Understanding Generational Perspectives on Philanthropy and Wealth Transfer.

As a self-made billionaire philanthropist once told to me after a few drinks, "I have the money, and my kids keep reassuring me, saying, 'Don’t worry, we’ve got this, we’ll take care of everything.' But they don’t share my entrepreneurial drive. I’m counting on my grandkids to have it."

As the world changes, so do the ways families approach philanthropy and the transfer of wealth across generations. Each generation carries its own set of values, shaped by the cultural, economic, and social influences of their time. Let’s explore the expectations of the first, second, and third generations when it comes to philanthropy and how they view the stewardship and distribution of their family’s wealth.

The First Generation: Traditional Values and Conservative Giving

The first generation, often the wealth creators, typically hold a conservative view on philanthropy. They are likely to see charitable giving as a duty or moral obligation, focusing on established institutions like religious organizations, educational institutions, and healthcare. This generation is driven by a desire to leave a legacy, ensuring that their wealth supports causes they deeply care about long after they are gone. Trust in traditional methods of giving—such as foundations or endowments—is paramount, reflecting their belief in stability and long-term impact.

The Second Generation: Strategic Philanthropy and Pragmatic Stewardship

For the second generation, the approach to philanthropy becomes more strategic. Having grown up witnessing the wealth accumulation and its impact, they often balance the values instilled by the first generation with their own experiences in a rapidly changing world. This group tends to adopt a business-like approach to giving, seeking measurable outcomes and focusing on efficiency and sustainability. While they respect the foundations laid by the first generation, they are more likely to innovate within those frameworks, possibly expanding into new areas such as environmental sustainability or social justice.

The Third Generation: Social Impact, Innovation, and Activism

The third generation, coming of age in a digital and globalized world, views philanthropy through a lens of social impact and innovation. This generation is not just interested in donating money but is passionate about addressing root causes and driving systemic change. They may challenge the traditional structures and methods of the previous generations, preferring to engage in impact investing, social enterprises, and grassroots activism. Digital platforms and global networks enable them to connect directly with causes, emphasizing transparency and immediate results.

Bridging Generational Differences

The differing expectations and approaches of these generations can lead to tensions but also offer opportunities for growth and collaboration. Open communication about values, goals, and methods can help bridge the gap, ensuring that the family’s wealth continues to make a meaningful impact across generations. As these generations work together, they can create a dynamic and resilient approach to philanthropy, combining the strengths of tradition, strategy, and innovation.

In conclusion, understanding and respecting the distinct perspectives of each generation can lead to a more holistic and effective approach to philanthropy. By embracing the diversity of thought and experience within a family, it’s possible to create a legacy that not only honors the past but also adapts to the future.

As an non-profit professional, your role is pivotal in facilitating the gift by connecting donor to mission, based not only on generational wealthy, but also age generation. Your UHNW strategy needs to consider these key elements for success, as we enter the largest global transfer of generational wealth. At Vida Align we have successfully connected UHNW families with non-profits to secure multi-million dollar donations, from first, second and third generations, through our UHNW strategy and council model.