Generation Z, the generation following millennials, was born between the mid-1990s and the early 2010s (Dimock, 2019). Its oldest members are now entering the adult and professional worlds, raising important questions about how Gen Zers understand and experience personal finance and engage in philanthropy — and what implications this has for the nonprofit sector.

Gen Z has come of age affected by various forces, including terrorism, climate change, wage stagnation, and the double pandemic of COVID-19 and heightened attention to systemic racism. While older generations passed on the message of the American Dream — follow your passions, follow your heart, and do whatever you are led to do — that message has not naturally aligned with their lived experiences.

Fortunately, as Sneha Kashyap Thakur noted in an interview with VoyageAustin (2022), “The good news is that the next-gen is anything but apathetic about making changes, whether through philanthropy or some other means” (para. 20). As they increasingly build assets and engage in philanthropy, Gen Z’s habits will reflect their experience.

Gen Z’s Financial Reality is an Everyday Struggle

Young Americans face many financial challenges, but chief among them is the cost of living weighed against today’s rate of pay. While wages have increased since 1970, they have not come close to keeping pace with the significant increase in the cost of goods over the last 50 years. According to research from ConsumerAffairs Research Team (2023):

  • Workers in their twenties today have 86% less purchasing power than baby boomers did at the same age.
  • “The cost of public and private school tuition has increased by 310% and 245%, respectively, since the 1970s” (para. 1).
  • “Gen Zers and millennials are paying 57% more per gallon of gas than baby boomers did in their 20s” (para. 1).

Gen Z operates with high levels of anxiety and worry caused by money-related challenges. In pursuit of economic security, this generation has pursued higher education with student loan debt — they are more likely to have loans (36% of older Gen Zers versus 31% of millennials) and to hold higher balances (Gen Zer’s median debt value is 14% higher than that of millennials) (Hernández Kent & Ricketts, 2022). According to a 2023 survey from Bankrate, 52% of Gen Zers report that money worries negatively impact their mental health and that their most significant financial concern is being able to pay for everyday expenses (Bennett).

The Deloitte Global 2022 Gen Z and Millennial Survey also shows that about one-third of Gen Z respondents worry about the cost of living above all other concerns, 46% live paycheck to paycheck, and over a quarter doubt they’ll retire comfortably. A further Experian survey (2023) found that 61% of Gen Zers say they are “somewhat or very financially dependent” on their parents (Roman, para. 4). Taken together, this data underscores how Gen Z’s philanthropic preferences are likely to be shaped by an economic reality that is starkly different than the messaging of “you can do anything” and “follow your dreams.”

While Gen Z may be deeply linked to charitable causes and interested in giving, ability is undeniably connected to financial capacity. As Bankrate (2023) notes, “The high rate of dependence on parents and the stress of paying for everyday living expenses reveal a generation grappling with economic challenges that undermine their financial security. Gen Z’s journey to financial independence will require more opportunities for well-paid work, affordable housing options and accessible financial education” (Bennett, para. 25). It is hard to be generous when financial stress is ever present.

Read the full article about Gen Z philanthropy by Aimée Laramore, with research contributions from Crisol Beliz at Dorothy A. Johnson Center .