Summer 2007
Generational Change:
Ready or Not,
The Times, They Are A-Changin'
by Patricia Miller
"The times, they are a-changin'," proclaimed one of the anthems of the Baby Boom generation. In the philanthropic community, four key factors are influencing the times and how they'll change:
- The Boomers, who began entering the workforce in 1968, are starting to retire. Or are they?
- A new, busier, more diverse, sometimes less affluent generation is taking its seat in the boardroom of family foundations. What will family philanthropy look like in the future?
- Young employees, some educated in philanthropic management, are eager to exercise their skills and ideas. Will current leaders ease the way for the new generation to take hold?
- Some experts predict a $41-trillion wealth transfer over the next 30 years. Who will these new donors be, and will they have new ideas about philanthropy?
The changes aren't a matter of if, but a matter of when and how. In a 2004 Annie E. Casey Foundation survey of more than 2,200 nonprofit organizations, 65 percent of the respondents expected to go through a leadership transition by 2009.
How that generational transition will occur is a question being asked throughout the philanthropic community. In What's Next? Baby Boom-Age Leaders in Social Change Nonprofits, authors Helen S. Kim and Frances Kunreuther write, "When it came to transitioning leadership, many older leaders admit that they did not know how to transfer the skills and experience they had gained during the past three decades to new leadership."
Baby Boomer Factor
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"When it came to transitioning leadership, many older leaders admit that they did not know how to transfer the skills and experience they had gained during the past three decades to new leadership."
— What's Next? Baby Boom-Age Leaders in Social Change Nonprofits
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When it comes to preparing for the generational shift, the elephant in the living room is the Baby Boom generation. What is this group of 78 million people going to do?
Recent data from the National Institute on Aging paints a picture of this aging generation facing longer, more active lives, coupled with rising costs for health care and other services. Some will continue working by choice, gradually reducing their workload rather than stopping abruptly. Many others will continue working out of financial necessity.
The impact of the Boomers will ripple through every corner of society. "Many reports have proclaimed a potential ‘gap' in nonprofit leadership as this large generation retires," said Bill King, president of the Minnesota Council on Foundations. "For sure, the ‘Boomer effect' will stress social service delivery. Funders will see pressures at both ends of the cradle-to-grave life cycle; clearly, foundations cannot make up the difference in what is needed and what government will provide."
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Generational Key
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Traditionalists (Greatest Generation)
Born 1901-1925
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Successful (Silent) Generation
Born 1926-1944
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Baby-Boom Generation
Born 1945-1962
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Generation X
Born 1963-1980
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Millennials (Gen Y)
Born 1981-2000
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One part of a solution may be engaging Boomers themselves to remain involved in community. The Atlantic Philanthropies created a "Community Experience Partnership" through its U.S. Aging Program to engage citizens 55 and older as agents of change who respond to community needs. The project has involved community foundations around the country, including four Minnesota foundations: The Minneapolis Foundation, Northland Foundation, The Saint Paul Foundation and the Southern Minnesota Initiative Foundation.
Earlier this year, Northland in Duluth completed a community assessment report for the foundation's seven-county area to help plan for using those over age 55 as an asset in the region.
Zane Bail, Northland's director of special projects, said the report, "Northeastern Minnesota Aging Initiative: Engaging Older Adults for Civic Good," is specific to the foundation's northern region but also reflects broad generational aging trends:
- People are working longer for financial reasons, including health care.
- They choose to work because they're not ready to retire.
- Many start their own businesses — an "encore career" — to fulfill a dream.
- At least 80 percent participate in some form of learning after age 50.
- Nearly 90 percent of respondents and focus group participants volunteered during the past year.
- Increasing numbers of grandparents are caring for their grandchildren, which limits the time they can devote to their communities.
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Zane Bail
Generation X |
"People are definitely giving back, still volunteering in some form, which has a huge impact on their communities," Bail said. "From the assessment, we learned more about the barriers that keep them from getting involved, whether it's transportation or not knowing about opportunities."
