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July 10, 2013

Family Office Review: How Next Gen Philanthropists Are Challenging the Status Quo


Family Office Review

How Next Gen Philanthropists Are Challenging the Status Quo


July 10, 2013

By Shahnaz Mahmud

“With great power comes great responsibility.” These words were ominously uttered by Peter Parker’s, aka Spiderman’s, beloved Uncle Ben in their last conversation before the elder Parker was shot to death by a thief, at least in the movie version. The phrase resonates well with next generation philanthropists. Not because they belong to Stan Lee’s mainstream comic book-tv-film characters, arguably very hipster-friendly in the 2012 reboot, The Amazing Spiderman, mind you. But, because legacy and a desire to fix the world’s problems in a roll-up-your-sleeves manner – and the means to do it – are well understood by many.

In year’s past, philanthropy was very transactional in nature. You wrote a check, the money went to somewhere (you hoped) for the benefit of those in need and maybe you got your name on the side of a building.

From Transactional to Relational

But, there’s a dynamic shift taking place now – moving from transactional to relational – that sees philanthropy as being a part of the DNA of the younger generations.

“People want to see their impact,” says New York-based Nora Campbell Wood, who is an active member of her family foundation, The Campbell Foundation, and a next genner. “They want to see that what they are doing is really making a sustainable change.”

It’s something that is very close to her and her sister, Sarah. Both traveled to Africa for the first time in 2006 with their father, William Campbell, and stepmother, Christine, visiting Kenya, Tanzania and Niger. They made a (bit of a shocking) revelation; that small scale investments – as little as $37 – could fund cataract surgery for an adult. While The Gates Foundation and the like focus on the larger scale diseases, like malaria and HIV AIDS, the lesser known or neglected diseases, which Campbell Wood points out is no more or less devastating than the others, could eventually be eradicated by small, impactful investments.

What resulted from that trip was the family foundation linking with The End Fund, dedicated to ending neglected diseases. William Campbell now serves as the chairman of the international board and Christine Wachter-Campbell also sits on the board. Both daughters are active in the fund through the foundation. For Campbell Wood, that trip was a turning point for her in her philanthropic endeavors. From that, the desire to make sustainable impact hit her.

A participant of this more-hands-on shift, Campbell Wood, believes that in the past 10 years that philanthropy has really become something that young people think about. “I think that a lot of young people are really thinking about it in an innovative, socially conscious ways, and I think it’s really exciting.”

The younger Campbell, Sarah, also New York-based, agrees that the trip to Africa was a turning point, but from a funding perspective, as back in 2004 she had already worked in India through Cross Cultural Solutions, a nonprofit working to address critical global issues by providing meaningful volunteer service to communities abroad. Campbell subsequently worked for another non profit for a year, the Interfaith Center of New York, an organization that seeks to make New York City and the world safe for religious differences by increasing respect and mutual understanding among people of different faith, ethnic, and cultural traditions and by fostering cooperation among religious communities and civic to focused on religion. While she now heads up her own start up company, Culintro, a connector of restaurant professionals, she remains committed to philanthropy. Most of the events tied to her business have some sort of charity tie-in to them.

Of the Africa experience, she emphasizes that part of the trip was intended to find the right group to give money to. “And it was really tricky because with Africa, you want to make sure your money is going to the right place and where you want it to be,” she says. When the family was approached by The End Fund, it was a welcomed meeting because of the effort on the organization’s part to study every part of that country, Campbell also says. “Which was really good to see because they had experts in every field, from the lab, to the teachers to the people that worked for the organization, to raising money. It made you feel really good about where your money was going from start to finish.”

Both Campbell next genners exemplify the heart of this dynamic shift: to have quite a discerning eye into the moving parts of a funded (or potential) organization. But, it’s also become a part of their bigger picture.

One Piece of the Overall Financial Life

“When I talk with younger generations, members of our client base, they tend to see philanthropy as just one piece of their overall personal financial life – and they see it as having that all through their lives,” says Fairfield, Conn.-based King McGlaughon, CEO of Foundation Source, a provider of support and advisory services to private foundations. “It’s not the end result of a life of hard work and wealth building. It’s part of their ongoing life; it’s part of who they are. And you’ll hear members of the younger generations say: this is who I am, I am engaged in my community.” From his observations, to be fulfilled, many next genners want to have a life that is making a difference. “And I think to a certain degree growing up with wealth allows them to have that perspective – but they do,” adds McGlaughon.

Tampa, Fla,-based John Mathews, head of private wealth management, at UBS, responsible for its UHNW business in the Americas, agrees with Nora Campbell Wood’s earlier point. What he sees is a step change from social responsibility. Previously, the charitably-inclined would seek out socially responsible investments. Now, it’s about making sure they get involved in the project and process, all done in the spirit of true passion.

What is striking is that they expect a philanthropic return, much like a monetary investment, says Bill Sutton, head of philanthropic services, US at UBS in New York.

Adds Sharna Goldseker, managing director of 21/64: “I think the previous generations may also say things that we care about are in alignment with our values, but this generation is saying that – and are we making a difference. They want to know that before they make a decision on what to fund.” 21/64 is a a non-profit consulting practice focused on next generation and multigenerational engagement in philanthropy and family enterprise.

What’s Driving Them?

But, what is driving the younger generations to be more philanthropic? That remains an open question. Interestingly, 21/64 conducted research into the donor practices of the younger generations.

