Ethnic Philanthropy & the Younger Generation

I recently worked with an Arab-American organization in New York City, and had the opportunity to learn about philanthropy in the Arab-American community. Arab Americans don’t have a community-based history of philanthropy, I was told; many prefer not to give outside the family, to people they don’t know. For family members, they’ll do anything, but they don’t feel the obligation to give to support strangers.

In fact, informal traditions of giving exist within every ethnic community. They just don’t call it philanthropy, and they don’t always play by the “rules” of the American nonprofit sector by designating their donations for 501(c)(3) organizations. Many umbrella groups have spent considerable time, energy and money working to convince minority communities that their history of giving – to churches and mosques, to family members, to projects back in their homelands – is philanthropy, and is part of rich traditions that are connected to the American tradition of supporting nonprofits. The goal, of course, is to make a case for increased giving.

Convincing members of some ethnic communities to become donors is a high-stakes game for fundraisers, especially those working for ethnic-focused nonprofits. A significant portion the $41 trillion transfer of wealth identified by John F. Havens and Paul G. Schervish of the Center on Wealth and Philanthropy at Boston College will happen within minority communities. And The Coalition for New Philanthropy’s 2004 study of a small sample of African American, Latino and Asian American donors, Pathways for Change: Philanthropy Among African American, Asian American, and Latino Donors in the New York Metropolitan Region, found that ethnic donors give a significant percentage of their donations to organizations that serve their own ethnic communities. If they give to mainstream organizations, it is often to fund programs targeted to reach a minority constituency.

The Pathways study found that there are differences in giving among ethnic groups. African Americans give more to their churches, Latinos to community-based organizations, and Asian Americans to ethnic cultural institutions. What struck me most about the study, however, is that the major difference the researchers identified is between younger and older donors. Older donors, regardless of ethnicity, focused more on their own ethnicities. Younger donors (those under 40) think more broadly about community, and are less constrained by race and ethnicity. Instead of giving to a program that provides scholarships for their particular ethnic group, for example, they are more likely to give to a program that provided educational opportunities to children across a wide spectrum.

This generation gap among ethnic donors raises important implications for fundraisers. Donors who are under 40 now will no doubt be receiving a major portion of that $41 trillion transfer of wealth, at growing levels over the next few decades. As younger donors act differently in their giving than older donors, it is in a nonprofit’s best interest to expend considerable energy on creating messages that will inspire both generations.

Older donors, presently the larger and more lucrative group, will continue to respond most generously to messages focused on ethnic uplift. Younger donors, on the other hand, respond to messages that emphasize individual attainment through education, hands-on involvement, and strong business practices.

Nonprofits with an eye on the future will want to start to build donor loyalty among this generation. Perhaps that’s where FLiPs come in – in making sure that the philanthropic community, and the fundraising community in particular, doesn’t forget that younger generation.