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For the past five years, Nexus has bridged communities of wealth and social entrepreneurship and given birth to a movement that has spread all over the globe. Why has it been so successful? To better understand the innovation we have brought to the world and the financial services sector please review our new white paper:
There are some big changes coming to the financial services industry. A body of new “affluenza” research, concerning the psychological pitfalls of excessive wealth ownership, has inspired many in the wealth management industry to consider the mental health of their client family offspring for the first time. The studies demonstrate how wealth may isolate people, foster a sense of entitlement and lead to unscrupulous and careless behavior. Many observe, “Those who waste money, also lose money.”
While banks lose some clients every year, the need to worry about next gen inheritors is greater now than ever before. As baby boomers pass away younger generations are inheriting in greater numbers. And, 90% of inheritors switch financial advisors as soon as they gain control over their money.
This new affluenza research together with an industry wide panic about next gen client retention has created a perfect storm to unite the finance industry and the youth philanthropy movement. If we can prevent affluenza through empathy education, then could we inspire a new wave of giving? The report examines the experience of having wealth, the science behind what motivates people to donate philanthropically, and the question of how to best support and enable next generation philanthropic leaders.
The paper proposes that, instead of focusing on the technicalities of philanthropy, focusing on the social and emotional development behind philanthropy is the most effective approach to not only increase generosity, but also to advance the well-being of all involved.
This report shares that while various studies indicate that this next generation of leaders is one of the most culturally diverse, socially collaborative and value-driven groups in history, being a person of wealth often can be an isolating experience. As a result, the sense of connection and social skill development that often fuels giving may be limited for young people of wealth.
Citing research from Dr. Dacher Keltner of University of California-Berkeley, the report explains how such isolation can result in a certain lack of social skills, such as empathy and compassion, which directly interferes with the natural motivations of giving. As Dr. Paul Piff says “If wealth, both socially and psychologically, creates an island that leaves people removed from others, then contributing inroads to that island can trigger these basic empathic processes that would otherwise not be engaged.”
This report explores the science behind this statement, how this relates to the next-gen and specifically philanthropy. It explores how family members, community members, and service providers can shift the current culture around philanthropy and philanthropists to focus more on the internal needs of next generation family members.
There are various organizations today, including Nexus, that offer programs and services to support the personal development of young wealth-holders in order to help them build their communities and, ultimately, their philanthropic impact.
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