We live at a turning point in the history of Jewish philanthropy. Over the next few decades, more than $30 trillion will be passed down from the baby boomer generation to their children.
As these considerable assets change hands, so too will the power to shape the philanthropic sector. Research suggests that today’s younger generations may not share the same charitable priorities — Jewish or otherwise — that their parents did.
How, then, can Jewish philanthropic organizations balance the children’s priorities while preserving their parents’ legacies?
The baby boomer approach to philanthropic giving
According to a recent Merrill Lynch study, donations from baby boomers account for a staggering 42 percent of all charitable giving in the United States. The primary motivation attributed to these donations is “making a difference in the lives of others.”
In the recent Jewish Community Foundation of Southern Arizona fund holder survey, which was sent to all current donors, baby boomers in our community cited “feeling a sense of responsibility to engage in philanthropic work” and wanting to “impact strategic or long-term change” as their greatest motivations.
Asked the most effective way to teach generosity to the next generation, three in four retirees in the Merrill Lynch study said that they seek to be role models for giving. In our community, more than half of baby boomers cited “imparting Jewish values to my family” as a significant inspiration for charitable giving.
The top three charitable areas of emphasis selected by baby boomers in our survey were “Jewish engagement and community building,” “basic needs: food, housing, and emergency assistance,” and “tolerance and social justice.” This is similar to overarching trends described in a recent Blackbaud Institute for Philanthropic Giving study, which found that baby boomers cared most about local social service needs, religious and community life, and health and wellness.
What has yet to be seen is what will happen to the organizations and causes that the baby boomers have championed when there are new stewards of the philanthropic landscape.
The next wave: millennial giving habits
The JCF survey, which had only a small sample of millennials, found that the two primary motivations of this generation were wanting to “impact long-term or strategic change” and having a “family history of philanthropic giving.” The former motivation matched one of the top baby boomer priorities. The latter indicates that the baby boomer goal of imparting Jewish values to their children by example is beginning to come to fruition.
The Merrill Lynch study found that, compared to baby boomers, millennials donated more to animal rights, the environment, and human rights causes and less to religious or spiritual charities. Our JCF survey found that millennials’ primary philanthropic interests were “basic needs: food, housing, and emergency services,” “children and youth services,” and “refugees and immigrants in the general community.”
These stated preferences suggest that millennials may take less of an interest in Jewish-specific philanthropy and more of an interest in the general community than their parents do. Millennials seemingly are concerned with basic needs for all, recognizing that, today, in many cases, Jews are being helped alongside the needy in the broader Tucson community.
Another generational trend in philanthropy over time has been a greater tilt among boomers and even more so among millennials toward donor-directed giving (i.e., giving in which donors actively engage in the allocation process), rather than unrestricted giving.
Compared to their parents, the silent generation, baby boomers in the Merrill Lynch study report a 29 percent increase in preferring to specify how charitable donations are used, and, conversely, a 25 percent decrease in the belief that charitable organizations spend donations in the best way possible. This attitudinal trend does not show signs of slowing as millennials take the reins.
The way forward
Baby boomers and their children are not completely at odds. Significant similarities between the two include a focus on strategic philanthropy and a concern for causes related to basic needs. Both groups also seek to be actively involved in the organizations they support; the difference may simply be to what degree each group wants to participate.
The primary divergence, at this point, appears to be that baby boomers may be more committed to funding Jewish sectarian causes while millennials display their Jewish values by supporting secular institutions.
The depth of the divide is not yet clear because the Great Wealth Transfer is still underway. Baby boomers still dominate charitable giving and therefore set the priorities, both countrywide and in the Tucson Jewish community.
As this generation passes the torch, the charitable organizations that they have bolstered run the risk of falling behind if the millennial generation neglects to champion them.
Among the most powerful ways to ensure continuity of support for the causes that baby boomers hold dear is to establish endowment funds that can operate in perpetuity. In this way, the parents’ philanthropic legacies can endure while making space for their children’s legacies to continue to develop.
Graham Hoffman is the president and CEO of the Jewish Community Foundation of Southern Arizona.