No doubt as a wealth advisor, you know that over the next 25 years, nearly 45 million U.S. households will transfer over $68 trillion in assets to heirs and charity. And you realize that this wealth transfer isn’t just happening in the United States; it’s happening around the world. India (home to 119 billionaires) will experience a $128 billion intergenerational wealth transfer over the next decade alone.
The portion of these assets used for social good represents an upcoming “philanthropy boom.” Who will be receiving this wealth transfer? Largely millennials. They’re a generation that’s grown up knowing hardship and unemployment, but that’s still more generous than other generations. While the number of dollars they donate hasn’t yet surpassed other generations, the percentage of people donating has.
Millennial donors are different from their parents and grandparents. They often orient themselves as international citizens, prefer more “collegial” forms of governance and focus on causes like civil rights versus sectors such as health care.
Many millennials use technology-centric giving vehicles and approaches, from crowdfunding to impact investing. But they’re also hungry for personal connections and often seek road maps and guidance from their peers.
While it’s exciting to think about how these new approaches, ideas and energy will help solve today’s problems, it’s safe to say that these next-generation philanthropists are still human. They’ll need help sidestepping some universal pitfalls that often go unnoticed and hold donors back from their full potential.
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