Philanthropy is undergoing significant changes, driven by societal shifts and an unprecedented wealth transfer. Cerulli Associates estimates that $84.4 trillion will be transferred by 2045, with $11.9 trillion directed to charities. This shift is expected to reshape philanthropy as new donors emerge from diverse backgrounds.
Despite these changes, new donors face similar obstacles as their predecessors. Psychological barriers often hinder giving, reducing its impact and enjoyment. Joseph Brooks of Arabella Advisors emphasizes the importance of addressing these barriers early to achieve desired philanthropic outcomes.
A report by Arabella Advisors and the National Center for Family Philanthropy identifies three main challenges: too many choices, feeling unprepared to make decisions, and lack of time.
The abundance of options in charitable giving can lead to decision paralysis. Angie O’Leary from RBC Wealth Management–U.S. notes that many clients feel stressed about choosing the right vehicle or organization due to fear of making a wrong decision.
Feeling unprepared is another barrier, especially for new donors who may experience imposter syndrome despite being capable. Gathering excessive information can paradoxically decrease confidence in decision-making.
Time constraints also pose a challenge as donors juggle personal and professional responsibilities. Liz Jacovino from RBC Wealth Management–U.S. highlights this issue for women and next-generation donors balancing multiple roles.
To overcome these hurdles, it is crucial to recognize them and implement strategies such as setting priorities, simplifying processes, reframing perspectives on success and risk, and seeking expert guidance.
Bill Ringham from RBC Wealth Management–U.S. suggests that families with wealth benefit from integrated advisory teams that provide specialized expertise supporting family goals.
RBC Wealth Management clarifies that they do not provide legal or tax advice and are not affiliated with Arabella Advisors.