Passing the torch: next generation philanthropists
The exclusive 2017 BNP Paribas Philanthropy Report written by the Economist Intelligence Unit explores how the Next Generation of Philanthropists is shaping the future of philanthropy, balancing the weight of family legacies through new tools, technologies and strategies.
The report is based on desk research, in-depth interviews of millennial philanthropists and philanthropy experts.
The five main characteristics of the millennial philanthropist mindset:
Belief in social entrepreneurship: millennials believe that supporting entrepreneurship and for-profit organisations (as opposed to a traditional non-profit) can be a more sustainable option to achieve their philanthropic ambitions. Their emerging sectors for social entrepreneurship are FinTechs, EdTechs, Renewable Energy and Food & Agriculture.
A global approach: millennials are more global both in their causes and geographies than Baby Boomers: the younger generation wants to replicate successes across many places whereas the older one is focused on a single region.
A desire for now: millennials do not want to wait before giving back as they know that they can make a change today.
A different use of social media: millennials use digital channels differently from Baby Boomers, not only to promote their causes, but also to find grantees, donors, talents and to educate themselves.
A collaborative culture: millennials believe they can be more effective if connected with peers through international or local networks, looking for co-investments, co-funding, new ideas and best 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.”
"Learning the next move of young High-Net-Worth-Individuals, their values, and their objectives, are crucial ambitions in our goal to transform the experience we offer them as our next generation of clients," added Vincent Lecomte, Co-CEO of BNP Paribas Wealth Management. "This new experience we are co-constructing with our clients and FinTechs is a unique blend of disrupting services, communities like the NextGen Club App and our NextGen Experience educational program."
How do millennial philanthropists deal with their family legacy?
Millennials do not feel that they have to be necessarily tied to their family legacy. They are striking 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.
“What makes a family so different from anything else is the support within. We review it [philanthropic decision] together and decide whether or not we want to go forward,” states Koon Ho Yan, 32 years old, founder of EasyKnit Foundation, Hong Kong.
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," comments Stéphanie Cordes, 27 years old, Vice-Chair, Cordes Foundation, 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 organizational 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,” asserts Lavinia Jacobs, 36 years old, Chair, Board of Trustees, Jacobs Foundation, Switzerland.
The 2017 BNP Paribas Philanthropy Report reflects a willingness to better understand, serve and celebrate individual philanthropists around the world. BNP Paribas Wealth Management has advised more than 800 clients in their philanthropic journey since 2008 thanks to multi-awarded teams based in Europe, Asia and the US.
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BNP Paribas Wealth Management is a leading global private bank and #1 Private Bank in the Eurozone. Present in three hubs in Europe, Asia and the US, over 6,600 professionals provide a private investor clientele with solutions for optimising and managing their assets. The bank has €344 billion worth of assets under management (as of December 2016).