With trillions of dollars of wealth predicted to change hands in the coming years, the Alliance Breakfast Club on 3 December 2013, held in association with Geneva Global and hosted by the Legatum Institute, invited CAF’s Amy Clarke and young donors James Hurrell and Fran Perrin to discuss whether the next generation really are doing philanthropy differently from their predecessors and, if so, how.
The focus of this month’s Breakfast Club was Amy Clarke’s article in the December issue of Alliance where, along with co-authors Ben Eyre, Michael Moody and Sharna Goldseker, she discusses the results of two recent studies on the thoughts and practices of the world’s future major donors: CAF’s The Future Stars of Philanthropy and NextGenDonors : Respecting legacy, revolutionizing philanthropy, produced jointly by the US’s Johnson Center for Philanthropy at Grand Valley State University and 21/64.
Many aspects of the reports were comfortingly similar, with both highlighting an increased focus among next gen donors on the importance of impact as well as a greater interest in having blended portfolios spanning both philanthropic and investing interests.
They found that having an emotional and intellectual connection with their philanthropy was key to the donors they interviewed, who expressed an appetite for being more involved with the projects they fund.
Contrary to prediction, while social media was shown to provide information about specific issues of interest, family was still held to be the biggest influence on young donors, informing their ethics, values and approaches.
Fran Perrin, founder and director of the Indigo Trust, one of the Sainsbury Family Charitable Trusts, responded first, arguing that in her mind the idea of an increased focus on impact is something of a false dichotomy. ‘I’ve never met a donor who wanted to fund a project without making a difference,’ she said. Because young donors want to become better philanthropists they talk more about impact and particularly about measuring impact – something that can be extremely difficult in practice. This gives the impression that their focus on impact is greater, and is also likely to lead to better practices developing.
She stressed the importance of transparency: although measuring impact is difficult, being open about your philanthropy isn’t. ‘Imagine a world where we could all see where the money is going,’ she said. ‘With the International Aid Transparency Initiative every government has to publish data in the same format. Why can’t we do this with foundations in the UK?’ If all donors published details of what they fund and how much they give, she argued, it would provide invaluable information to funders and fundraisers alike leading to better practice and more efficient use of funds. In addition it would help the public to see the positive impact of the money foundations spend.
According to James Hurrell, Nexus Europe Director for Nexus Network (a community of young wealth holders and social entrepreneurs) next gen donors want to put in more than just money. It’s much more personal, and they want to see impact in their lifetime. ‘We’re not concerned with legacies or buying our way into heaven,’ he said. He also admitted that next gen donors do tend to have a short attention span.
In varying degrees all three panellists agreed with the suggestion from the audience that a focus upon impact and measurement is a general trend in philanthropy and recent years have seen increased interest across the board, not just from young donors.
Carolyn Hayman of Peace Direct commented that there seems to be a big gulf between next gen donors and others – with their own networks, are they living in a bit of a bubble? Yet, as became clear later in the discussion, increased connections between next gens and older, more experienced donors with more money would bring clear benefits all round. She asked whether there is a difference in the approaches of young donors who are the creators of their wealth and those who have inherited it.
Perrin felt that inheritors have the benefit of a pre-existing network of peers, family members who are also philanthropists. For the self-made wealthy with a business perspective, philanthropy can be frustrating as they come up against problems such as the lack of measurement tools that are more familiar to inheritors.
For Hurrell this frustration can be a significant challenge: some donors walk away when initial projects fail to deliver in the way they envisage. Although factors such as family and peers play a key role, early experiences, both positive and negative, are also crucial influences on young donors, he said.
Clarke added that creators can learn from inheritors. From an adviser’s perspective it is important to understand the background of a donor and what drives them as you support them in their development as a philanthropist. ‘We tend to be part-adviser part-councillor because it becomes very personal what you do with them,’ she added.
Perrin emphasized that the role of the adviser should be to train her how to be a philanthropist not simply to tell her which causes to fund.
Several questions from the audience highlighted a tension between a short attention span and an emphasis on a quick return, on the one hand, and projects that necessarily need time to develop on the other. Perrin commented that this isn’t a question of a patience but rather of projects not working, which no amount of time is going to fix. ‘It’s not that I get bored,’ she said, ‘I’m just no longer interested in investing in the same way.’
Hurrell noted how strongly next gen donors feel about not wanting to repeat past mistakes and continue funding the same projects without seeing a change. If they have a short attention span, it is because they are no longer learning from or being challenged by a project, whereas the attention span is longer if they are still getting something out of it. ‘We don’t to be reduced to a cheque book,’ he said. Next gens’ involvement in philanthropy is a very personal matter.
Both Perrin and Hurrell were also keen to emphasize that as next gen donors they don’t want to be sold or pitched to and resent the idea of being approached by ‘professional’ fundraisers, preferring to hear directly from those doing the work on the ground.
Both donors also see philanthropy existing hand-in-hand with ethical business practice. ‘Ethical investment is key,’ said Perrin. ‘I’m not going to invest in something immoral and then go on to fund a project to compensate.’
Hurrell sees an opportunity for next gen donors to ‘reinvent capitalism’ in this way. His hope is that in the future the boundaries between philanthropy and business will become blurred, ‘good’ business and ethical investment replacing both.
This Alliance Breakfast Club was lived streamed on 3 December 2013
Geneva Global provides custom services to individuals, foundations, non-profit organizations, and corporations worldwide, helping them to reach their goals and achieve greater social impact. Discover more at http://www.genevaglobal.com
Nexus Network is a community of young wealth holders and social entrepreneurs coming together to drive positive change. Discover more at http://www.nexusyouthsummit.org
The Indigo Trust is a UK based grant making foundation that funds technology-driven projects to bring about social change. Discover more at http://www.indigotrust.org.uk