The ages, motivations and interests of the most prominent and prolific philanthropists are changing. Welcome to the new generation of giving.
This article originally appeared in Blue & Green Tomorrow’s Guide to Sustainable Philanthropy 2014.
Philanthropy is changing. This is to be expected; even the wealthiest magnates age. As wealth – or some wealth, at least – passes down through the generations, it falls into the hands of a new breed of philanthropists with new ideas on how their money can do good.
Working with the Charities Aid Foundation (CAF), the Scorpio Partnership – a leading wealth management strategy firm – has recently surveyed the world of high net-worth and ultra-high net-worth philanthropy. The findings are not yet published, but CAF’s head of advisory Amy Clarke explains that the research sheds some light on a number of observed trends in the philanthropy world. It illustrates the rise of the under 40-45 philanthropist – the philanthropic emergence of the millennial generation.
“We have one of the largest transfers of wealth that’s ever happened between generations. Trillions of dollars of wealth are in the process of being transferred. Not all of it, but a lot of it is coming down the generations to the millennials, rather than across, so it’s a really exciting time for philanthropy because these guys do things differently”, Clarke says.
The under 40-45s are more engaged, she continues, eschewing the more traditional ways of giving, or “what we term the Dickensian philanthropy, which is mainly about cheque writing”. She goes on: “They invest in a cause but they also invest intellectually. They bring their expertise and they bring their networks. They’re very thoughtful, they’re very strategic and they’re very considered. They bring a lot more to the game.”
Cath Tillotson, Scorpio Partnership managing director, agrees. She notes that more high net-worths are becoming more hands-on. But why, exactly, is this happening? “I think it’s partly because those young people have grown up with much more awareness of these global issues and a more direct, personal connection with them because of the technology which has enabled them to be more connected.”
Tillotson notes that the advisory community is wising up to changing attitudes, as philanthropy appears more often in conversations regarding financial planning and lifetime goals, and supporting further engagement. She says, “I don’t think we’ve quite got so far yet that it’s regarded as a mainstream topic for discussion and a way of directing one’s investment portfolio, but certainly I think there’s a recognition within the advisory community that this may be a significant motivator for people.”
This revolutionary change in approach is perhaps best demonstrated by the emergence of social investment. Borne out of ethical and socially responsible investment, it combines financial returns with positive social outcomes – essentially making money from doing social good, rather than doing social good by philanthropically giving your money away. Because of this, younger high net-worths are becoming increasingly interested.
“We’re seeing a huge uplift in private clients interesting in using their philanthropic capital to stimulate growth in the charity sector but also to leverage that capital by making it available as repayable finance to charities, so it can then be repurposed time and time again. It’s a little bit like leveraged finance in the City, they’re pumping their philanthropic capital full of steroids and enabling it to do a lot more”, Clarke adds.
But it is not all about those millennials. Diaspora communities – populations who have left their more troubled homelands – are also a driving force in the new philanthropic order, Tillotson adds, citing Britian’s Indian community as a good example. “Many international Indians who are either born in India and now work here, or were born here and have parents who originate from India, have very strong links with the country. They may have business links with the country. You often find that they are particularly keen to support India in overcoming certain social challenges.”
Such a motivation, a driving force, is often key to true engagement with philanthropy, Tillotson argues. Diaspora communities, through their familial and emotional ties with entire populations who may not be as fortunate as them, have a natural incentive to give. In more comfortable communities, this driving force can be lost. Tillotson says, “I think this British community has been less engaged than either the previous generation or the future generations, simply because we’ve lived in a privileged society.”
However, Clarke suggests that older European generations are also playing an important part in the evolution of philanthropy, as concern grows that children’s princely inheritances may be poisoned chalices. “People are becoming concerned that the transfer of wealth down from generation to generation can be toxic and can destabilise individuals and families”, she says.
“There is a general awakening among ultra-high net-worths as they’re beginning to realise that there’s only so much money that one person ever needs in their lifetime. We’re seeing a lot of families, European families especially, starting to think about how they safeguard against the toxicity of wealth and philanthropy is playing a massive part in that.”
There is, however, some wisdom in the cliché that the more things change, the more they stay the same. Philanthropists’ methods may be changing, but their concerns remain fixed. Tillotson says, “The causes that attract the most attention are universal. Typically healthcare issues are very high on the agenda, followed by children and educational issues.”
