The Millennial Mindset: Belief in Social Entrepreneurship

While previous generations of philanthropists were also committed to social causes, many did not pursue the idea of giving to a for-profit organisation. However, the idea of funding social entrepreneurs, who are using market-based models to tackle social problems, is appealing to next-generation philanthropists. “We are seeing a greater interest from the next generation to go beyond the narrow circle of non-profits and charitable associations to support or even invest in social enterprises,” says Mr Vaccaro, CEO, CerPhi. “Being business leaders themselves, they are more interested in entrepreneurship.”

The influence from millennial wealth creators is also significant. Philanthropic efforts from the likes of Mark Zuckerberg, the founder of Facebook, and Pierre Omidyar, the founder of eBay, are prime examples. Matthew Bishop, a senior editor at The Economist Group and co-author of Philanthrocapitalism: How Giving Can Save the World, explains: “This is exerting a lot of peer pressure on millennial wealth inheritors to be much more ambitious, serious and entrepreneurial in their giving.”

Here, the options for philanthropic investment are broadening. Some young philanthropists are investing directly in social entrepreneurs or are even setting up their own social enterprises. Stéphanie Cordes, the 27-year-old daughter of Ron and Marty Cordes, who established their Cordes Foundation in 2006, argues that supporting social entrepreneurs enables people to lift themselves out of poverty rather than relying on charity. The foundation makes grants to organisations such as Indego Africa, which provides employment opportunities and education for artisan women in Africa. Noémie Amisse-de Goÿs, the 36-year-old founder of Amisse Foundation (established with funds from the sale of her father’s business), supports women in India who want to start their own business. “I am convinced that it’s essential for a woman to be independent. Women can be more productive if they are recognised for their work. Sustainability is something we watch out for.” Ms Amisse-de Goÿs is also more directly engaged with social businesses. She has created a renewable-energy heating company and launched a range of organic cosmetics with an ecodesign approach.

The growing interest in social enterprises is apparent among those who have broken away from the family’s traditional philanthropic activities as well. Mr Zniber, through Impact Lab, has invested in a for-profit snail farming project in Morocco, with the aim of providing economic inclusion for rural women. “They needed an activity that was simple enough, that didn’t take them away for too long from other work,” says Mr Zniber. “A snail farm doesn’t require much work, and you can start on a very small scale. In addition, there is a real snail market in Europe and a competitive advantage to producing snails in Morocco. So it fits the reality of Morocco.”

Ms. Case (Case Foundation)  identifies several emerging sectors that young philanthropists are drawn to, particularly when they are approached by entrepreneurs: FinTech (using technology to bring financial services to underserved communities); EdTech (using technology to expand access to education among low-income communities); food and agriculture (providing access to healthy, affordable food and support for smallholder farmers); and energy (providing affordable access to clean power sources for poor and off-grid communities). Mr Zniber explains that he is interested in “green” innovation, which involves developing processes and using technology aimed at minimising waste. Projects include “green” agriculture or building components of a smart city.

For those who are unable to engage directly, it is possible to give to the growing number of organisations which support and fund social entrepreneurs. Examples of these include Acumen, which invests in enterprises tackling global poverty, and Ashoka, which provides incubation support for social entrepreneurs.

Meanwhile, traditional beneficiaries such as arts institutions are of less interest, experts observe. “There is a strong sense that they want to support creative people and artists,” says Ms Berman, president and CEO, Rockefeller Philanthropy Advisors. “But there’s less of a sense that they want to support the institutions that have traditionally received the lion’s share of arts funding.”