Next-Gen Donors

July 19, 2013

There are 122 million Americans under the age of 50. They have, or will inherit $40 trillion.

When it comes to giving some of this money away, what do they care about?

Through the recently released #Next Gen Donors report it becomes clear that some of their interests and criteria for philanthropic engagement present a serious challenge to the arts and culture sector.

The report surveyed and interviewed donors under 40 at the higher-net-worth end of the continuum. A majority of the families in the cohort researched contribute over $250,000 to nonprofit organizations annually. So, these findings don’t necessarily reflect the tendencies and perspectives of younger donors who occasionally give a few bucks to a Kickstarter project here and to their friends’ nonprofit there.

While both younger donors and their parents place the highest priority on supporting Education and Basic Needs, their interest areas diverge from there.

For parents the next highest priorities are: Religion, Arts & Culture, and Youth/Family.

For their next-gen donors the greatest concerns are: the Environment, Animal Welfare and Civil Rights.

While 60% of the parents surveyed support the arts that number drops precipitously–to 40%– for their children.

One question that arises is, of course, why is this so?

Do younger people not care about the arts? Do they not value the nonprofits that exist to support artists, to provide arts experiences and deliver arts education programs?

A lot of ink has been spilled trying to figure these out.  And the answers are complex (of course they like art but ‘they’ are not monolithic and what ‘they’ consider ‘art’ frequently falls out of the 501c3 structure), manifold (technology has totally changed what it means to create, share and engage in the arts) and tied up in systematic dysfunction that can’t help but range into debates about school reform, crumbling public funding for the arts, etc.

So, no easy answers there.

However, the report also emphasizes these Top 5 Most Important Components of Philanthropic Strategy for next-gen donors:

  1. Conducting due diligence & research before deciding who to support

  2. Decide philanthropic goals & solutions and THEN search for recipients

  3. Fund efforts that address root causes and attempt systemic solutions

  4. Prefer to have info about org’s proven effectiveness or measurable impact before deciding who to support

  5. Often recommend cause or organization to others

And in this discovery arises another question that can lead to clarity and action-taking on the part of nonprofits (arts-focused or otherwise):

What are nonprofit organizations doing to position themselves to be compelling to young donors?

Because what points #1, #2, #3 and especially #4 say is: young donors do their homework and they care about impact.

They care about being able to prove that the people, organizations and causes they are asked to get behind have impact. In short, they care about evidence…and they really like data.

Like data-oriented funders (Gates, for example), venture philanthropists and impact investors, the next-gen donors are looking to solve problems and place a lot of faith in empirical demonstrations of success.

On the face of it this too puts the arts sector at a disadvantage.

For starters, the arts are not a problem to be solved!

It’s not as if Vienna in the 18th century was afflicted by a lack of sublime music until a patron invested in a precocious and prodigious young talent from Salzburg.

Secondly, so much of what makes art art is unmeasurable.

One can total up ticket sales to mostly Mozart concerts in a given season but what number would you put on the peace one person finds when they close their eyes and listen to the Requiem in a concert hall, on their headphones, on a blanket under the stars or the joy another person takes in whistling a melody from The Magic Flute in the shower, much less the total amount of serenity and happiness elicited by these works in the 200 years since they were created?

Right. It’s impossible!

But, simply saying: “we make art, don’t measure us!” is a cop out. And, according to the Next Gen Donor report, will not help make the case to all those young donors and their $40 trillion.

Pioneering efforts to count new beans and assess intrinsic impact represent one approach.

Rigorous, field-wide data standard setting efforts like the Cultural Data Project represent another.

But whichever route one goes, this report makes clear that the bar has been set for all nonprofit organizations, including those in the arts sector, to make the case that they make a difference in the discourse of data–and that bar isn’t going to be lowered anytime soon.