Social entrepreneurship is the way to young philanthropists’ hearts, and finance, according to a report published by BNP Paribas Wealth Management together with the Economist Intelligence Unit. Moreover, millennial donors are more interested in projects that are replicable, global, immediate, connected and collaborative than traditional donors, who have long sustained projects focused on long-term, non-profit, regionally based programmes.
Worldwide philanthropy is growing, and millennial preferences are shaping the way it is defined, lending the strength of family legacies through new tools, technologies and strategies, say the authors. Monitoring and accounability are also key fundamentals.
Better travelled and more connected to worlds far away than their parents, millennials’ interest in global causes is an extension of their experience and exposure. They also believe that supporting entrepreneurship is a more sustainable means for achieving their philanthropic ambitions, and particular beneficiaries of this appear to the FinTech, EdTech, renewable energy and food and agriculture sectors.
They're also extremely well-funded, or will be. According to the report's authors, around €30 trillion will be passed down to American millenials over the next 30 years.
The world is a smaller place to millenials, and instead of focusing on a single region, the research showed that millennial want to replicate successes across many places, rather than localising on just one region.
A further reflection of their own culture, millennials are more likely to use social media not only to promote their causes, but also to find grantees, donors, talents and to educate themselves. They also collaborate to find co-investments, co-funding, new ideas, peers and practices.
"Over the past few years, we’ve seen our clients increasingly seek positive impact on society," explained Sofia Merlo, Co-CEO of BNP Paribas Wealth Management. “Millennials especially are pushing the boundaries of traditional philanthropy with a stronger collaborative spirit and a greater use of Impact Investing or Social Entrepreneurship and co-funding opportunities."
Millennials do not feel that they have to be necessarily tied to their family legacy. They strike a balance between the seemingly opposing forces of this legacy and of innovation. While some prefer to do it on their own, by setting up independent structures and looking for performance indicators, others stay aligned with their family and parents’ goals but inject modern practices.
In pursuit of impact, millennials adopt a specific approach to their investments. They don’t hesitate to break away from previous generations, using Impact Investing, impact evaluation or hybrid solutions. Millennials blur the lines between their investment initiatives and philanthropic activities, contrary to their elders.
"When I joined the foundation, 40% of the portfolio was in Impact Investment. But I began to question why all our investments weren't Impact Investments," said Stéphanie Cordes, 27 years old, vice-chair of Cordes Foundation in the USA.
Being a result-driven cohort, young philanthropists use digital technologies to capture and monitor key performance indicators that measure impact. Some examples of these technologies are highlighted in the report, including the European Foundation Center Data Map providing key data on how to run a foundation in 80 different countries, or the IRIS Metrics, designed to measure the social, environmental and financial performance of an investment.
“We’ve changed our organisational structure to ensure a more professional management of the foundation, and we measure our performance. We attach great importance to providing clear and transparent information about our strategic goals and performance to our most important stakeholders and the public at large,” said Lavinia Jacobs, 36 years old, chair of the board of trustees for the Jacobs Foundation in Switzerland.
Image: Stéphanie Cordes of the Cordes Foundation, and Lavinia Jacobs of Jacobs Foundation