Joe Mrak
Joe Mrak
CHARITABLE PLANNING
nities to diversify giving strategies within vehicles, too. For example, we often discuss with private foundation clients the latitude they have to run their own charitable activities, like a clothing drive or tutoring program, or invest in for-profit mission-aligned companies, and give directly to individuals in the form of hardship grants or scholarships.
Clients with tools such as these are able to customize their giving to not only boost their charitable impact but enjoy greater tax savings and tax-free asset growth as well.
Next-Gen Influence
With the“ great wealth transfer” well underway, it will not be long before the next generation drives trends in spending, saving, investing and, importantly, giving. We recently surveyed 1,000 Gen Z and millennial donors to understand their attitudes, perceptions and preferences for charitable giving as they continue to play a larger role in shaping their family’ s financial priorities. Among our key takeaways:
• Younger generations aspire to be seen as“ givers,”“ volunteers,”“ advocates,”“ changemakers” and“ humanitarians.” Their preferences imply that they have a generous and caring mindset and a desire for direct involvement in giving back. They are acutely focused on the plight of individuals and communities, and Gen Zers, in particular, want to be seen as catalysts for systemic change and want to see evidence of progress.
• They don’ t limit their charitable activities to financial contributions. They
Gen Zers, in particular, want to be seen as catalysts for systemic change and want to see evidence of progress.
see a range of activities as an expression of their commitment to social change, including donating items, volunteering time, helping with fundraising, and sharing expertise / knowledge.
• Their financial contributions are influenced by their respective financial resources. High earners donate greater amounts. As next-generation clients mature and hit their peak earning years, their potential to contribute more financially to the causes they care about will grow, too.
• So far, their giving has been informal and direct, but they show interest in learning more about formal charitable vehicles and other giving approaches. Giving circles and trust-based philanthropy are among the top approaches of interest, and donor-advised funds and family foundations see the most traction among formal charitable vehicles. The next gen may be interested in more tax-efficient ways of giving as their taxable income increases as well.
• Their inspiration to get involved in charitable activities is primarily driven by their family influence, as well as their passion for specific causes, and their desire to help their local communities. Millennials who engage in charitable activities started at an average age of 18; Gen Z started even younger, at age 14. This early start is likely to inform their lifelong commitment to social change.
Many high-net-worth families care deeply about building a legacy that spans generations and doing whatever they can to engage the rising generations in constructive dialogue. At the same time, the next generation thinks about wealth and giving differently than their parents and grandparents. They’ re eager to be active participants in charitable work and feel connected to the impact that nonprofits have on communities and society at large. Ultimately, newer donors are eager to find ways to optimize their contributions by forging funding partnerships, taking advantage of giving circles and highlighting the work of their nonprofit partners.
Financial advisors, therefore, play a crucial role in helping clients bridge the generational gap to crystallize their values, strengthen their family legacies and create impact well into the future. Your success depends on your ability to resonate with all generations and help them find common ground around shared priorities.
While a person’ s values can evolve over time, these values provide a useful way for you to connect with clients during market uncertainty and act as an important reminder of their true north. It’ s a pivotal time for wealth advisors who support clients’ efforts to align their assets with their personal principles and create charitable impact. Consider honing your philanthropic expertise to create stability in your practice, enrich your service offerings and deepen your client relationships.
JOE MRAK is the CEO of Foundation Source, the leading provider of enterprise-grade solutions for private foundations, donor-advised funds and planned giving programs.
22 | FINANCIAL ADVISOR MAGAZINE | APRIL 2025 WWW. FA-MAG. COM