According to the Center on Wealth and Philanthropy at Boston College, we are currently experiencing the largest wealth transfer in US history. $59 trillion (yes, trillion!) will transfer to the next generation from 2007 to 2061.
Charitable giving during that same period is estimated to be $20.6 trillion. With longer lifespans and a greater understanding of how sustained giving over time can positively contribute to the social good, many families want to approach their giving strategically with more multi-generational collaboration. Thus, increasingly traditions of giving, and not just money, are passed from one generation to the next.
To ignore this trend risks missing your organization’s full fundraising potential and the opportunity to have sustained, decades-long funding from the same families. I often hear complaints from my clients that “Mr. and Mrs. Smith gave generously and regularly to our organization, but now they have passed. Their children won’t engage us so that donor family is lost. Oh well; there is nothing we could have done about that.” While certainly the second and third generations of families don’t always share the philanthropic priorities of the first generation of givers, this result isn’t inevitable.
How then can nonprofits encourage such multi-generational giving? Here are a few strategies:
1) Encourage your best supporters to talk with their children and grandchildren about their philanthropic interests and why they give to the organizations they support, including yours. Giving is a learned behavior. For example, I work with a family that has semi-annual “giving meetings,” usually in the spring and fall, where they discuss their giving for the next 6-12 months. Each family member over the age of 16 has a voice in setting their giving priorities for that year, and the family members between the ages of 16-25 are each given $10,000 annually to designate to the charities of their choice. Families that talk about their giving openly and regularly and discuss how and why they give tend to instill in their families a spirit of generosity that lasts long after the first generation has passed.
2) Help these supporters recognize the power of multi-generational giving to effect decades-long positive impact and change. What legacy of giving does their family want to build for the next fifty plus years through your organization and how could their multi-generational giving help transform your organization over the same period? Higher education has done this well through engaging multi-generational alumni from the same family, but there is no reason why nonprofits can’t embrace the same model.
3) Point out to your supporters the joy of cross-generational collaboration in giving. When families give intentionally across generations, they tend to deepen family relationships. Organizations and causes become “our” organization and cause as a family. Moreover, giving by the second and third generation to an organization that their parents or grandparents support doesn’t just become a gift out of respect or honor to them but a meaningful sustained engagement with your organization toward a cause they themselves believe in.
4) Engage the children and grandchildren of your best supporters in your organization’s work through multi-generational volunteer opportunities, tours, donor recognition events, etc. Organizations who ignore the next generations of their best supporters shouldn’t be surprised when those generations ignore them after their parents/grandparents are gone. There has been no direct relationship established between the organization and those generations of the family. It only existed with the first generation and once they are gone, so is the relationship.
5) Finally, don’t ignore the potential to encourage multi-generational giving in the reverse direction—i.e., from the second/third generation to the first. Increasingly, for example, grandparents are playing a significant role in giving to the schools that their grandchildren attend. A recent K12 campaign I counseled intentionally engaged the grandparents of their current students for the first time (e.g., campus tour events, bi-annual grandparents’ day, meetings with the Head of School, etc.). By the time the campaign finished, grandparent giving amounted to a third of the overall giving to the campaign and represented 80% of the new donor acquisition.
Encourage more multi-generational giving. Increased generosity and longer giving cycles will result for your organization as you strategically focus on donor acquisition and retention across generations of the same family.