Goldseker explains that 21/64 takes into account the backdrop of people’s lives in America. For example, what is the generational personality of each. The Traditionalists that were born between 1925 and 1945 lived through the Depression and they had parents who fought in World War I and the onset of World War II. “They were saving for a rainy day, were very patriotic, loyal and giving to their local community, their church parish, their synagogue, their fellow man and built some of the lasting philanthropic pillars of our century,” she says.

Then there are the baby boomers born between 1946 and 1964, who lived through that World War II economic boom, the invention of the television, which brought the world into their homes, civil and women’s rights, and anti war movements, the landing on the moon. “There was a lot of optimism and the possibility for affecting change,” notes Goldseker. “Advocacy brought a sense of philanthropic leadership and many baby boomers now share non profits around their country and steward their own family foundation. So if we start to think about what is the back drop for the Gen Xers and the Gen Yers, Gen Xers lived through Watergate and Iran Contra, the free love of Woodstock, the AIDs epidemic, the war on crack and the divorce rate tripled during their upbringing. I’m an Xer, and I feel like we come by cynicism honestly. And yet Gen Xers, if you think about the significant social entrepreneurism of today – think about Teach for America, Donors Choose, Dress for Success; that was all initiated by Gen Xers. By, that, there is a significant problem to solve in the world and ‘I am going to rely on my resources and my networks and my own time, talent and treasure to fix that’ to address that need,” Goldseker.

It’s the sense that while next genners perceive their parents and grandparents to be more vested in relationships or organizations, and that partly drives their giving, they are more focused on issues. It’s about how can you solve an issue as opposed to serve on the committees of particular organizations.

Similarly wired, says Goldseker, Gen Yers or millennials who are born between 1980 and 2000, grew up with much more turmoil on their own soil than the Xers. from Oklahoma City to Columbine, to the Trade Towers coming down in 9/11, hurricanes Katrina and Rita. “They personally experienced so much in their formative years that I can only surmise that this uptake in civic participation and volunteerism and voting rates has contributed to the mindset of this generational cohort,” she says.

It’s clear that they take a very hands on approach and don’t just want to sit on a board – they want to serve, she says. “The younger generations are interested in ‘how can I use my skills to help you, be partners with you’ and really achieve an end,” Goldseker also says.

Washington DC-based Dori Krieger, Foundation Source’s director of community programs and partnerships, sees boundaries blurring among the next genners. “In past years, I think professional was professional, family was family, volunteer and philanthropy was volunteer and philanthropy. Those worlds were separate. and I’m noticing that those boundaries are definitely becoming blurred with the next generation. It’s kind of this whole integration of self doing good.” She sees this segment really looking at how they can tap into their passion.

Technology is at the Heart

Technology is at the heart of this shift. As Foundation Source’s McGlaughon says: it has allowed them to see the world as a much closer place that they can touch, feel and interact with, engage, at a very different level all the way through their life then their parents and grandparents did.

UBS’ Sutton adds that technology leverages media – and social media – with such immediacy it’s accelerating philanthropy. You’ve got connectivity on the internet through your computer, lap top, hand held device, there exists the possibility to take ideas anywhere in the world.

What that has facilitated is an ability to advocate for change and to make contributions to organize their peers, to support their causes at a younger age than possibly generations of donors before them, adds 21/64’s Goldseker.

The need to establish a peer network is one by-product of this shift. “If you are a young person and want to be philanthropic, that can be isolating,” says Foundation Source’s Krieger. In developing a network, individuals can learn from each other, whether it’s about the craft of philanthropy or specific areas. “I think establishing a peer network can lead to that candid conversation and safe space, which is critically important,” she adds.

Peer networking is an area that UBS focuses on through its Young Successor Program, an educational wealth management program of which philanthropy is a key component. Over four days, the children of clients, typically the 20s and the 30s crowd, convene and listen to speakers, like the social entrepreneurs of the world; Lauren Bush Lauren, the co-founder of FEED and Scott Harrison, founder of Charity Water are two examples. But, they also create their own networks during the event, of which both men have witnessed many good joint ventures and projects resulting from it.

“I would say that technology has enabled us to form those communities much faster and broader than we could in the past,” says Mathews. “We formed a community [last week during the Young Successors Program] that will go on for years to come. They will be able to stay in touch with each other and communicate, like through Facebook, texting and social media…technology accelerates everything.”

Optimistic for the Future

Curiously, the younger generations tend to suffer a great deal of flak, having been fed on a diet of technology, particularly social media. They’ve been accused of having shorter attention spans and not being well-read enough, spending too much time tweeting and texting and posting on Facebook. Yet, within a philanthropy context, it’s quite a different story.

Moreover, the stigma of entitlement can be erased. “I was so pleasantly surprised [through the research] to find society and social cultures suggest that Gen X may be cynical and Gen Y may be entitled that I’ve met dozens of next gen donors who are hungry for the opportunity to do family philanthropy and to have an impact in the world,” says 21/64’s Goldseker.

And we must be reminded that elder family member influence is still very present. “Respecting the legacy of their parents is very important to them,” says UBS’ Sutton. “Where they came from is carefully considered – and if it’s not their wealth that is generated, how do they want to make a difference right now – that’s what I am seeing.”

“I’m very optimistic about the future,” adds Mathew. “The more of these types of kids – the children, the young adults – that I meet, the more optimistic I become about us as a society and the future. It makes you feel good that people really care.”

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