Four cousins – let’s call them Nora, John, Lina and Peter* – are aged between their teens and mid-twenties. They are part of the new generation in a long-standing European industrial family that is now spread across the globe. They are now also part of an up-and-coming new cohort of philanthropists.

How did the family members start their journey?

Last year the cousins were given a lump sum by their family’s charitable foundation to donate to a project of their own choice. Although they had no prior experience in philanthropic projects, the family consciously decided to exclude parents, aunts, and uncles from having a say in the cousins’ choice. The only caveat was that the lump sum could not be split and used for multiple projects. A single, unified decision had to be reached.

The choice to involve the next generation in a family’s philanthropic efforts is not unique. A global rise in philanthropic giving, driven by increased wealth transfers and the next generation’s desire to act on their values, is playing an unexpected role in uniting wealthy families and different generations by helping them recognise their shared goals.

The interest of wealthy families in philanthropy has also been confirmed by Julius Baer’s 2023 Family Barometer, an annual publication that surveys more than 1,500 internal and external experts who work with wealthy families across the globe. The report shows that philanthropy continued to remain high up in discussion topics in wealthy families who view philanthropy as an important way to give back to society, creating a positive impact and providing international family members across generations with a purpose that binds them and brings their values to life. What’s more, involving the next generation of a family at a young age can instil pride, responsibility, and identification with the family values. These four cousins have proven exactly that.

Finding common ground

Nora, John, Lina and Peter had only met occasionally at family gatherings before they were given this unique opportunity to make a difference as a group. Despite stemming from the same family roots, their similarities appeared to end with their shared blood line. They had grown up on different continents and are at different stages of their young lives. Finding common ground to agree on one philanthropic project was not immediate.

Their search started at their charitable foundation’s first ’family philanthropy day’. They were presented with some pre-selected project options from a wide selection of charities based on previous discussions with Julius Baer’s philanthropy experts who worked to understand the cousins’ needs and desires. The cousins were also taught how to apply a criteria grid to help assess each of these philanthropic projects. Despite initially voting for four different projects, the assessment process allowed them to start to recognise their own values and identify areas of shared interest.

The cousins discovered their collective concern for the planet, in particular the ocean and its future. Profoundly aware of the weight of the gift they had received, they were excited and determined to use it to the best of their ability. The next round of voting quickly resulted in a clear, common winner.

Working together for one purpose

The cousins chose the Ecoalf Foundation as their project. The Spanish non-profit organisation, founded in 2015, focuses on innovation in the circular economy and the fashion world, with a clear vocation for ocean preservation and a partnership-based methodology. Ecoalf collaborates with local fishermen and turns the collected PET bottles into “Ocean Yarn” to be further upcycled into clothing and other fashion accessories.

“All of us love the sea and are determined to see more sea life not more garbage. Marine plastic poses a big danger not only to sea life, but also to our own health,” said Peter, the eldest cousin, and a passionate scuba diver.

Another point of attraction was that by choosing Ecoalf the cousins were able to double their financial impact. As Ecoalf was a partner of the Julius Baer Foundation at the time of the donation, every client donation granted to Ecoalf was matched equally by Julius Baer. Furthermore, Julius Baer Foundation’s knowledge in Ecoalf and their expertise in managing philanthropic projects proved to be an additional attraction.

A third factor that attracted the cousins, which is important to many young philanthropists, is the scalability of the project. The cousins chose Ecoalf also because it is not a one-off project but designed to be reapplied in different regions, for example, across France.

They also had the opportunity to visit their project together with the Julius Baer Foundation, and were able to learn in the field directly from the different Ecoalf stakeholders along the entire value chain. This allowed them to experience, hands-on, the impact of their giving.

A new generation driving change

One of the greatest wealth transfers in history is expected to take place by 2050. This new generation of inheriting wealth holders is bringing new ideas and demands with different values and views. They are globally oriented, socially and environmentally conscious, well-networked, digitally connected and keen to make an impact.

The new interest in philanthropy is also transforming how it is done. “No longer is it all about simply supporting a project at a distance, possibly as a one-off. Many philanthropists now want to take an active and long-term role in a more strategic approach,” explains Caroline Piraud, Head of Philanthropy at Julius Baer.

“The areas of interest have also shifted. We have seen an increase in interest in projects focused on inequalities, climate change, and since the pandemic also a desire to focus on projects that are closer to home.”

Piraud adds that different ways to fund a philanthropic project have also developed. New methods like crowdfunding and impact investing are being tried out as well as financing through long term, interest-free or even forgivable loans. “The interest of the new generation in philanthropy has definitely sped up the rate of change we are witnessing. The new generation wants to see more bang for their buck.”

Families, Piraud explains, have discovered that philanthropic activities can also provide a safe space for younger family members to be educated in financial literacy, learning about asset management, budgeting, and how to manage money. Philanthropy is frequently a useful element in a family governance structure, providing family cohesion and a neutral platform for different family members.

“Families can use philanthropy to fast track the next generation’s financial education. Succession planning can at times be trickier than wealth creation. What better way to teach the next generation about a family’s values and the value of money than by letting them play a role in ensuring the family’s legacy?” she adds.

This was certainly the case for Nora, John, Lina, Peter, and their broader family. Not only have they learned of their capabilities and power, but they also discovered a better understanding of their family’s legacy and gained internal family respect. And Ecoalf Foundation has found a new long-term ally in their efforts to clean up the Mediterranean.

*names have been changed to protect identities.