Will structure shows millennial entrepreneurs put their money where their heart is

Call it the pandemic effect or consciousness for a greater good, increasingly more and more upwardly mobile, working professionals are pledging or giving away chunks of their wealth for philanthropy or for the cause they believe in.
Startup founders, consultants, lawyers and other C-suite executives, mostly aged between 30 to 45 years are seeking help from professionals to help them to navigate the terrain of philanthropy, not just from the vantage of giving but also from a tax point of view.

The data about the percentage or part of wealth pledged for philanthropy is difficult to ascertain given the fact that most agreements also include confidentiality clauses, said lawyers and advisors who spoke to ET.

“More than older clients, younger entrepreneurs are keener to take professional help in defining their philanthropic pursuits,” says Sonali Pradhan, Head of Wealth Planning at Julius Baer, a wealth management firm. “Covid has accelerated the execution of the philanthropic plan amongst many of our clients. However, the main driver for thinking about philanthropy in a more serious way is many liquidity and exit events.”

Impact investing and conservation of the environment are top of the mind for young philanthropists. Being entrepreneurs themselves, these young professionals are keen to help like-minded, same-age profiled social impact makers. Technological ventures are the most preferred ones amongst the entire impact investing space.

According to Anand Desai, managing partner of law firm DSK Legal, causes such as addressing hunger, education and skill development are some of the areas where most young and middle-aged philanthropists are keen to contribute.

Starting early
Many first-generation wealth creators are of the view that instead of keeping philanthropic giving towards the end of their lives, it is better to make the contributions while they can monitor the impact created by their donation. Many of them wish to actively get involved with the causes they are passionate about.

"People were pledging earlier as well; however, the pandemic has catalyzed this movement and a huge driver of this is social media and the internet," says Aakanksha Joshi, Partner at law firm Economic Laws Practice. During the pandemic, many inequalities were laid bare. At the same time, due to the nature of the disease that hit both the haves and have-nots equally ferociously, people also realized certain systemic challenges affecting all.

“Having lesser social interaction and more time to themselves, led to more introspection and I dare say, dissatisfaction in the status quo in people’s lives, the structure of the formal work sector as well as society. People are reimagining their lives and this world,” adds Joshi.

Many also call this trend a byproduct of more and more people opting to structure their will well in advance, which gives professionals a clear understanding of putting a certain portion of their wealth for doing good for others.

“In our experience, we have seen a trend of 30 to 50 years of working executives, professionals and business profile people starting to write their will as part of overall financial planning,” said Jatin Popat, founder of WillJini, an online will writing company.

“We have seen a few cases where 100% of wealth is kept for philanthropy due to the absence of the legal heir. Few have made a family trust for continuous philanthropy similar to CSR laws, binding their family for 10-15 years to donating a certain percentage of profits every year,” observes Popat.

Of those who have approached WillJini through offline modes, 60% are above 50 years of age, 30% are between 40 to 50 years of age and 10% are from the age group of 30 to 40 years.