Charities adapt to engage with influential wave of next-gen donors

Article content

Indigenous Climate Action, a not-for-profit organization founded six years ago in opposition to development of the Alberta oil sands, is not shy about raising hot-button issues such as the scourge of colonization and the legacy of environmental racism.

Such messages can be hard for potential mainstream donors to listen to, says Sheila Muxlow, the group’s associate director. So-called “white fragility” often makes older philanthropists uncomfortable with discussing such matters, she says. But the organization has found growing support among next-generation donors with wealth and privilege who have no such qualms.

“The emotional capacities that are there with some of the younger donors that we’ve engaged with has been really heartening,” says Muxlow, who is based in Edmonton. “They have a willingness to have some real conversations and do that deep work to … bring more equity to the world.”

Indigenous Climate Action is among a growing number of organizations in the philanthropic field that are observing and responding to the intergenerational shift in donor values, strategies and practices.

“There is an anticipation of the biggest and most powerful – at least from a dollar perspective – generation of philanthropists that North America has seen,” says Danielle Oristian York, executive director and president of 21/64, an organization in Boston that provides multigenerational advising, facilitation and training for next-generation engagement within family philanthropy and other family enterprises. The not-for-profit practice, which evolved from a program begun by Canadian philanthropists Andrea and Charles Bronfman, certifies philanthropy advisers who help multi-generational families give more effectively.

A major difference for charities to be aware of when it comes to millennial donors is that they “don’t just have to write a check or give a grant, there’s many different ways to contribute,” Oristian York says, especially by tapping into their networks for support.

The COVID-19 pandemic brought families closer together to talk about privilege and race issues, Oristian York says. Younger members were often the ones who led the movement to free up funds sitting in coffers by saying, “It’s urgent, let’s do something. Let’s set aside our strategy and let’s respond.’”

She finds that young people in wealthy families consider themselves “inheritors of the responsibility to give” and are more inclined toward “trust-based philanthropy,” an approach that shifts the power dynamics in giving. They don’t want to learn about issues through reports, consultants and data but through relationships with the people leading and even benefitting from the change they’re investing in, Oristian York explains.

“They want to let go of some of the authority and control over those dollars to say, ‘Hey, you’re close to this problem, what would you do with this money? I’m going to let you choose.’”

Sharilyn Hale, a philanthropic advisor in Toronto who counsels families on charitable giving, says younger philanthropists prefer to support smaller, more nimble grassroots organizations where it may be easier to see the impact of their gifts.

“Ultimately, they also desire strong and collaborative relationships with their charitable partners. This is a cue for all charities to increase their ability to engage, communicate and be candid and transparent,” Hale says.

“It’s a different mindset,” agrees Bruce MacDonald, president and CEO of Imagine Canada, an industry association for charities and non-profits. Philanthropy once was modelled by parents putting donations in church collection plates, he says. Now it is largely invisible, with mum and dad making credit-card contributions online late at night, so children do not necessarily pick up the practice, he says.

Organizations should recognize that the next generation doesn’t necessarily share the trust that their elders place in institutions, MacDonald cautions. Charities need to move from being “donor-centric” to being “cause-centric” and speak to individuals directly, for example through micro-storytelling videos on social media. “If we want to authentically connect, communicate and engage with young people, we have to meet them on their terms.”

The pandemic gave organizations greater access to people with means through digital appeals. It also brought a “higher appetite to move with speed,” and many Canadians came face-to-face with the services provided by charities and non-profits, MacDonald says.

The question now, he says, is, “How do we build on those connections?”

Stephanie Ellis-Smith, a Seattle-based philanthropic adviser to high-net-worth individuals, families and foundations, says younger generations are pushing to explore issues of justice and equality.

Many families today have significant resources, given the recent strong economy, and younger members are asking, “How do you increase your giving commensurate with what you want to achieve and the returns that you’re getting from the stock market?”

Ellis-Smith last year co-founded Giving Gap, an online database for donors looking to diversify their giving portfolio by supporting Black-led and -founded organizations. She says many of these are small, under-resourced groups learning how to connect with major donors, who in turn are looking to engage with them.

One of its significant partners is Benevity, a Calgary-based company that acts as a charitable giving arm of many of the world’s top companies. These firms are finding that the Giving Gap platform and the organizations it presents are resonating among younger employees, Ellis-Smith says.

“They’re saying, ‘I want to be more active, I want to fund more movement building, I’m interested in economic justice issues and indigenous issues,’ all those sorts of things,” she says.

Muxlow says that Indigenous Climate Action works hard to connect with potential supporters and determine “if our values align.” She says that newer donors especially do lots of work up front, reading and absorbing the group’s messages, “and then they come very well-prepared, so the conversations that we tend to get into are very meaningful right from the get-go.”

Young affluent donors “understand that people who are directly impacted by issues are very much the ones who are most capable of coming up with solutions that are going to be meaningful for them,” Ms. Muxlow says. This means they are apt to say, “We want to give you $20,000 and we hope that you can redistribute it to youth who are doing food-security work in their communities.”