This last July, over 500 young adults, representing an estimated wealth of $750 billion, gathered at the United Nations headquarters in New York as part of the Nexus Global Youth Summit to discuss social entrepreneurship. They did not send their wealth or philanthropy advisors, but instead chose to spend three summer days cooped up in conference rooms to learn how to better use their capital and business acumen to make the world a better place.
The Nexus attendees reflect a dramatic shift in how millennials relate to wealth. The generation entering the workforce around the recent recession, laden with debt and weary of institutions, is set on making a difference. This may surprise those who view millennials as self-occupied and individualistic, quintessentially portrayed by the obnoxious selfie. However, it is a mistake to focus only on the superficial aspects of the fascination with the “self”; the emphasis on the individual is driving millennials to seek meaningful and value-inspired lives. This affects how they choose their jobs, consume, and importantly, invest their money.
As of 2015, millennials make up the largest generation in the US labor force. In addition to their earned income, they stand to inherit $59 trillion from baby boomers. A 2014 U.S. Trust survey found that 67% of millennials believe that their investment decisions are a way to express their social, political or environmental values, and 73% believe they can achieve market rate returns by investing in companies based on their impact. These factors help explain the global growing interest in for impact investing, a practice recently recognized by the CFA Institute as a distinct method of values-based investing that intentionally seeks to generate and measure social and environmental benefits alongside a financial return.
So how should we think about designing investment opportunities that appeal to millennials? The Nexus example holds several clues.
If you are a subscriber click here to login and read the complete article. For more information about the JSFB click here or contact us to learn more about Cornerstone’s research and service offering.
Avi Deutsch is Co-founder and CEO of LAVAN, a network of angel impact investors who support Israeli entrepreneurs tackling the world’s most pressing social and environmental challenges. He is the former Business Development Manager at Boundless Impact Investing, a market intelligence platform for impact investors. Prior to that he spent a year in Rwanda, building a safe and stable family environment for at-risk, orphaned youth.