Navigating the Generational Shift: Securing Future Viability through Strategic Philanthropy

By T. Brock Oliver, CPA

In a time of considerable hurdles, such as decreased enrollment and the phasing out of pandemic-related financial support, the upcoming Great Wealth Transfer presents an economic opportunity for organizations in the years to come. Institutions must strategically align themselves to tap into this potential revenue stream with an anticipated shift of tens of trillions of dollars from the Baby Boomer generation to their successors in the next few years. The recent $200 million donation to DePauw University highlights this strategy and demonstrates the significant impact of connecting with potential donors across different age groups.

Understanding the Generational Dynamics

Baby Boomers have spent decades building their wealth and are now preparing to transfer their wealth to the next generations. However, these younger heirs have values and priorities that differ from their predecessors. For organizations, navigating these generational shifts requires strategy to connect effectively with each group.

Engaging Baby Boomers

Baby Boomers appreciate communications that recognize their contributions. Establishing personal relationships and customizing messages to match their interests can strengthen their bond with the organization.

• Emphasizing Their Legacy: This demographic values legacy. Organizations should promote options for legacy contributions, like naming opportunities for endowments, scholarships, or buildings, that resonate with the donor's passions.
• Varied Donation Methods and Estate Guidance: Providing a selection of donation avenues and offering information on estate planning can make the giving process smoother. Hosting workshops and offering one-on-one consultations can assist in incorporating philanthropy into their estate strategies.
• Appreciation: Showing gratitude for their donations is essential in valuing donors' generosity and encouraging further contributions.

Preparing for Younger Generations

Organizations need to dedicate effort to grasp the core values, preferred ways of communication, and charitable interests of Gen Xers and Millennials. These younger groups prioritize openness and more digital ways to give.

• Prioritizing Digital Interaction: Adopting a digital-first strategy in communication and fundraising is crucial for connecting with younger donors.
• Highlighting Transparency and the Effects of Donations: Younger donors want to see the real-world impact of their contributions. Sharing precise results can build trust and encourage them to continue their support.
• Offering Varied Ways to Get Involved: Beyond just donating money, younger people often want to be actively involved. Providing options for volunteering or participating in advisory capacities can strengthen their engagement.
• Informing About Different Ways to Give: It is important to educate potential donors, who might need to be fully aware of the various methods available for making contributions.

Addressing Revenue Challenges

The decline in student enrollment and the conclusion of pandemic funding have left many institutions facing significant financial pressures; highlighting the importance of diversifying revenue streams and enhancing donor contributions. The Great Wealth Transfer represents a timely and imperative opportunity in this context, offering a pathway to recover lost revenue and build a more sustainable financial model for the future.

The DePauw University Example

The recent $200 million gift to DePauw University is a powerful example of the significant impact of strategic donor engagement. This historic donation provides immediate financial support and sets a precedent for gifts that institutions can aspire to receive. It also highlights the importance of maintaining strong relationships with alums and other potential donors.

Conclusion

The Great Wealth Transfer comes as an opportunity to safeguard future prosperity. Institutions can secure the crucial funds they need by adeptly connecting with donors of all ages, highlighting the significance and lasting impact of their gifts, and providing convenient donation options. DePauw University's impressive donation shows what proactive and thoughtful philanthropic efforts can do. As institutions grapple with lost revenue streams, leveraging the Great Wealth Transfer becomes an option and a vital strategy to flourish in the coming years.