Charities risk missing out on a share of trillions of pounds of inherited wealth from a “lost generation” of affluent millennial givers unless the sector finds targeted ways to connect with them, new research warns.
A new report by the think tank the Beacon Collaborative shows charities have preconceptions about the giving habits of the millennial generation, such as that they are interested in activism and are seeking systemic change to global issues through their charitable giving.
The report, The Giving Needs of the Future Wealthy, says it is also assumed that this generation expects to engage with charities using technology, and that they are attracted by innovative organisations.
But researchers found that wealthy millennial donors in the UK often felt disconnected from charities, and generalist fundraising approaches meant that this group was not being engaged effectively for a lifetime of giving.
The report found that wealthy millennials thought about changing the lives of individuals first, not changing the world, and are reluctant activists who do not make links between activism and charitable giving.
One respondent who took part in the research for the report said: “I think we're quite a considerate household in terms of our footprint, and recycling, and trying to minimise waste… So, I hope we take it quite seriously.
“Black Lives Matter is something that we have been involved in, but, again, not something that I would, or have donated to.”
In addition, researchers revealed that this group see technology as an enabler of, not a substitute for, a genuine relationship with a charitable organisation.
Major giving is not something they have on their radar, although some may consider it later in life when they are more financially comfortable.
The report says that unless the charity sector considers targeted ways to connect, it will miss the opportunity to grow the major donors of the future.
It advises that engaging millennials while they are still at a moderate wealth level will help charities develop sustainable partnerships that will become more fruitful over time.
The opportunity is huge, said researchers, with an estimated £5.5tn set to change hands from baby boomers to millennials over the next 30 years in the UK.
The findings suggest this group is likely to give about three times more to charity than its older counterparts.
Previous research by Beacon Collective highlighted how young donors had significant financial worries reflecting their current stage of life, despite their relative wealth.
Consequently, researchers said that, to avoid a “lost generation of givers”, they need greater levels of support from charities to help them understand how their money will be spent, and how it will make a difference.
The report makes 10 recommendations, which include showing how solutions address causes, not symptoms; avoiding jargon in a way that is relatable to millennials' experience; and to embed giving in their workplace, lifestyle and at major moments in their life.
Matthew Bowcock, chair and co-founder of Beacon Collaborative, said: “Wealthy millennials are a critical part of a bright future for philanthropy in the UK.
“This research shows that fundraising organisations need to do more to understand their needs and set them on the path to a lifetime of giving.”