By Ann Canela
Global Impact has put a lot of energy into answering several important questions: How can we democratize philanthropy and put the same tools that major philanthropists have into the hands of every person? And how do we develop more strategic donors specifically in the U.S.?
As the strategist tasked with bringing a solution to market, I began answering these questions by trying to understand both the primary audiences for such a solution and the values they hold. The charitable sector as a whole has gone from a primary donor base of Baby Boomers directly to young Millennials, skipping Gen Xers and older Millennials entirely. Why did the nonprofit world overlook this population?
Research surveys tell us Gen Xers and Millennials are going to increase their contributions and that women will continue to play a dominant role in giving. In fact, according to The Women’s Philanthropy Institute, women give more than men, in almost every income bracket. Moreover, the greatest wealth transfer in U.S. history has begun as Boomers are passing on their wealth to their children, primarily to Gen Xers. According to a study from Accenture, more than $30 trillion dollars will find its way to these younger generations. Additionally, history shows that as people reach their 30s and 40s, they begin to establish their giving goals and think about their legacy, as was the case with Boomers.
These findings set me on a journey to learn more about Gen Xers and older Millennials, especially women. Over several months, I conducted a series of 1:1 in-depth interviews with 20 Gen Xers, mostly women between the ages of 33-48, to find out more about their charitable giving behaviors and potential to give. What resulted made me realize we have failed as a charitable sector to properly understand, educate, and cultivate this special and powerful group of donors.
My interviews quickly revealed the Gen Xer is a busy, time-constrained individual who, unlike their younger Millennial counterparts, does not have much time to volunteer. Most were one of two working adults in the home with children in school. These donors are mostly giving simply because they are asked by someone they know. They are not planning their giving or budgeting for it. In fact, one rather harried single working mom with two kids in college told me, “We have been taught to save for college from the time our kids were little, but we were never taught to save for philanthropy.” I also heard, “I wish I could do more, but I don’t know how.” and “There is so much pulling at me, I want to make a difference, but I need it to be efficient and easy.”
Efficiency, Ease & Meaningful Giving in Donor-Advised Funding
- Giving must be as easy as possible;
- It should create a sense of community;
- And it should provide a mechanism to educate and engage families in giving.
This discovery and research process led Global Impact to develop Growfund, an online donor-advised fund (DAF), a philanthropic giving tool that allows donors to make irrevocable, tax-deductible contributions to a charitable sponsor. Donors then have an indefinite period to recommend grants from those funds to charitable organizations. Growfund also has no minimum capital requirement, a feature which can help democratize philanthropy for these everyday, Gen X donors.
Such a charitable giving tool operates like a 401(k) or a personal foundation, with funds able to be saved or invested and grown over time so that donors can aggregate their donations and then make larger more impactful donations at a later date. Before making donations, donors can search current information on more than 800,000 charities, which greatly expands and informs donation opportunities, and all contributions are tax deductible in the year the donation was made.
With Growfund and donor-advised funding, information and tools once only available to seasoned or wealthy philanthropists, are now accessible to everyday donors. It makes giving easy, creates a sense of community by allowing others to participate in your fund, and helps educate and involve families in the giving process. Through tools like Growfund, the nonprofit sector gives everyday donors the same tools that major philanthropists have at their disposal and can develop relationships with more strategic donors from a population that has historically been left out of the funding process.
Ann Canela is Vice President at Global Impact. She is also a senior advisor for the Global Health Council, the Hilton Prize Coalition and Restore the Earth Foundation. She is also on the board of advisors for World Vision‘s “Strong Women, Strong World” initiative, and is on the board of advisors for the Open Road Society’s “the Commons,” focused on risk reduction in philanthropy. She has a Bachelor of Arts from Hunter College in New York City and a Certificate in Professional Fundraising from Boston University.