Soon after the COVID-19 outbreak and ensuing stay-at-home order hit Michigan last spring, Ann Arbor tech entrepreneur Joe Malcoun formed a philanthropic venture to help restaurants and frontline workers.
Malcoun, an early stage tech investor who co-founded the coworking and event space Cahoots, partnered with other local investors and companies to raise $200,000 for a program that distributed restaurant gift cards to 2,000 health care workers in Southeast Michigan. It was Malcoun’s idea of delivering swift relief to struggling restaurants and essential frontline workers.
Through his marriage to Caitlin Klein, Malcoun is also the beneficiary of a substantial inheritance. Philanthropy researchers would classify him as a “next-gen donor,” and his gift card plan exemplifies several of the characteristics that are helping these donors reshape the philanthropy world.
In general, next-gen donors seek an immediate effect by taking new approaches with their giving that’s increasingly targeted at social problems.
“For whatever reason, our generation is very much trying to find a way to live our values,” Malcoun told MiBiz. “When you have resources that a lot of times were inherited, there is this sense of: ‘I have to do something with this.’ If I didn’t earn it, I at least have to make sure we do some good with it and invest it in things we’re passionate about. That ends up translating into a lot of social issues.”
A recent survey by nonprofit experts shows that the pandemic exacerbated these trends among next-gen donors.
Michael Moody, Frey Foundation Chair for Family Philanthropy at Grand Valley State University, and Sharna Goldseker, founder and vice president of New York City-based nonprofit consultancy 21/64, co-authored the 2017 book, Generation Impact: How Next Gen Donors Are Revolutionizing Giving.
Driven by a desire to continually expand on their original research, Goldseker and Moody wanted to see how next-gen donors were responding to the multiple crises of 2020: the COVID-19 pandemic, its economic fallout, and the racial justice movement in response to police brutality.
“We really just found that they were stepping up in incredible ways,” Goldseker said of next-gen donors.
The nationwide survey last summer included 111 respondents of next-gen donors in their 20s, 30s or 40s who had a “capacity for major giving,” Moody said.
“Next-gen donors are not only giving charitable contributions — writing checks, allocating grant money — but they’re also using other kinds of tools in the toolbox,” Goldseker said.
The efforts over the past year included developing tech platforms for other nonprofits, helping minority business owners access capital, and — in the run up to the election — helping to get out the vote during a pandemic.
The researchers summarized the findings last month for GVSU’s Dorothy A. Johnson Center for Philanthropy. In addition to the immediacy, new tools for giving and a focus on social justice, respondents also reported a “humble reckoning” about the “inevitable, persistent, yet often unspoken power differentials that underlie all philanthropy,” the researchers wrote.
Key questions leading up to the pandemic included whether these next-gen giving trends would continue, and for how long.
“What we found was that many of the things they told us they were doing in 2020 in an intensified way were expansions of what next-gen donors were already trying to push,” Moody said. “Certainly, there’s evidence that it’s going to continue long term. Really, the next generation feels the power and importance of giving time and talent.”
“Impact investing” and a focus on racial equity and social justice also gained steam during the pandemic, Moody said.
“Many (survey respondents) said that 2020 gave them a chance to talk about these values with their family and to think about how that affects their family’s giving,” Moody said. “I don’t think that’s going away.”
Goldseker and Moody are keeping the survey results informal but they plan to present their findings to audiences across the country.
“We really want to make this work helpful for the field,” Moody said.
Malcoun’s gift card plan was also relatively informal, and the work wrapped up as interest grew from outside of the region. The goal wasn’t to create a new business around the idea, but rather to deliver needed relief swiftly, he said.
About six months after the effort, Malcoun was at the center of a national political controversy after filming a commercial for then-candidate Joe Biden’s campaign. He was interviewed as a bar owner (he co-owns the legendary Blind Pig in Ann Arbor) struggling through the pandemic. Conservatives rallied around his background as a wealthy angel investor, which he openly acknowledged, to the point that the national ad was removed based on concerns over his safety.
After he put the experience and news cycle behind him, Malcoun said he is now focused on filling out his role as a next-gen donor, which he described as an ongoing learning experience.
Even so, Malcoun, who also serves on the board of the ACLU of Michigan, sees a strong connection between political and social advocacy.
“We’re learning, that’s what a lot of this is for us,” Malcoun said, noting he and his wife are relatively new donors. “There’s a massive overlap coming of social and political issues, and political contributions affecting social issues. That intersection is very important.”
EDITOR’S NOTE: This story has been clarified to note that the next-gen survey results won’t be formally adapted into new best practice guides.
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