There are two billion millennials in the world. They make up 27 per cent of the global population, but who are they, and what do they think? Highly educated, physically fit, tech-savvy and set to have long and varied careers; this generation sees life through different lenses to its predecessors, and its views are set to change the future of philanthropy across the world.
Generation socially responsible
The term “millennials”, or “generation Y”, broadly encompasses those born between 1981 and 1997. They tend to be socially responsible consumers and view challenge through an international lens. Just over one-third of baby boomers (born between 1946 and 1955) prioritises domestic issues over international ones, but this rises to a half for millennials as they consider issues at home to be just as important as those abroad.
The rising culture of the “gig economy” is partly driven by millennials who want more freedom than their parents had. They mistrust “big business” and don’t want to be tied to corporate jobs; they want flexibility and autonomy. The line between personal life and working life is blurring as millennials bring their work into their home by way of freelancing, or consultancy. They are integrating the causes they care about into their daily routines.
This mistrust of big business also drives a lack of loyalty. Job security is low and a “job for life” is almost extinct. Millennials are content to switch from role to role, depending on the brand and the values that it adheres to. Suddenly, corporations are facing criticism about the way they conduct business, as generation Y demands to work for, and with, socially and ethically aware companies.
Millennials have grown up in an interconnected world. As unique as a millennial may consider itself to be, this interconnectedness has driven a rise in homogeneity as coffee shops in Tokyo begin to look remarkably similar to those in London. Millennials are dressing in the same way, listening to the same music and invariably, having the same views.
Generation Y is sometimes referred to as “generation me”, but this title seems misplaced. In reality, millennials are pushing businesses to focus less on their own profits, and more on making a positive impact. The enormous rise in corporate philanthropy over the past five years is evidence of this shift, as businesses try to attract millennials through their own values and corporate governance.
In essence, millennials are thinking in the same way, they are driving social responsibility in every sector, and they will eventually have the spending power to make real change. Their focus is on value, experiences, sustainability and technology. Also, there are lots of them. By 2025 they will represent 75 per cent of the global workforce. Heed should be paid to their views as previous generations start to retire and millennials start to pave our futures.
Is it all talk, no action?
So how will these generational traits influence philanthropy? The oldest millennial is now 37, their spending power quickly rising. How will they choose to spend their earnings? Perhaps their generous views will fade when faced with the realities of debt and property ladders, or perhaps their values will hold strong.
However, research shows that millennials do save a lot, and are indeed then generous with their savings. They view financial generosity as a natural part of reaching a certain professional or financial position and many are engaged with philanthropy already; be it a financial commitment or a commitment of their time. Businesses that are well governed and care about being socially responsible will do better in future than their poorly governed counterparts. Millennials really do care, and so far, they are showing themselves to be true to their word.
How does generation Y give?
Millennials bring the causes they care about into their purchase behaviour. Rather than make one-off donations, they create longer giving strategies and commit their time and emotion as well as their money. Writing a cheque (or sending an online transfer), won’t satisfy the philanthropic wants of generation Y.
The incidence of micro funding, widely used in the US Presidential campaigns, is on the up. Microfunding campaigns encourage a mass audience to donate a small amount, for example, just £3 or £5. This engages a younger audience with philanthropy in general, or with a particular cause. These micro funding campaigns can raise millions and engage thousands.
Technology is an important part of millennial philanthropy. Generation Y wants to give efficiently and see immediate results. If their online donation can be matched or increased at no extra cost, engagement is even higher. Innovations in technology must keep up with a millennial’s giving requirements.
Changing investor behaviour
Millennial savers are twice as likely as older generations to want their pension to be invested responsibly. 13 per cent of 18 to 34 year-olds with a pension believe that it is their responsibility to ensure their money is invested ethically. This compares to 6% of 45 to 54 year-olds, and 7 per cent of over 55s. The popularity of environmental, social and governance (ESG) investing is growing rapidly, and this growth doesn’t look set to slow anytime soon.
Social impact investing wasn’t really around 20 years ago, but now the term generates hundreds of search engine results. It seems the perfect marriage of ideas for a millennial; giving with a sense of purpose, and also possible financial gain. A recent survey found that 79 per cent of millennials described themselves as impact investors, and the 21 per cent who did not describe themselves in that way explained that it was only because they lacked knowledge of the subject. Investing for financial and social benefits looks set to stay.
Corporations are paying attention
One of the most significant shifts in the field of philanthropy over the past few years has been the enormous rise in corporate giving. The total value of corporate donations in the UK has risen from just under £50 million in 2007 to over £500 million in 2016. That is an increase of over 900 per cent. Companies are trying to engage with millennials’ heightened social awareness as they try to attract customers and employees.
Philanthropy at Rathbones
We have a long history of philanthropy at Rathbones. Established as a timber merchant by the Rathbone family in the 1720s, subsequent generations took the family business into shipping and overseas trade in 1742, before moving into managing money at the beginning of the last century. As a Quaker family, it was deeply abolitionist and played an important role in the abolition of the slave trade. The family then went on to contribute enormous improvement to healthcare and education in Liverpool.
Rathbones is paying close attention to the views of generation Y and looks to support clients’ philanthropic activities. Our in-house team, Rathbone Greenbank Investments, operates at the forefront of ethical investment and is a prominent activist on important issues. Whether individuals and families, charities or other non-for-profit organisations, we look to reflect our clients’ values in their investment choices.
Ian Dembinski is head of Rathbone Private Office
Civil Society Media would like to thanks Rathbones for their support with this article
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