There is a very interesting article in Barron’s this month about GenX philanthropists and how they could completely change the face of philanthropy. In the midst of what will likely be a philanthropy downturn given the economic climate, young philanthropists are stepping up much earlier than their elder counterparts did. These GenX philanthropists (aged 28-42) are giving much earlier than older philanthropists who began giving in their 50s and 60s once they had amassed a sizeable amount of wealth. And young philanthropists are determined not just to contribute to charity, as their grandparents and parents did, but rather to have a significant impact and make a real difference. They want to be involved in the organizations they invest in. And in fact, these GenX philanthropists are already more generous than their parents. In 2006 GenX millionaires gave an average of $20,000 to nonprofits, double the charity of their parents and grandparents.
They are also blurring the lines between philanthropy and profit. As Peter Kellner, managing partner of Uhuru Capital Management, a hedge fund that will invest 5% of its profits to entrepreneurial ventures in developing markets, says: “[We] combine the desire to achieve and the desire to do good. Why should we artificially separate these two drives in our everyday lives?”
Although the article doesn’t mention it, I would argue that this young breed of philanthropists is also more interested in bringing solutions to scale and investing in the capacity and long-term sustainability of nonprofit organizations. Young philanthropists are interested in impact and the convergence of creating profit and creating social good. It follows, then, that they would be interested in projects that have a high social return on investment, through expanding a nonprofit’s impact and/or making it more sustainable. So, for those organizations looking to scale and build sustainability, you might target young philanthropists to invest in your organization.