Clarke lists a top three of “health, education and animals” as popular concerns among donors of all ages, genders and ethnicities. She notes that many experts expected a spike in philanthropy relating to environmental causes, as climate change became a more front-page issue, but if one is coming it is yet to arrive. “I wouldn’t necessarily expect huge change in the causes that people support, unless something catastrophic happens, and who knows what that could be?”
So in 10 years’ time then, when the next cohort of philanthropists emerges, what can we expect to see? “What we’re seeing with the millennials at the moment, that is only going to increase with generation Y and the generation after that”, Clarke says.
“In 10 years’ time, I think we’re going to see a very different kind of philanthropy. It’s not necessarily going to just be philanthropy, it’ll also be about investing for impact. It is very exciting.”
Cath Tillotson is managing director of Scorpio Partnership and Amy Clarke is head of advisory at the Charities Aid Foundation.
Photo – Andrew E Larson via Flickr
Will Self-Driving Cars Be Better for the Environment?
Technologists, engineers, lawmakers, and the general public have been excitedly debating about the merits of self-driving cars for the past several years, as companies like Waymo and Uber race to get the first fully autonomous vehicles on the market. Largely, the concerns have been about safety and ethics; is a self-driving car really capable of eliminating the human errors responsible for the majority of vehicular accidents? And if so, who’s responsible for programming life-or-death decisions, and who’s held liable in the event of an accident?
But while these questions continue being debated, protecting people on an individual level, it’s worth posing a different question: how will self-driving cars impact the environment?
The Big Picture
The Department of Energy attempted to answer this question in clear terms, using scientific research and existing data sets to project the short-term and long-term environmental impact that self-driving vehicles could have. Its findings? The emergence of self-driving vehicles could essentially go either way; it could reduce energy consumption in transportation by as much as 90 percent, or increase it by more than 200 percent.
That’s a margin of error so wide it might as well be a total guess, but there are too many unknown variables to form a solid conclusion. There are many ways autonomous vehicles could influence our energy consumption and environmental impact, and they could go well or poorly, depending on how they’re adopted.
One of the big selling points of autonomous vehicles is their capacity to reduce the total number of vehicles—and human drivers—on the road. If you’re able to carpool to work in a self-driving vehicle, or rely on autonomous public transportation, you’ll spend far less time, money, and energy on your own car. The convenience and efficiency of autonomous vehicles would therefore reduce the total miles driven, and significantly reduce carbon emissions.
There’s a flip side to this argument, however. If autonomous vehicles are far more convenient and less expensive than previous means of travel, it could be an incentive for people to travel more frequently, or drive to more destinations they’d otherwise avoid. In this case, the total miles driven could actually increase with the rise of self-driving cars.
As an added consideration, the increase or decrease in drivers on the road could result in more or fewer vehicle collisions, respectively—especially in the early days of autonomous vehicle adoption, when so many human drivers are still on the road. Car accident injury cases, therefore, would become far more complicated, and the roads could be temporarily less safe.
Deadheading is a term used in trucking and ridesharing to refer to miles driven with an empty load. Assume for a moment that there’s a fleet of self-driving vehicles available to pick people up and carry them to their destinations. It’s a convenient service, but by necessity, these vehicles will spend at least some of their time driving without passengers, whether it’s spent waiting to pick someone up or en route to their location. The increase in miles from deadheading could nullify the potential benefits of people driving fewer total miles, or add to the damage done by their increased mileage.
Make and Model of Car
Much will also depend on the types of cars equipped to be self-driving. For example, Waymo recently launched a wave of self-driving hybrid minivans, capable of getting far better mileage than a gas-only vehicle. If the majority of self-driving cars are electric or hybrids, the environmental impact will be much lower than if they’re converted from existing vehicles. Good emissions ratings are also important here.
On the other hand, the increased demand for autonomous vehicles could put more pressure on factory production, and make older cars obsolete. In that case, the gas mileage savings could be counteracted by the increased environmental impact of factory production.
The Bottom Line
Right now, there are too many unanswered questions to make a confident determination whether self-driving vehicles will help or harm the environment. Will we start driving more, or less? How will they handle dead time? What kind of models are going to be on the road?
Engineers and the general public are in complete control of how this develops in the near future. Hopefully, we’ll be able to see all the safety benefits of having autonomous vehicles on the road, but without any of the extra environmental impact to deal with.
New Zealand to Switch to Fully Renewable Energy by 2035
New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.
New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.
Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.
Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”
The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.
Zero net emissions by 2050
Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.
Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.
She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.
Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”
A worldwide shift to renewable energy
Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.
Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.
Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.
Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.
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