Entrepreneurs’ philanthropy across generational divides

How Millennial, Gen X and Baby Boomer business owners bring their generation’s attitudes and behaviors to philanthropy 

Entrepreneurs are committed philanthropists, proven to be highly engaged, financially savvy and generous with both their time and money. In our report Entrepreneurs as Philanthropists,  we found that giving is a core piece of an entrepreneur’s identity, and their median household donation is 50 percent higher than their non-entrepreneur peers. Many say that owning a business has helped shape the way they approach charitable giving. The passion, strategy and hands-on approach that help entrepreneurs succeed in business are reflected in their charitable giving decisions and values.

But entrepreneurship has also changed over time as technology advances and the world becomes increasingly interconnected. Younger generations of entrepreneurs have different approaches to business—and to philanthropy—than those who came before. This data analysis extends previous research, conducted among owners and founders of businesses with at least $1 million in revenue on how entrepreneurs give, zeroing in on generational differences and digging deeper into how age and stage of life affect an entrepreneur’s approach to charitable giving.

Generational profiles

As we look closer at three generations of entrepreneurs, the divides become clear—traditional and intentional Boomers, optimistic and active Millennials, and Gen Xers who bridge the gap, sharing qualities with the generations on either side.

Millennial entrepreneurs

Millennials, born 1980–2000, are still learning and evolving—both as businesspeople and philanthropists. As a very active and enthusiastic generation, currently they are more likely to value charitable giving opportunities that help them learn, grow or expand their sphere of influence. While they are more likely than other generations to see giving as part of their identity, they also may have lower levels of trust in the nonprofits they support and are more likely to want to be hands-on in the direction and use of their financial support.

• Millennial entrepreneurs want to be hands-on and involved. Ninety percent value charities with meaningful volunteer opportunities, and more than half say that volunteering is a chance to learn new skills relevant to their profession, compared to a third of Gen X and only 20 percent of Boomers.
• Younger entrepreneurs see charitable giving as a way to build their reputation, with 84 percent saying they value giving as an opportunity to demonstrate leadership in the community. Seventy-four percent value having their contributions recognized publicly, compared to only 19 percent of Boomers.

Gen X entrepreneurs

Born 1965–1979, these entrepreneurs are in the middle or peak of their careers. Sandwiched between Millennials and Boomers, Gen X entrepreneurs also fall in the middle of most attributes measured in this analysis—sharing characteristics with both adjacent generations. Older individuals in the generation likely lean toward Boomer behaviors, while the younger members may skew toward Millennials.

• Gen X entrepreneurs are focused on their local communities. Ninety percent value charities that benefit the area where they live, compared to 79 percent of Boomers.
• Similar to Boomers, Gen X entrepreneurs tend to focus their giving on a narrow set of causes and prefer to support well-established nonprofits. However, more closely aligned with Millennials, Gen X likes to be hands-on, with 61 percent preferring to be personally involved with the charities they support.

The next generation of philanthropy

Millennial entrepreneurs are the most highly engaged and committed to philanthropy compared with Boomers and Gen X. Eighty-one percent of Millennial business owners say that giving is a very important activity in their lives versus 57 percent of Gen X and 48 percent of Boomers. Nearly half say charitable giving is a critical piece of who they are.

As natives to a highly interconnected, digital world, Millennials want to feel a connection to causes they care about, and they are highly engaged online. Nearly two-thirds of Millennials say they would go to social media to discuss nonprofits or to alert friends about volunteering opportunities and needs.¹ It is second nature to find and share information and make connections online, which could feed into Millennials’ sense of duty to make an impact on the world. 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.

• Sixty percent of Millennial business owners gave $10,000 or more to charity in 2017, compared to 43 percent of Gen X and 42 percent of Boomers.
• Millennial entrepreneurs are generous with both their money and time, with 93 percent reporting that they spent time volunteering in 2017, compared to 74 percent of Boomers.
• Millennial business owners are already planning their charitable legacies. Nearly two-thirds plan to leave money to charity after they’re gone, versus 46 percent of Boomers.

Advanced giving strategies

Younger entrepreneurs are going beyond simple cash donations—both personally and in their businesses—and are giving in increasingly sophisticated ways. However, 78 percent of Millennial business owners say they wish they had more guidance to make smarter giving decisions, and many are incorporating charitable giving into their financial planning conversations with professional advisors. While entrepreneurs of all generations are equally likely to work with financial professionals, 84 percent of Millennial entrepreneurs have discussed philanthropy with their advisors—versus half of Boomers. This could 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 have at least one corporate giving program—like employee giving and volunteer programs or a pledge to give a portion of profits to charity—compared to 58 percent of Gen X and 40 percent of Boomers. Two-thirds of Millennial-owned companies donated more than $10,000 to charity in 2017.
• Roughly three-quarters of all entrepreneurs hold securities in an investment account, but Millennials are more likely to use them to fund philanthropy. Nearly two-thirds of Millennial business owners have made the tax-savvy move to donate appreciated securities directly to charity, compared to one-third of Gen X entrepreneurs and only 15 percent of Boomers.
• Four in 10 business owners across all generations plan to exit their business in the next five years. More than half the Millennials in that group plan to donate shares of the business to charity prior to the sale—versus 32 percent of Gen X, for example.

Overlapping forces influence giving

Life stage is a strong factor in how individual donors prioritize different aspects of charitable giving, and some characteristics of Millennial and Gen X entrepreneurs could well evolve as they age, raise families, build their careers and eventually retire. However, other aspects are more likely purely generational qualities that have been molded by the technological, economic and political environment in which these individuals came of age. These are the characteristics that will endure to define the generations’ approach to philanthropy.

Conclusion

As Millennials age—and we wait for Gen Z to enter the landscape as a prominent philanthropic force—charitable giving will continue to evolve, becoming more social, connected and integrated into personal and professional settings. Regardless of generation, though, entrepreneurs will continue to be a driving force for philanthropy in the world. While they may approach philanthropy with varying attitudes, behaviors and values, the unique giving behaviors of entrepreneurs will continue to make an outsized impact on the causes they support.

Methodology

Artemis Strategy Group, an independent research firm, conducted a research study on behalf of Fidelity Charitable to profile entrepreneurs and their values, behaviors and attitudes related to charitable giving. 3,000 adults in the U.S. were surveyed in 2018, including 708 current or former business owners. Unless otherwise noted, all results presented in this analysis focus on a subset of 288 entrepreneurs across three generations—Millennials (b. 1980–2000), Gen X (b. 1965–1979) and Baby Boomers (b. 1946–1964)—whose businesses generate $1 million or more in annual revenue. Respondents donate to charities and claimed itemized charitable deductions on their tax returns.

¹“Top 100 Findings from the Millennial Impact Project,” 2015