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Your Questions, Answered: Giving Needs of the Future Wealthy
At our April 22nd launch event, our researchers were inundated with questions. While we responded to as many as we could, we wanted to take the time to respond to the others which came up. See below.
This research was conducted by Beacon and Savanta and funded by Arts Council England.
What were some of the best charity engagement tactics wealthy millennials had experienced?
- Positioning: Make sure you are running your campaigns in places they visit, either physically or virtually, and make it relevant to that place – be strategic about placement. They will not seek out your campaign; it has to come to them. A good example is of a participant who found out about a campaign after seeing an environmental poster at a zoo.
- Vary your ask: Wealthy millennials understand the ask for money, but make sure you mix it up. Asking for other things too, not just money, will generate better engagement.
- Work with businesses: Develop partnerships with young high earners’ businesses where possible. This enables them to support your charity through payroll giving and volunteer days, which are less onerous and could lead to more engagement.
- Engage their friends: Participants told us they were much more likely to get involved in a cause if they already knew people who were involved.
- Make it relatable: What affects them in their daily life? How can you tie this into your campaign?
- How does giving educate them? What can donors learn from the experience of giving both their time and money? How will this improve their skill set and develop their education about the issue? Demonstrating this can perpetuate giving behaviour.
- Innovation and fun: How can you take routine social events that young people like and turn them into ways to give money? There is a reason sponsored events do so well. But can you innovate on this to expand the things donors can sponsor? For example, could a young high earner be encouraged to help sponsor a PhD?
Does the research show that wealthy young people lack empathy?
In fact, the opposite was true; empathy was largely the driver of young people’s charitable giving, hence the large amount of reactive, emotionally-driven giving we heard about (and the relative lack of strategic giving). The main issue was that participants lacked the time and the right information to become more involved in giving, so they didn’t know how to take the next step. Also, there was apprehension around giving away a lot of money while still on a more modest salary.
What were young people’s opinions on giving via technology?
Our participants liked the idea of using technological solutions to connect with organisations to see what organisations needed and how they could help. Examples given demonstrated where technology could play a vital role in highlighting charities’ urgent needs, such as a charity which needed a driver for three hours on Saturday, or a shelter which needed nappies.
Technology was also seen as important to enable simple giving by recognised methods like SMS or direct debit. However, tech was not seen as a particularly strong avenue for developing long-term engagement – many participants found it easy to forget about the charity after donating via a tech solution like this. For developing long-term relationships, young givers preferred engagement with real people via storytelling. They also didn’t want charities to use tech to deliver overwhelming amounts of information, like huge datasets – tactics like this could lead to disengagement.
Are wealthy millennials attracted to particular sectors?
While areas of interest ranged broadly, there were some common themes which emerged from our participants. These included:
- medical (including hospice and care)
- community initiatives
We heard a strong desire from participants to get involved in things which had directly affected them or people they knew, such as the loss of a child and dementia in the elderly. Some had been influenced by their working career, like an ex-policeman who was interested in how social issues led to crime and a doctor whose experience had led her to become interested in hospice care. Topics less commonly discussed but still cited included: homelessness, debt counselling and international development.
Why is the arts and culture sector seen as self-sufficient and not in need of philanthropic support from young people?
One reason cited was the notion that arts and culture already has a range of very wealthy benefactors. This was reinforced by seeing wings of galleries named after ultra-wealthy individual sponsors. The impression this gave was that the sector already had a lot of money in it – especially in the form of large-scale donations – and therefore didn’t need the more modest amounts that our participants were able to offer. Endorsements from celebrities served to strengthen the notion that ultra-rich people were the ones who should be ‘backing’ the arts.
Many participants also felt they were already supporting the sector through buying tickets for events or concerts, or subscribing to online streaming services. The participants did not seem to understand that many arts and culture organisations were only rich in assets (such as artworks or premises), but not in cash. On the subject of community activities, many participants did not realise the scale of community work that arts organisations were involved in and the subsequent social benefit this brought.
