The millennial appetite for social entrepreneurship isn’t simply youthful idealism, writes Russell Prior
Young people today are growing up in an increasingly interconnected and borderless world. This lets them explore the world outside their own and connect to the problems that surround them. In recent months, we’ve seen the proliferation of networking groups, societies and advisory ventures dedicated to impact causes.
At the same time, the next generation (next gen) is broadening the focus of their family offices and their investment and philanthropy philosophies to include social entrepreneurship and impact investing. We have seen first-hand, numerous families where the next gen is leading and organising an impact-driven strategy for the family wealth, whether through ESG or impact investing or through a hands-on approach to philanthropy.
At HSBC Private Banking, it’s inspiring to see the enthusiasm of our next gen clients for supporting causes that matter, as they look to set up and grow structures to support a strategic approach.
Our latest flagship Next Generation Programme event saw dozens of young entrepreneurs answer what ‘Motivated by Impact’ means to them. They told us that they are interested in and keen to move towards sustainability and positive impact within their own businesses.
From our experience, we know that next gen clients setting up new businesses actively talk about sustainable sourcing, production and post-life recycling of the goods they produce. A brand of entrepreneurship, investment and philanthropy that focuses on social and environmental factors as well as economic ones is becoming the norm.
This growing trend towards social impact was further confirmed in our Essence of Enterprise report, which found that one in five entrepreneurs considers social responsibility, being active in the community, or environmental responsibility as their top priority. Our research found that 24 per cent of entrepreneurs aged under 35 are motivated by social impact compared to 11 per cent of those aged over 55. A third of founders with ambitious growth plans stated that they started their ventures with the intention of creating positive social impact, suggesting that social impact is now seen as an integral part of the recipe of entrepreneurial success, on the way to achieving holistic prosperity.
This is borne out by the number of next gen clients we encounter who have already set up a philanthropic structure and strategy to drive their investment philosophy.
While you could say that this trend is simply youthful idealism, I believe it is grounded in the idea that young people have a greater understanding of and passion for what is going on in the world. Equally, technology that connects them to the global community gives them the confidence and means to make a difference. They are asking questions of their personal philosophy in deciding what actions they want to take. That might be time or expertise, it might be through simply letting their voice be heard and extending their influence through their networks, but it is most clearly permeating through their philanthropy and entrepreneurial choices.
Russell Prior is head of philanthropy at HSBC Private Banking