Millennial entrepreneurs are more highly engaged and committed to charitable giving and volunteerism than their baby boomer and Gen X peers, according to a study released this week by Fidelity Charitable.
Some 80% of millennial business owners said giving was a very important activity in their lives, compared with 57% of Gen Xers and 48% of boomers, and nearly half said charitable giving was a critical piece of their identities.
Fidelity Charitable noted that entrepreneurs tend to be generous with their time and money. The firm’s Entrepreneurs as Philanthropists study found that giving was integral to an entrepreneur’s identity, and their median household donation was 50% higher than that of their non-entrepreneur peers.
“We know that entrepreneurs are committed and effective philanthropists,” Fidelity Charitable’s president, Pamela Norley, said in a statement. “Regardless of generation, entrepreneurs will continue to be a driving force for philanthropy in the world.”
Artemis Strategy Group surveyed 3,000 adults in the U.S. in 2018, including 708 current or former business owners. The analysis reported here focused on a subset of 288 boomer, Gen X and millennial entrepreneurs whose businesses generate $1 million or more in annual revenue. These respondents claimed itemized charitable deductions on their tax returns.
The survey found that millennial business owners’ median annual donation in 2017 was $13,654, more than twice the median donation of Gen X and boomer business owners.
Millennial entrepreneurs were generous with both their money and time in 2017, with 93% reporting that they had volunteered, compared with 74% of boomers.
Young business owners in the survey were already planning their charitable legacies. Nearly two-thirds said they intended to leave money to charity in their wills, versus 46% of boomers.
The survey also found that millennials were likelier to be serial entrepreneurs. Six in 10 had founded more than one business, whereas about two-thirds of boomer entrepreneurs had founded only one.
“The philanthropic landscape is changing, and our research shows that millennial entrepreneurs are shaping a new way for charitable giving,” Norley said. “Millennials want to feel a connection to causes they care about.
“While these characteristics are not limited just to the entrepreneurs of the millennial generation, their practical impacts on philanthropy become more pronounced through the lens of entrepreneurship.”
Across Generational Divisions
The survey identified a clear generational divide — traditional and intentional boomers, optimistic and active millennials, and Gen Xers who shared qualities with both the younger and older generations.
Ninety percent of millennials said they valued charities that offer meaningful opportunities to get involved. More than half said volunteering was a chance to learn new skills, compared with a third of Gen Xers and only a fifth of boomers.
Younger entrepreneurs in the survey also said charitable giving was a way to build their reputation, with 84% viewing giving as an opportunity to demonstrate leadership in the community. Seventy-four percent put great store in having their contributions recognized publicly, compared with only 19% of boomers.
According to the survey, Gen X entrepreneurs are focused on their local communities, with 90% saying they valued charities that benefit the area where they live, compared with 79% of boomers.
The results showed that like boomers, Gen X entrepreneurs tend to focus their giving on a narrow set of causes and prefer to support traditional, well-established nonprofits. However, they are more closely aligned with millennials in that they like to be hands-on, with six in 10 saying they preferred to be personally involved with the charities they support.
Two thirds of boomer entrepreneurs reported that they gave to a limited number of specific causes, compared with the 57% of millennials who said they supported a wide variety of causes.
Sophisticated Giving Strategies
The survey showed that younger entrepreneurs were giving in increasingly sophisticated ways. Yet three-fourths said they would like more guidance to make smarter giving decisions, and many were incorporating charitable giving into their financial planning conversations with professional advisors.
Eighty-four percent of millennial entrepreneurs said they had discussed philanthropy with their advisors, versus half of boomers. Fidelity Charitable said this may indicate that millennials are approaching charitable giving like other financial decisions: strategically and with an eye on optimization.
Eighty-five percent of millennial-owned businesses had at least one corporate giving program, compared with 58% of Gen X and 40% of boomer ones. Two-thirds of the former donated more than $10,000 to charity in 2017.
According to the survey, three-quarters of all entrepreneurs held securities in an investment account, but millennials were likelier to use them to fund philanthropy. It found that nearly two-thirds of millennial business owners had made the tax-savvy move to donate appreciated securities directly to charity, compared with one-third of Gen X entrepreneurs and only 15% of boomers.
Four in 10 business owners across all generations said they planned to exit their business in the next five years, with more than half the millennials in that group planning to donate shares of the business to charity before the sale, compared with 32% of Gen Xers.