Millennials take a communal approach to engage friends, family and colleagues to address the social issues they care about—an approach family principals could adopt as they look to bring their next gens into the fold.
How the cohort of 1.8 billion people, the quarter of the world’s population who were born between 1981 and 1996, really think, feel and want, beyond media myths, has been of immense interest to all for years. Family business leaders of the baby boomer generation, who look to sustain their legacies after decades of work, were no exception.
But what was once speculation became change-making reality as digitally fluent millennials settle into positions of power and influence. Nearly one-third (29%) of next gens surveyed by Campden Research for The Global Family Office Report 2018 said they were already holding management or executive positions while 23% already sat on the board. Millennials and Generation X-ers stood to benefit from the $30 trillion transfer of wealth from baby boomers over the next 30 years, which many family businesses are now experiencing.
Family businesses and offices have been urged by experts to become authentically purpose-driven—next gens’ interest in impact investing was seen as a way to reach out to them and fire their interest in the family firm. Millennials’ increasing appreciation for direct and strategic investments and the priority they placed on reputation and branding could ultimately align with the ethos of their family business, if principals navigated these waters carefully.
The US philanthropic Case Foundation summarised 10 years of its research into how millennials interact with causes and social issues from more than 150,000 respondents in The Millennial Impact Report, released last week. The report aimed to inform practitioners about the opportunities to “discard a one-size-fits-all mentality and adopt more responsive models of constituent engagement to better meet young cause enthusiasts where they are.”
Case Foundation researchers described millennials as “Everyday Changemakers” who exhibit social good from small donations to large socially responsible investments which were designed to bring about a social good the investor supported. They believed in activism and cared about social issues—civil rights/racial discrimination, healthcare, education and employment were the causes closest to their hearts. They contacted their political representatives and voted.
Their passion was for issues, not institutions, which could include the family business. If passion for an issue drove millennials to get involved, trust kept them true to an institution which addressed their issue, the report found.
“More than 90% said they would stop giving to an organisation if they began distrusting it. In a reflection of that trust, more than three-fourths would stop giving if they aren’t told how their contributions help.”
Millennials valued collective action and networks and distrusted the government’s ability to address social issues like poverty (33%), race and culture (32%), and student loans (30%). They were impatient with bipartisanship and politicking, “a major reason they are developing their own ways to inspire and affect public policy change,” the report said.
Whichever ways millennials showed their support for a cause, 81% were confident those actions would lead to improvements and holistically were already making an impact. A millennial was far more likely to become involved if their peers were already.
“One significant, unique notion supported by 10 years of research is that millennials acting in small ways individually often create leverage as a large, active group capable of influencing great change,” the report said.
The change in attitudes among the largest generation alive today was reported by Campden Research, with Oppenheimer Funds, in Coming of Age: The Investment Behaviors of Ultra-High Net Worth Millennials in North America.
Millennials enjoy a growing influence in the management of their family portfolios, but they plan to make “significant changes” in how investments are managed when they assume control, Coming of Age said.
“The next generation of wealthy investors are hungry for deals and have an appetite for calculated risk. Millennials want to make a positive change and are planning to incorporate ESG standards to their family portfolios, and increase allocations to impact investing.”
A clear majority of the millennials Campden Research surveyed said while they considered impact investing to be of “moderate-to-high” risk, they plan to move more assets into impact in the next five years.
Jean Case (pictured above) said some of the changes millennials were making may make traditional players uneasy and raise questions about effectiveness. However, “the non-profits and companies that successfully engage this group and respond effectively to this new way of pushing for social change will ultimately be better positioned to harness the energy and passion of this large generation.”