% of Generation Xers and 35% of boomers. They were likelier than older generations to engage in newer methods of giving back, such as impact investing and donating online.
The survey found that although donors overall were only somewhat optimistic that global challenges can be solved, a significant generation gap exists, with 43% of millennials expressing optimism, but only 22% of Gen Xers and 15% of boomers doing so.
The survey findings showed that the events of 2020 compelled donors to adapt their giving approaches, which could significantly affect the future of philanthropy.
For one thing, many donors reconsidered which challenges are most important for society to solve; they placed higher priority on hunger, economic development and racial inequity than they previously did.
Significant numbers of donors also became comfortable using, and more reliant on, virtual tools during the pandemic lockdown, likely accelerating digital trends in philanthropy
The research study found that the social sector is a trusted institution among donors, putting it in a strong position to address some of society’s greatest challenges.
Forty percent of donors in the survey said they prefer to give money to the nonprofit sector than to any other major institution, such as government or business. Not only that, they see nonprofits as go-to experts on addressing basic care needs in communities.
That said, individual charities must adapt to donors’ changing expectations and preferences to remain relevant, according to Fidelity Charitable.
Donors today are accustomed to seamless digital experiences in every other aspect of life, and they expect the same from their favorite charities. Nonprofits must also adapt to millennials’ approach to evaluating charities, which places emphasis on demonstrated impact and transparency.
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