Episode Transcript
JOHN A: It's my immense pleasure to introduce to the Purposeful Planning Podcast audience, Stephanie Ellis-Smith. I first became aware of Stephanie — I'm not sure that I actually met her, but I became an admirer from a distance — maybe five or six years ago at an Advisors in Philanthropy conference where she was speaking and just being herself. And she immediately, immediately impressed me. She has been in the nonprofit philanthropic giving world for two decades. She's held virtually every seat at the social sector table. Her day job is as the CEO of Phila Engaged Giving, a firm she founded in 2017. Phila Engaged Giving has a nationwide clientele of high net worth, high profile individuals, families, foundations and corporations who strive to make catalytic investments that create meaningful social change for all members of society. She is, I would say, proudly, should be a certified advisor in multi-generation family philanthropy, which means she spends a lot of time navigating through the family dynamics that are present in every family. And she's also a chartered advisor in philanthropy. Both of those designations, I think, are very, very meaningful to the work that she does. So, she essentially does whatever it takes to get people, individuals and families ready to move private wealth into the public domain. Because of her background, she's compelled to share with her clients that she serves two masters, them, the donors, but also the community that she serves, and they wish to serve. So there's no recommendation that Stephanie or her colleagues make that doesn't consider the impact of that gift on nonprofits or the beneficiaries themselves. So with that, Stephanie, I'd love to invite you to share with our podcast audience, the wisdom that you've accumulated through your observations in your service, around the millennial and the Gen Z, what wealth transfers that are ongoing.
STEPHANIE: Thank you, John A. It's so great to be here. And this is a subject that I love speaking about, so I think it's going to be a great pleasure. We have been very fortunate at our firm Phila Engaged Giving to have a number of young clients. And by young, I would call that about 40 and under. And it's a really unique group of folks, and the way they look at engaging with philanthropy and their advisors are a little bit different than what we might expect from older clientele. And I would like to say at the outset, that there is of course a danger in making generalizations about any group of people. However, I would say that our conversation today really is going to aim to share some trends within the millennial, Gen Z, or NextGens (a lot of folks like to call them that demographic), and also to offer some tips and how to bridge the generation gap between the older and the young folks around philanthropic giving.
JOHN A: I really appreciate this approach, and I think you're fairly a rare bird, commodity, within the philanthropic consulting world with this emphasis on the millennial and Gen Z donors. I think Phila philanthropy is doing great work, and I'd love to understand, Stephanie, how you feel that the rising generation approach to philanthropy differs from, say, that more patriarchal/matriarchal family leader approach to philanthropy might take.
STEPHANIE: I'm happy to do that. I'll start maybe by just sort of giving a little demographic definition just to make sure that everyone who's listening, we're all on the same page.
JOHN A: That'd be helpful. That'd be great.
STEPHANIE: So starting out, millennials, edging out baby boomers is kind of the largest generation by size. They're generally defined as being between the ages of 24 and 38. Maybe a little bit older now, I guess, maybe 26 and 40. I think the oldest Millennials now are 40. Under 28 or so are the Gen Z's. And they are as young as about 15, I believe. They've come of age during the Great Recession. They're thought to be more circumspect about the ability of government in the economy to work on society's behalf much more so than the boomers or the earlier “greatest generation", as they're often called. Also important to know is that they're the first generation to come of age and the era of digital technology and social media. And I think that's a really huge distinction for this generation, particularly Gen Z. And I would even argue, more so for Gen Z with social media than even the millennials. And as a result of that 24/7 connectivity, their interests span the globe. So they're not just only interested in local organizations or local relationships, but their connections are worldwide. Their connections are also in person equally online. And they're all vitally important to their sense of self. It's this presence, I think, that both have as an online presence is equally as important as the presence that we put forward in person. So this need for information, connectivity, I think drives their decision-making, and has also had a really profound influence on the charitable sector this past decade. So knowing all of that, I would say, first of all, it's very crucial to know that if multi-generational family philanthropy — and just multi-generational families in general — are to be successful, we must really know how to connect effectively with each other in order to harness passions and interest and resources. Because that is actually how we make an impact by really connecting with each of them. So to your specific question about their approach. And in philanthropy. I'll start off with just a little stat. And that is millennials and Gen Z overall are more than twice as likely to make a donation than those aged 55 and older. And I purposely said, “to make a donation,” because it's not necessarily just making a donation to charity. They are tax agnostic. And I say this to the financial advisors who may be listening, who will often start conversations around philanthropy and charity as a way to be tax efficient. I don't think that's a good lead in for these generations, for the NextGens. They tend to be not caring as much about taxes. And so when I say they will make a donation, they will give directly to individuals, sharing cash, giving donations to nonprofit charitable organizations, and to political leaders/candidates. So, they're tax agnostic. That's one big way that they differ.
