Two client segments—millennials and women—are ahead of the philanthropic curve, and their more inclusive, strategic approach means a sharper focus for giving and a greater impact for investing.
Making an Impact
The benefits of incorporating strategic philanthropy, which seem so evident today, didn’t happen overnight. Philanthropy has steadily increased since 1954, and the single largest contributor to growth in recent years is the individual investor ($282 billion in 2016), not foundations ($59 billion) or corporations ($19 billion).
Individual investors and family offices are the change agent in product development, as increasing demand is reshaping philanthropy and driving advancements in impact investing. These investors follow in the larger footsteps of institutional investors, who led the way in creating demand for the first environmental, social and governance solutions.
High-net-worth individual investors have since raced ahead of institutional investors in driving real change in impact investing, demanding products that meet a broader range of needs, more efficiently and more effectively. While institutional investors have generally focused on screening out unsustainable companies (because of risk), individual investors are more interested in using their financial capital to make progress in issues they care about.
What Inspires Generosity
Millennials and women investors have some unique shared connections that are shaping how both client segments are thinking about and acting on charitable intent:
- Rising economic power and financial influence, pushing conventional approaches to investing and philanthropy in new directions; and
- Prioritization of giving and an aspiration to make an impact beyond simply preserving wealth for future generations.