Charitable Planning for Millennials (compared to Baby Boomers): An Opportunity to Differentiate Your Practice
According to the 2024 National Study on Donor-Advised Funds, together, Baby Boomers and Generation X make up 70% of all donor-advised fund account holders (~50% and ~20% respectively). And yet, accordingly to a Fidelity Charitable study, only 35% of Baby Boomers and 48% of Generation X-ers consider themselves to be a philanthropist.
As those older generations pass away and leave much of their wealth to younger generations, like Millennials, it’s quite interesting to compare these two segments. When Millennials were asked the same question, 74% of them said they consider themselves to be a philanthropist. Three-quarters of that population compared to one-third of Baby Boomers! And yet, today, Millennials only make up 10% of donor-advised fund account holders.
Further, according to a Northwestern Mutual study, 59% of all respondents said charitable giving is an important component of their financial plan. Looking just at the Millennial respondents, 91% said charitable giving is an important component of their financial plan. 91%!!
The top reasons Millennials cited for why they give to charity:
“I can make a difference with my donations.”
“I have a responsibility to give.”
“It helps me live a life that reflects my values.”
The top reasons Baby Boomers give to charity:
“The nonprofits I give to are trying to solve important problems.”
“I have a responsibility to give.”
“I am personally connected to the cause or I know people personally impacted by the cause.”
Research has consistently shown that Millennials tend to be very values and social-impact driven in all aspects of their life. They want to do something meaningful; they want to find purpose; they have a strong social consciousness. You can see why charitable giving ranks so high for this generation. With $80 trillion+ being passed down to younger generations today and over the next few decades, how will you support your Millennial clients’ charitable intentions?
Further, according to Cerulli research, only 13% of adult children report choosing to work with their parent’s financial advisor. 88% indicate they would never even consider it. If most of your clients are older, what are you doing to cultivate relationships with their adult children? Think about how your approach may need to be different with this next generation that has different values, motivations, and needs.