JOHN A: Stephanie, let me just ask you. That makes total sense to me, and I've seen that tax agnostic, in fact, almost tax planning resistant attitude among the millennials and the Gen X's, Gen Zers. But crowdfunding, that's become such an amazing vehicle, but it is tax agnostic. But I wonder, is crowdfunding, can we think kind of the Gen Z/millennials crowd that crowdfunding has become so popular and so heavily utilized?
STEPHANIE: Absolutely. They've had quite a bit to do with that from the earlier iterations of it. Kickstarter was starting businesses; that was a really big push in the early parts of the 2000s. And then of course, GoFundMe, Indiegogo, all of these different platforms that allow folks to raise funds for causes. Sometimes for nonprofits, but also for individuals. As I said, to start a business, to help someone who has gone through a bad patch. They've been very, very active on those kinds of platforms. I would also add a couple of other differences is about results and impact. They do care about that, and they want to see results immediately. Which is probably one of the reasons why they might be a little bit more resistant to some of the large, maybe more heritage style nonprofits where they feel that if they're going to make a donation, their funds would be just kind of commingled into a very large portfolio of other donations, and they can't necessarily see their impact and know exactly what happened. And that kind of ties into your comment, John A, about the fundraisers, crowdsourcing, online social media events, challenges, it's all a quicker turnaround of action. So that's another big distinction that I would say for this newer generation. And then, the last most important — not the most important one — but one of the last important distinctions is that they are also much more willing to give to those outside of their social and economic class. While older generations have typically given to charities that have a direct impact on their daily lives — maybe their kids’ school or the symphony, places that they personally benefit — NextGen donors are much more likely to give outside of their sphere of influence. And an example of that is giving around global giving, social justice causes, and things of the like. And I think those are really the more salient differences between this current generation that we're calling NextGen and older folks who've been giving historically.
JOHN A: See if you agree with this, Stephanie. It strikes me that this accounts for (what) I see within my grandchildren and my younger children a really strong interest in the environment, the globe. And so, it would be true, wouldn't it that this kind of willingness to give outside of kind of their social station or their direct, immediate geographic sphere of influence, they really care about the world, the planet, in all dimensions, not just in the traditional dimensions, I think our older generations have been accustomed to.
STEPHANIE: I would completely agree with that. And I think that directly comes back to the influence of social media; that you have the world sitting in the palm of your hand, and you can connect with, speak to, see the daily lives — via Instagram, TikTok, you name it — of your peer, anywhere around the globe any time of day, or live. So it makes the world a lot closer, and you do feel a much greater sense of connection to people who are not anywhere near you, or may not be even anything like you. So it makes a big difference.
JOHN A: Right! I've been staggered at how ready, willing or eager my older grandchildren — the oldest is 18 now, but their willingness — to go outside the US and experience the world. In particular, third world economies and cultures. It's pretty fascinating. Our podcast, Stephanie, is intended to be informative, and inspirational. You've already been both of these. All of these insights that you've been giving us, you're doing both. But this final one, I think we could add impactful, inspiring, informative. And now we're going to get to the impactful part of this podcast where I'd love to have you share with us suggestions of how our PPI community, and how advisors in general can start the conversation. You know, it's been such a difficult conversation for professional advisors to start. Any suggestions that you could offer that would make it easier, more natural, I think would have a huge impact, positive on this community.
STEPHANIE: Yeah, absolutely. And I will start off by saying that, at our firm, we have a lot of good conversations with advisors, wealth advisors, estate planning attorneys on how to approach this topic because we know that it's important to charitable families. And for us, as philanthropic advisors, of course, once we are working with a family or an individual, we have a tremendous amount of visibility into their most personal aspects of their lives, the things that motivate them as humans. And it's a really special place to be. And I think for all of us as advisors, we do better for our clients when we share and support our lines of influence. Because as a philanthropic advisor, we don't have visibility oftentimes. Sometimes we do, but we don't always have visibility into every other thing that they're doing in their portfolio and what's driving them on the non-charitable side. But sometimes I find that when we do, we're able to present a much more holistic way of looking at all of their assets—charitable and non. And those are when we have really robust and healthy relationships with their other advisors. So, we can share what we know, they share what we know, what they know, and then collectively, we can do better for our clients. Anyone who's listening to this podcast, I would think that they must already have some philanthropic clients or they're already thinking about it a little themselves. And so one of the things that I would just first recommend is just kind of level setting, getting on the same page with clients by sharing articles, or books, especially with maybe some NextGen, it might be a little too much, too much information all at once. But there are some great resources on philanthropy. If you go on our site, the Phila Engaged Giving, we have a newsletter, and every month we send out curated articles that are really interesting about the sector, and they are dedicated particularly to advisors, new philanthropists and young people. So it ranges everything from issue areas. Last month, I think we presented something on wild horses and your neck of the woods, John A, about the importance of wild horses, and helping to reconstitute open space and mitigating fire damage for climate, to financial advisors and tax implications of giving it year. And so, I mean, there's so many more things, but sharing articles, and having something to talk to together and reflect on I think is a great way to start. You can also encourage folks to become involved in philanthropy by getting them to volunteer, or seeing if they would like to volunteer, or following a few organizations on social media. You know, as I mentioned before, younger folks tend to be more action oriented and how they want to sort of approach their lives and approach their personal values. You can offer to make financial contributions in their name as gifts to groups if you know that they're interested in developing a relationship with. And then lastly, just making sure that they know that you're there for them when or if they want to talk more about charitable giving, letting them know that you have resources at your disposal. No one has to be the one expert on everything. But if you're their person, making sure that they know that if I don't have everything that you need, I can get it for you. So just, “Let me know, and I can help you get you where you need to be.” And then if I can continue on, also just to share a couple of questions, just sort of leading questions that we have found to work fairly well.
