It's no secret that millennials - kids born after 1980 and before 2000 - have already had a huge impact on the world; changing the way businesses do...business. After all, they're different. Often accused of narcissism, they actually seem to embrace just the opposite: communalism, as recent research from the Brookings Institution shows. I don't need to read studies to know this; I see it in my own kids, ages 19 and 21. Millennials think "profit" means more than just cash in the bank, they want to work for innovative companies that improve the communities around them, and they buy from ethical businesses that support solutions to specific social issues.
Where is the real impact for financial services firms? Money: how they invest it and how they give it away.
After all, the millennial generation may not generally pursue jobs with high salaries, but they will be inheritors to the greatest wealth transfer in history: over a decade ago, Boston College researchers predicted that $40 trillion would shift from older generations to their heirs in the subsequent 40 years. That shift has already begun, and millennials will get a huge share of it. Not only will these millennial inheritors likely look for a new financial advisor to manage their money, as opposed to sticking with the family advisor, they will also want to ensure their money positively impacts society, and they tend to crave intimate involvement with the causes they support. This could transform charitable giving.
According to Achieve, a research firm specializing in millennials, the top three reasons young people get involved in a cause are passion, meeting people and enhancing their expertise. So it's no surprise they don't like tossing cash into a bucket, writing a yearly check, or using the dozens of other donating vehicles baby boomers have typically employed to give their money. They are empowered to tackle sweeping problems on the ground instead of from the air. They want to know who is behind that Santa suit, where the money is going, who counts it, who is accountable for granting it. Given their interest in community and familiarity with social media, they will probably also want to engage with a giving community, preferably online and social -- one to which they can belong.
But does such a thing as this exist?
Enter Nexus, an organization I have been involved with since its first Global Youth Summit in New York City four years ago. I am proud to say that I am a member of a minority at Nexus: baby boomers are the least represented of the generations among the group's participants. A project of The Giving Back Fund, a non-profit organization, Nexus brings together a network of over 2000 young investors, social entrepreneurs and so-called allies, who work together to promote and improve philanthropic giving and impact investing. Membership includes people from more than 70 countries, and hundreds of the world's most influential families.
The Nexus Global Youth Summit is a refreshing change from the stiff events that are usually held for wealthy clients. It has a Woodstock feel, content that rivals Milken Institute events, and an attendee list similar to the World Economic Forum: over 500 participants with a combined net worth in the hundreds of billions. The conversations that take place at and around the Nexus Global Youth Summits, held annually at the United Nations, have helped scale projects globally, generate millions of dollars in charitable giving and helped to inspire the creation of many new social businesses and nonprofits. These conversations occur between people whose values, ideas, causes, social ventures, and community are very different from those of their parents. These young people want their advocacy to be a personal brand, one they are proud to let others know about, and they want a sense of community and belonging. Nexus' summits catalyze the combination of money and positive social ideas.
Patrick Gage, 19, and his mother, Dr. Kelly Gage, both members of the Carlson family, which owns dozens of luxury hotel chains and other travel companies worldwide, can attest to the power of this combination.
"Given that a world's worth of knowledge is now at our fingertips, I think the millennial generation is more acutely aware of international social issues," Dr. Gage said. "As such, their interest in widespread, global problems exceeds that of previous generations. I think this is where they want to make a difference. They aren't content to positively change their neighborhoods or cities; they want to change the world."
Patrick echoed this sentiment, especially in regards to technology. "Look at social media, for instance. A barrier that has divided the world for thousands of years - lack of communication - is literally disappearing before our eyes. With the click of a button, I can see the world's problems. How can I ignore that? How can I focus solely on my community when I can help so many more?"
Justin McAuliffe of the Hilton family, who is 26, feels millennials' comfort with technology is already transforming philanthropy. "Millennials have been raised in a world saturated with incredible technologies and interconnectedness, so it's no surprise that we focus on using new technology platforms to achieve greater transparency in philanthropy."
So what can Nexus tell us about how financial services must engage with millennials when it comes to investing and philanthropy?
1. Giving means not just money, but time
2. Having a voice and being part of a community is key
3. Passion/affinity matters- whether it's a country, cause, or disease that has impacted that individual or family
4. Creating platforms for ideas, facilitating conversations, providing for multi-generational dialogues, educating: these are things millennials appreciate.
Each year, I am energized and invigorated by the community of strong, passionate people who will change this world.
Millennials: my money is on them, and yours should be too.