With millennials (generations Y and Z) inheriting an estimated $550 billion annually, representing 42% of the U.S. population, it is clear that they are a force to be reckoned with in the world of philanthropy. According to a recent report by Giving USA and Dunham+Company, millennials have significantly increased their charitable contributions in the past six years, with the average donation from millennial households rising by 40 percent from 2016 to 2022. This growth in giving is in stark contrast to Gen X and boomer households, which have seen declines in their annual contributions.
Unlike previous generations, millennials approach giving with distinct values and preferences, focusing on purpose, impact, and transparency. This has led to a revolution in traditional philanthropic trends and practices, with millennials reshaping how charitable contributions are made and perceived. Wealth managers are advised to integrate philanthropic advisory services into their offerings to connect with and support millennial givers, as 59% of them expect their financial advisor to provide services beyond financial advice and investment management.
Wealth managers should take the time to understand millennial values and priorities, as many millennials prioritize social impact and sustainability in their investment decisions. By offering philanthropic investment options aligned with these values, wealth managers can attract and retain millennial clients. Additionally, wealth managers can utilize technology platforms to streamline the philanthropic process, offering online platforms or mobile apps that make it easy for clients to research charitable organizations, track their giving, and receive updates on the impact of their donations.
Recognizing that millennial clients have diverse interests and causes they care about, wealth managers should provide personalized philanthropic solutions tailored to individual preferences. This may involve conducting in-depth discussions to identify clients’ passions and values, developing customized giving strategies aligning with their unique charitable goals. By focusing on customized solutions, wealth managers can better engage millennial clients and support them in their philanthropic endeavors.
There is a significant opportunity for wealth managers to educate and collaborate with millennials on their financial planning and philanthropic endeavors. With the wealth of this generation rapidly growing, successfully engaging millennials now could have long-term benefits for wealth managers. By offering philanthropic advisory services, understanding millennial values, connecting via technology, and focusing on customized solutions, wealth managers can effectively support and connect with millennial givers who are shaking up the traditional norms of philanthropy.