In a new Fieldstone Alliance book, Generations: The Challenge of a Lifetime for your Nonprofit, author Peter C. Brinckerhoff writes that "Boomers coming in the door" will have an impact on a nonprofit's staff, the people they serve and their volunteers. "If you serve people age 60 years and older," he says, "stand back and prepare for the onslaught."
He added that those of this aging generation who have spent their lives in the for-profit sector are retiring from their first careers and looking to do "something important" in their second. That something might be working for a nonprofit, but Brinkerhoff reminds organizations that these will be short-term employees.
That "something important" might instead be volunteering. "They'll have time on their very capable hands," Brinkerhoff says. "If you're smart and give them a cause, they could be the biggest and best volunteer force in history."
But Boomers also will be "going out the door," which will open vacancies on staffs — and open opportunities to diversify and bring in younger professionals. He advises organizations to "look at your management team. Are you training enough new managers internally? Do you have a plan for diversifying your board based on age?"
Next-Generation Family Factor
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Martha Dayton
Generation X |
In Minnesota, the Dayton family is synonymous with philanthropy. True to their family's philanthropic heritage, the fifth generation formed the Langwater Foundation five years ago. Martha Dayton, who serves as president, said there are about 30 members in her generation, ranging in age from 5 to 40.
"We have a huge spread of ages, and we're dispersed all over the world, but we wanted to find ways to work together to invest as a family," she said. When asked why, Dayton replied, "To say it's in our blood doesn't really explain it, but we were all raised with the examples of our parents' and grandparents' philanthropy. I look at the city we live in and see examples every day of what they've built. I feel it's our responsibility to retain that civic engagement."
Plus, she added, it doesn't take long to realize what is gained from giving, and that giving becomes part of one's core. At Langwater, Dayton said the board is working to determine a focus for its giving, not only to be more effective, but also to develop a common bond among this generation's members as they work together.
To Dayton, working together also means including the younger members of her generation. "Boards in general need to do a better job bringing in and educating younger members," she said. So Langwater has a revolving educational board seat for a "director in training" who has a voice, but no vote.
"It's a very eye-opening experience for a 13- or 14-year-old to read grant proposals and see all the needs in our communities," Dayton said.
As the fifth generation of Daytons discovers its philanthropic direction, Dayton said, "I think the key for a successful and sustainable foundation is to make sure the process is in place to transfer the knowledge, leadership, ability and passion from one generation to the next before it's lost. We also need to broaden the base and draw others in for what they can bring to the board, not just financially."
Emerging Leaders Factor
Want to know what's on the minds of new foundation staff? Check out a blog — newvoicesofphilanthropy.blogspot.com — written by Trista Harris. Called "New Voices of Philanthropy," the blog addresses topics of interest to young grantmakers — and those who hire them.
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Trista Harris
Generation X |
Harris, program officer of The Saint Paul Foundation, is an articulate advocate for the benefits young professionals can bring to the philanthropic community. For instance, she sees new grantmakers applying technology to bring leaders together, strengthen the funding process and broaden the donor base. She also sees the multicultural background of this generation, both in demographic diversity and comfort level working with people with diverse backgrounds, as a natural path to greater diversity in the field. And she offers a solution for Baby Boomers who want to work less as well as young professionals who want a better work-life balance: job sharing.
"It could be a really fantastic solution that opens job opportunities to younger staff and provides a way for current leaders to share their knowledge and experience before retirement," she said.
It's this kind of thinking that underscores Ron McKinley's belief that philanthropy isn't facing a leadership gap. "It's presumptuous to think there's going to be a gap," said McKinley, project director at Fieldstone Alliance. "There is extraordinary talent in our next generations. The ‘gap' will be filled when we in the older generation step aside. When it's the right time and the right place, new leaders will come forward. They'll be ready."