How can wealthy millennials become better informed about the needs of the Arts & Culture sector?
- Sector organisations need to shine a light on the community based-projects they deliver;
- Sector organisations need to be more public about their registered charity status, and talk more about their charitable objectives;
- Sector organisations need to quantify the value of different donation levels. For example, “£10 lets us do X, £50 lets us do Y, and £150 enables us to achieve X, Y and Z for people who are BBB”.
How can charities counter the negative perception of core costs?
Those participants who understood the role core costs played in charities were mainly the ones who worked in the public sector. So, charities need to make sure they align their explanations of core costs with corporate structures. Use things people understand to educate young givers in the necessity of core cost funding. An example of this could be: “the NHS needs managers as well as doctors – and the better the competence of the manager, the better equipped the doctor.”
It is also important to show that ‘core costs’ encompasses much more than simply salaries and stationary (think marketing, communications, etc). Charities need to talk about the essential nature of core cost funding, as well as what would happen without it. Charities may wish to publicise their staff salaries when compared with private sector counterparts in order to show value for money.
What constitutes a “normal” level of giving for young people?
The #YoungGivers research focuses on wealthy young people’s attitudes to philanthropy and their giving habits, rather than seeking to determine thresholds for generous giving. However, Beacon has published research into generosity thresholds in the UK previously, which can be found here. This research provides a breakdown of ‘generosity’ at different wealthy levels and the linked article contains important context for understanding these thresholds.
Do wealthy millennials think of impact or social investing?
Our participants did not talk about this. Very few understood it, even when prompted. Our guess is that young givers understand these topics even less than conventional giving and that these methods could be seen as more risky in some ways. Young givers would definitely benefit from more education and exposure to impact and social investing.
Are wealthy millennials concerned about the notion of giving to ‘bad charities’? What constitutes a ‘bad charity’ to them?
Our sense was that participants considered ‘bad’ charities to be the ones newspapers said were bad. These are the ones who have some form of public scandal that everyone reads about. They are also the ones that someone in the community criticises and so donors are not willing to support them as they do not want to openly admit that they do.
There is not necessarily a real issue with ‘badness’, rather a perception issue, with a lack of competing arguments and no place to refute the bad press. Young donors are getting their news from mainstream media sources and fast-moving social media, so when something is labelled as ‘bad’ they seem to accept it and do not have the time to question it in-depth. There was a common theme that ‘misuse of funds’ or ‘bad management’ were indicators of a bad charity, but very few actually did significant levels of research into the charities they gave to.
Young donors are still at the formative stage of a potentially very prosperous career and do not want to rock the boat. This leads them to stick to what they know – places they have visited or seen in action, large charities with stellar reputations (CRUK, NSPCA, etc), and places their friends recommend or the news says are good.
When discussing the operations of charities more broadly, one participant mentioned that there are sometimes charities with overlapping remits and that these charities might have better success if they worked together. Suggestions like this could help to counter the ‘bad management’ narrative by demonstrating charities are willing to map the landscape and ensure they are not wastefully doubling-up on tackling the same issues.
There was also the feeling among participants that some charities were a lower priority to give to than others e.g. crisis charities are immediate, whereas many put the arts and culture into a box that, though significant, doesn’t need support in the same way.
What are the opinions millennials have about continuing the legacy of their parents?
It is impossible to generalise. There were a few participants who talked about the influence of their parents in their generosity and a desire to donate in similar ways, but this wasn’t an area we explored in-depth. Some wealthy young millennials had inherited large amounts of money and were working hard to do good with it. Some of them appeared conscious of overcoming guilt they felt around inheriting large wealth. Many worked on leading others of their generation to the idea of “reparation philanthropy” (e.g. Resource Justice). Our research only contained one focus group of millennial inheritors (compared to seven groups of millennials who had become wealthy through being high earners).