JOHN A: We'd love to have, we'd love to hear those. There's nothing more powerful than an igniting question, I call it.
STEPHANIE: Oh, I love it. Okay, I might use that term as well—an igniting question. So, if anyone uses these questions, and if they ignite or don't, please let me know. I'm always happy to take this feedback. So the first one is, “Are there issues you're particularly passionate about, and how have you been involved in these issues right now? And is there a way I can be involved to help support your efforts? Let me know how I can be a support. Is it a crowdfunding organization or effort that you're working on, I'd be happy to contribute $50.” We don't have to think that the sums that we would support our clients would have to be huge sums. More often than not, it's symbolic. And it shows that you care and that you're supporting what they're interested in, and that you're willing to learn what they're interested in. So I think that's a big one. The next one is, “Tell me about a place that you've donated to in the past couple of years. What attracted you to them?” And again, I would avoid using the term a charity. That is a legal and a very specific term, but sometimes I feel that it lands a little clunky in the ears of young folks, because charity can sound very top-down. You know, “Oh, you need charity.” And as opposed to I'm the person that is the beneficent one, and I'm going to lift you out of poverty. It just, it sounds weird to the ear of I think a lot of young people. So I would just say tell me about a place you've donated to or person you've donated to in the past couple of years, what attracted you to them, and how did you find them? How did you get involved?” And then the last is, “Are you giving just money to the organizations you care about? Are you also interested, or do you share your talents and your time as well?” Talking about volunteering, “What are you actually spending your physical time doing?” Oftentimes, many of them are volunteering as well. And I think that's a good thing to acknowledge and to remember that it's not just about the treasure, but their talents and time as well, is also extremely valuable.
JOHN A: I love that. I love all three of those questions, and I tried to make notes. I'm grateful that these podcasts can be re-listened to. I am convinced those are igniting questions, and I'd love to be the fly on the wall to hear some of the conversations that people listening to this podcast today are going to have as a result of this. Stephanie, is there anything else that you'd want to share before we close the podcast today?
STEPHANIE: Yeah, I guess I would just let folks know that there are organizations like the National Center for Family Philanthropy that offer really excellent opportunities for families, young people, to network, collaborate, learn from like-minded peers. And they also have a pretty robust resource section on their website that gives definitions of terms and issues in the field, as well as some practical advice. So I would check out in NCFP, National Center for Family Philanthropy. And then also our website as well has some resources, but especially our newsletter, and so I would encourage you to subscribe. And we also, I should say, do take requests. So if there are certain things that folks are really looking for, that they're kind of interested to learn about and would like to share with others and would like for us to put in our newsletter, we do take requests as well.
JOHN A: And I'm following the Phila Engaged Giving newsletter, and I just encourage everybody listening to us to follow the work that Stephanie is doing with her colleagues. It's marvelous. And I'm going to just close with a recent experience I had. And I think this is, you know, an addition to the igniting questions, something that ties in to what you're suggesting to the advisors and consultants today. I was privileged to step into a multifamily office recently, and on every wall that I could see in the reception area were these unique works of art, not what you would commonly expect to see in a fancy office like what I was expecting to enter. And these were more childlike. And so when the person I was to meet with came out to greet me, I had to ask, what was this art about? What I found out is that this was a cause that this multifamily office — the staff and the professionals — had adopted this charity as their charity. And it was basically a program to assist individuals who, we might say, had special needs. They were fighting physical or mental handicaps, but they had a program at the charity, where they encouraged these teenagers to paint. And these works, which they were then displaying and selling. If somebody wanted to pick up one of these unique words and take it home, they could purchase it. And that purchase would be a direct donation to that charity. And I have to admit it made me feel totally different about this office, this professional, when I saw the level of humanity that was underlying their commitment to this charity that they were approaching. So, I think that there's lots of ways in addition to the questions that we can become examples for these younger rising generation, family members, and they'll be amazed at the generosity in your heart and inspired by it. So, thank you. Thank you. I am so grateful that Stephanie has agreed to serve as a Dean of Philanthropy in the Purposeful Planning Institute. I look forward to her continuing to influence our community.
STEPHANIE: Thank you so much. It's a pleasure to be here. Great to be a part of this community as well.
JOHN A: Thank you.