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Ron McKinley
Baby Boomer |
McKinley cautioned that organizations may not be ready for these new leaders. "Now's the time for organizations to reevaluate their charters, to reassess the vision of their organization and to begin to embrace the notion of new thinking and new leadership," he said.
He also encourages nonprofits to seriously examine how they plan to diversify their organizations. "In the very near future, more than half of the people in this country will be people of color," he said. "One opportunity for the new generation is to recognize value in contributions of people of all cultures."
Organizations also need to look at how they'll use the incredible resource known as Baby Boomers. "We want to continue to add value, to be accessible, to share our experience, but right now there's no mechanism in place to do that," McKinley said.
"The new generation is going to have to grapple with the wake of the Baby Boomers. They need to think about it, and so do we. We need to have conversations about how they can use us to the best benefit of the community."
New Donors, New Giving Factor
Boston College researchers John Havens and Paul Schervish rocked the philanthropy and nonprofit sector (and beyond) several years ago when they announced their prediction that $41 trillion will be transferred to succeeding generations in the next three decades. The implications for philanthropy are enormous, both in the sheer volume of new giving and the changing views about how to give. "We expect to see more new foundations but also increased giving outside traditional foundation structures, as some new givers seek to have an immediate impact," said MCF's King. "Some people will forego or limit endowments, opting for giving during the donor's lifetime."
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Bill King
Baby Boomer |
Another aspect of change is newer, hands-on forms of giving. Donor-advised funds at community foundations enable individuals to research and recommend charities of their choice. Giving circles allow groups of individuals to pool their resources for giving, and entrepreneurial models such as Social Venture Partners offer business people the opportunity to give strategically and also volunteer. These vehicles are providing donors with greater involvement in giving decisions, King says.
The new landscape of giving also will involve groups of donors who will play a larger role in philanthropy in the future:
- Women's incomes are increasing, and they are having a growing impact in philanthropy. They, of course, will also be half of the coming inheritors.
- Traditional giving as well as new types of giving in communities of color will become a greater factor as these populations become the majority.
- Programs to help young people learn about philanthropy early on, such as a Youth in Philanthropy program at Northland Foundation and various efforts in family philanthropy, are training the coming generations.
"Yes, the pie is getting bigger," said King. "And, philanthropy is also becoming more participatory, more diverse and more immediate."
Changing Times
So, the times, they are a-changin' for philanthropic organizations and nonprofits. Being open to these changes and believing that being different might even be better is the challenge — and the future — of the philanthropy community.
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Thank you to the sponsor of this issue of Giving Forum:
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© Copyright 2007 Minnesota Council on Foundations
Reproduction in any form without the written permission of the publisher
is prohibited.
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Bringing Youth on Board
A week after she graduated from college, Angela Johnson started a new job as a grant proposal specialist. Nothing extraordinary about that — except that Johnson first became acquainted with grants and proposals through an innovative project of the Northland Foundation in Duluth.
As a sophomore at McGregor High School, Johnson was invited to join an experimental board launched by the foundation. Youth in Philanthropy was created to acquaint young people with giving and help instill a lifelong commitment and involvement.
Youth in Philanthropy is no "shadow" board — it is a hands-on, hardworking board made up of area youth who meet quarterly to consider grant proposals that are presented and written by other young people requesting funding for youth-based projects. It's a real board responsible for managing real money — $30,000 from the Northland board.
"I really enjoyed the experience and helping youth make a difference in their communities through some very unique programs," said Johnson, who served three years on the youth board. "It made me more aware of the things that affect everyone in a community and how small steps can bring about a big change.”
Johnson believes her Youth in Philanthropy experience reinforced her interest in philanthropy and giving back to the community. She added that it also gave her good tools to evaluate an organization with which she might like to volunteer or support financially.
"I feel very lucky to have been part of the board, and it's inspiring that it's still going strong today.”
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