What Australia's rising millennial population means for the future of philanthropy
8 July 2022 at 3:29 pm
The latest census data reveals that Australia’s millennial population now sits on par with baby boomers. Brayden Howie, CEO of Action on Poverty, says this echoes a growing generational shift underway within the philanthropy sector that marks the beginning of a new era of giving.
The future of Australian philanthropy is here. The latest census data reveals that the millennial generation (born 1981 to 1995) is now on a par with the baby boomer generation (born 1946 to 1965). Over the past 10 years, millennials have grown from 20.4 per cent of the population in 2011 to 21.5 per cent in 2021. The baby boomer population has declined from 25.4 per cent to 21.5 per cent over the same period.
Currently, baby boomers hold more than half the wealth of Australia – total Australian household wealth is estimated to be $10.4 trillion. However, the Productivity Commission expects over $3 trillion of generational wealth to transfer to this millennial population over the next two decades, rising to about $224 billion of wealth transfer each year. Globally, this generational wealth transfer is expected to exceed US$100 trillion by 2050.
With the decline in the baby boomer population over the last 10 years to the point of parity with the millennial generation, this generational transfer of wealth is now well underway. And it will have a dramatic impact on the charitable sector.
Although it’s hard to estimate the figure, it’s fair to assume a good portion of this wealth transfer will be designated for furthering social objectives. Not only are millennials receiving this wealth, but they will be the key decision makers in how it is used while they also generate substantially more wealth of their own. This is a generation that cares deeply about social issues but seeks to take tangible action. Many will use the money they earn and the money they inherit to influence change on issues they care about most.
Millennials are about to become the greatest philanthropists of all time. But they will give differently, and here is why.
1. Millennials care deeply about global issues, equality, and sustainability
Millennials are driven by their values. Values they have learned in large part from older generations, and from observing their actions and results. This is a generation that seeks to make a meaningful impact as a central part of their work and lives. Giving will be combined with lifestyle choices and tangible action they can personally engage in.
While millennials still care about the same things as the generation before – good health, quality education, equity and fairness – they are also now supporting more environmental causes and even political causes albeit in new ways. We all recognise that progress on social issues has been made, but it feels slow – too slow – for a millennial. In the millennial way of thinking we need to pick up the pace, we need to shake up the system, and we need to try something different.
2. Millennials will lead an impact revolution
Millennials have grown up surrounded by the causes of baby boomers and Gen X’s – the 40hr famine, child sponsorship, and so on – all for global needs that persist. These fundraising mechanisms were used to great effect to connect a previous generation more closely to a cause. But these fundraising “products” no longer have the same vitality in this next generation as they seek to connect more directly and personally using technology, and collaborative shared-value partnerships that extend well beyond the traditional sphere of “charity”.
This is not a generation that will simply sign the cheque (if they’ve ever seen such a thing) and hand it to a large established charity. They will demand evidence of impact and they will direct funds in new ways to influence change. They will be influenced by advances in science and technology and draw on these fields to inspire new initiatives with a social purpose. They will not be constrained by traditional definitions or compartmentalisation of giving and social action.
3. Millennials will take a seat at the table
And not restricted to the board table. They will take a seat at the design table, the evaluation table and the management table. That’s because millennial giving is not just charity – it is social enterprise, it is impact investing, it is crowdfunding, and it is taking over a business they deem to be hostile to social purposes and reorienting it to align with their values. Millennials will seek to co-design impact. This is a highly engaged, collaborative, partnership-seeking generation. They will come with ideas and potential partners – sometimes left field – and the worst thing we could say to them when they do is “cool, we’ll look into it”. As the so-called “experts” in social change, it is up to us to invite, encourage, and facilitate a few more seats at the table. This will be a far more open and dynamic landscape.
Charities be warned, the future of transformational giving is here. It requires a total rethink in how to attract and engage major donors. It requires a much more open dynamic, access to design, learning and management processes and openness to making some significant changes. If charities don’t provide avenues for millennials to engage meaningfully in these ways, they will find their own ways and new methods irrespective of our wishes (and our expensive fundraising campaigns).
These trends are emerging, growing, and here to stay. The way millennials will learn to influence change as they receive this generational wealth transfer will inform their giving behaviour for the rest of their lives – what we teach (or fail to teach) them today by engaging with them on our aligned purposes, will determine how philanthropy occurs in the future still to come.