Here’s Why Socially Conscious Younger Donors Will Reshape Arts Philanthropy

A new report by TEFAF titled “Arts Patronage in the 21st Century” joins a growing body of research looking at how young individuals poised to inherit trillions of dollars will affect the future of arts philanthropy.

The most important finding in the report will sound familiar to readers of Inside Philanthropy’s arts and culture vertical. Younger patrons are more socially conscious than their predecessors. The report found that 65 percent of those under 35 said they “think arts organizations have a duty to screen monetary donations to ensure the source of the donation is ethically sound.”

The reports suggest that while arts organizations should remain responsive to their older, wealthier patrons, they must also pivot to greater “sustainability, transparency, social impact and accountability,” to quote TEFAF CEO Patrick van Maris, if they hope to engage millennial and Generation X donors in the coming decade.

I encourage you to read the entire report, as it hits on many key issues, such as the rapid growth of online crowdfunding platforms and how patrons measure the value of art. However, for the sake of brevity, I’d like to focus on the report’s findings pertaining to younger donors. Anders Petterson, founder of ArtTactic, writes that this generation “could be exactly the wake-up call needed to start the process of adapting to a broader demographic change that the sector is facing.”

Connectivity and Ethics

Younger donors care deeply about connectivity and ethics. Seventy-three percent of millennials surveyed said that their primary motivation for giving was that “it makes them feel connected to other people and builds their social network,” versus 62% for Generation X and only 54% for baby boomers. This data explains why funders like Bloomberg Philanthropies and the Knight Foundation have turned to technology to make museums more inclusive and collaborative spaces.

Younger donors are also asking the kinds of tough questions that their elders have preferred to avoid. These questions, Petterson writes, include “Can private funding or support ever be ethically ‘pure’?” “Where do we draw the line?” And “who draws up the line in the first place?”

Thomas Marks, editor of Apollo magazine, led a panel discussion titled “New Models and Innovations Shaping Art Patronage in the 21st Century” at the Maastricht Exhibition and Convention Centre in the Netherlands to coincide with the publication of the report. Marks presented a series of funding situations that resembled recent controversies such as toxic gifts from the Sackler Family.

All participants agreed that museums should reject funding from the hypothetical toxic sources. This stands in stark contrast to executives at American museums like the Met who ineffectually defended their decision to hang onto Sackler cash until the last possible moment.

Participants also talked about the importance of “performing due diligence when accepting funds and what the specific obligations of institutional fundraisers should be,” wrote ArtNet’s Eileen Kinsella. While hindsight is 20/20, it is nonetheless worth mentioning that many institutions happily accepted money from tainted donors like the Sacklers and Jeffrey Epstein despite very long and public records documenting their transgressions. If these institutions engaged in due diligence, it was clearly lacking.

While increased pressure on arts organizations to scrutinize private support could affect museums’ financial prospects in the short term—an unpalatable prospect further magnified by COVID-19—Petterson writes that in the longer term, “it could potentially generate new funding streams from companies and individuals that want to be associated with a sector that takes these ethical concerns seriously, and encourage new innovation and models around private and corporate patronage to develop.”

“There is No Perfect Solution”

TEFAF’s findings come as funders are trying to make sense of the younger generation’s unique and evolving approach to philanthropy.

The Surdna Foundation’s work to support the next generation of progressive philanthropists found that many heirs have a different view of market-based capitalism than their parents. Some have been forged in the crucible of the Great Recession. This new generation is more likely to be skeptical of the economic status quo and more willing to use their newfound wealth to challenge existing systems.

In 2018, advisory firm M+D, with support from the Knight Foundation, launched the Art Funders Forum to increase private support for arts and culture with an emphasis on engaging younger philanthropists. M+D co-founder Sean McManus told me that this demographic views giving as “more process-driven than transactional,” in contrast with an older donor class. “This is the e-commerce generation,” he said. “The arts experience has to be nuanced, exciting and original.”

In particular, the “social justice issue is huge,” he said. “It’s one thing to experience traditional works of art, but what are institutions doing to drive social change?”

In the TEFAF survey, 96% of respondents under 35 said that their most important criteria in supporting an arts organization or art initiative is that the organization is “honest and ethical,” followed by “well-governed and well-managed,” “true to their charitable values,” “transparent about where money goes,” and “efficient [in their] use of resources.”

Petterson acknowledges that questions of ethics can quickly lead stakeholders down a slippery slope. For instance, Petterson asks, “Are donations from carbon-intensive industries such as agriculture, automakers and airlines acceptable? What about the financial institutions that help finance fossil fuel infrastructure?”

“In a world where public opinion changes rapidly—transparency and openness is key,” Petterson concluded. “There is no perfect solution, and each art organization needs to adapt its funding strategy in consultation with its stakeholders, its existing funders and its audience.”

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