Part 2 - The Challenges and Barriers Facing the Next Generation of Philanthropists
The Lilly School of Philanthropy produced a report about “The Next Generation of Philanthropy” in January, 2025. This two-part blog post is based on their report—outcomes and thoughts.
As Gen Z and Millennials redefine philanthropy, they also face significant challenges that impact their ability to give. Economic barriers, lack of trust in traditional institutions, and shifting financial priorities are all factors influencing their philanthropic behavior.
Younger generations are facing unprecedented financial hurdles, including high costs of living, inflation, and overwhelming student debt. Research shows that Millennials hold the highest levels of student debt, which directly impacts their ability to donate to education and other causes. This financial burden has led to a decline in traditional charitable giving, as many prioritize their own financial stability.
Trust in institutions, including nonprofit organizations, is declining across all generations, but particularly among younger donors. Many feel uncertain about how their donations are being used and whether they truly make an impact. To regain this trust, nonprofits must embrace transparency, providing clear reporting on fund allocation, project outcomes, and social impact.
Unlike older generations who may have established giving patterns, younger donors prefer a more flexible and participatory approach. Instead of large one-time donations, they often contribute through micro-giving platforms, peer-to-peer campaigns, and social media-driven initiatives. Many also practice philanthropy in non-traditional ways, such as ethical shopping, advocacy, and community volunteering.
One major concern for younger donors is the difficulty in tracking the direct impact of their contributions. While they are highly motivated to support causes they care about, they expect data-driven results and real-time updates on how their donations are being utilized. Nonprofits that fail to provide transparent and measurable impact risk losing the support of these critical donors.
As next-generation philanthropists navigate their financial futures, many seek guidance from financial advisors on strategic giving. However, research suggests that younger donors feel underserved in this area. Financial professionals who can provide tailored philanthropy advice—such as impact investing, tax-smart giving, and strategic donation planning—will be instrumental in helping younger generations maximize their charitable impact.
Despite these challenges, younger donors remain passionate about making a difference. They seek meaningful engagement, value-driven giving, and opportunities to create tangible change. Nonprofits must adapt to these expectations by leveraging technology, building trust, and offering new ways for young philanthropists to get involved.
As economic and social conditions evolve, philanthropy will continue to transform. The organizations that embrace this shift will not only secure the support of young donors but also ensure long-term sustainability in the philanthropic sector.
