Generation X not in giving mood—yet

October 4, 2004 | By Alana Semuels

This time last year, 34 percent of the 2003 graduates of Carnegie Mellon’s business school had made pledges to contribute to their alma mater, a weak showing even among notoriously stingy alumni in their 20s and early 30s.

Enter David A. Tepper, the 46-year-old millionaire investor and CMU graduate, who gave the school $55 million and urged students at the school - renamed the David A. Tepper School of Business—to follow his lead of “earning, learning, and returning.”

This year’s class gift participation: 93 percent, a threefold increase.

“It’s astronomical,” said Ron Schiller, director of university development and associate vice president of advancement at Carnegie Mellon. “It’s witness to the power of understanding the difference that philanthropy makes.”

But it is a lesson that most Generation Xers—people born roughly during the years 1965 to 1981—are ignoring across the country. Forget the image of cantankerous misers who refuse to part with their hard-earned dollars. Today’s 20- and 30-somethings are less likely to support charities than their parents’ and grandparents’ generations, forcing organizations around the country to look at nontraditional ways to involve young Americans in philanthropy.

Generation X’s “sense of civic obligation is not as strong as other generations that fell before them,” said William Strauss, co-author of four books about the generational trends. Strauss said because children born between 1965 and 1981 were not particularly well nurtured by their parents, they feel no strong need to nurture the needy.

Statistics support this claim. Only about half of Generation Xers give to charitable causes, compared with more than three-quarters of members of older generations, according to Giving Across Generations, a paper by Richard Steinberg and Mark Wilhelm at the Center on Philanthropy at Indiana University. Generation X’s average gift: $532, compared with the $1,707, or triple that figure, that older generations give.

The paper, published in 2003, took these numbers from a study conducted by the University of Michigan that tracked over 700 families since 1968.

Steinberg speculates that Generation X’s parsimony could stem from the lack “ratchet effects” in their youth—that is, a series of horrific events that involved them and turned nondonors into charitable givers. After each ratchet effect, donors give, discover that they like giving, and get on mailing lists to be solicited for further donations, he said.

“Having never had to make major sacrifices that the other generations made,” Steinberg said, “they were not socially conditioned to give as much.”

Larry Biddle disagrees. He worked in nonprofit fund-raising for 30 years and recently served as deputy campaign-finance director for Democratic presidential candidate Howard Dean, who raised millions of dollars over the Internet. Biddle says the number of young people involved and passionate has increased “exponentially” in the past four years, and they are giving more to causes than ever before.

“Young people are more inclined to believe in something strongly and do something about it,” said Biddle, citing their engagement over the Iraq war and interest in the presidential election.

Biddle thinks nonprofits are missing an opportunity to involve young people, many who have much of disposable income and will give to a cause that resonates with them. United Way is hoping to capitalize on this strategy locally. The Pittsburgh chapter started a Young Leader’s Group in 2001 for donors 45 and under who give more than $1,000 annually. The group provides young leaders the opportunity to meet United Way’s donor agencies and learn more about their community, said Tony Dias, chair of the Young Leader’s Group. .

Membership in the group grew from 125 in 2001 to 329 in 2003. “As people get involved, they seem to stay involved and get their friends involved,” he said. Dias, a 39-year-old Fox Chapel resident, hopes the group will evolve into a group of young professionals aimed at creating a new culture of philanthropy in Pittsburgh.

Dias is targeting people like Tracy Royston, 32, who lives in Regent Square. She said she has always donated to charities, except for two years when she lived in Florida, where she did not have strong community ties. She said she will donate to nonprofits in Pittsburgh to help make sure it is a healthy place for her family to live.

But some philanthropies are focusing on a small cohort of young, rich donors who have made fortunes as entrepeneurs, said Paul Schervish, director of the center on wealth and philanthropy at Boston College.

“This is the first time in history that people of such a young age have created such a flurry of major gifts,” he said, adding that when Generation Xers do give, it is to causes that advance human capital and innovation.

“The human mind is a large part of what has led them to their success,” said Schervish, “and it is what they attempt to recapitulate in their philosophy.”

The Tepper School might have gotten the best of both worlds—a young rich donor investing in the school and participation from a large percent of its graduating class, who were energized by Tepper’s gift and investment in the business school.

But while the business-bound Tepper graduates rallied around a large gift, Carnegie Mellon student bound for the working world is still saving up.

Kiran Bellubbi, 27-year old master’s student in public policy, said he does not give to any organizations. He could be following the Bill Gates method of giving—Gates gave little to charity in the nascent stages of his career but now is one of the world’s biggest donors.

“I’m a student on a tight budget,” Bellubbi said. “I need to first pay off my loans, and then maybe give to charity.”

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