Talkin’ ‘Bout My Generation: How do different generations approach their charitable giving?

Posted on by Allison Trimarco, Dodge Board Leadership Series Facilitator

The differences between generations has been a popular topic in recent years – and with good reason. The five adult generations currently living in America (yep, it’s five – people born in 1996 are now adults, so we’ve added Generation Z to the mix) have had significantly different life experiences, and this has influenced their values, behavior, and preferences.

Since 2010, The Blackbaud Institute has periodically produced The Next Generation of American Giving, a report that looks at how different generations approach philanthropy. When we offer fundraising training sessions at the Dodge Board Leadership Series, this topic always generates heated discussion. Why do the fundraising strategies that have worked well for Matures and Baby Boomers seem to leave Generation X and Millennials cold? Is it better to ask people through email or printed letters or social media? Is it appropriate to text a donor, or send them an Instagram Direct Message?

The answers to these questions vary widely depending on someone’s age. If you’re interested in the details on this topic, you can download the entire Next Generation of American Giving report for free. For me, the most useful data illustrates how different generations are currently participating in philanthropy, and predicts how that might change five or ten years from now.

  • Baby Boomers (born between 1946 and 1964) remain the most generous generation today: 75% of them report making charitable gifts, with an average total of $1,062 a year. Overall, the average American donor is 64 years old, which is right in the middle of the Baby Boomer group. While this group will likely power significant philanthropy for another five years at least, we anticipate a decline in their giving power beyond 2025; more of them will be 70 or older, and likely face rising health care costs.
  • While we sometimes see criticism in the media about the lack of Millennial giving, the truth of the matter is that adults in this age group do give…but not at the rate of other generations. Statistics vary, but Millennials (born between 1981 and 1995) represent about 25% of the population, and their gifts account for about 14% of individual giving. Their often-strained financial circumstances (e.g. student loan debt, stagnant wages, high housing costs) means that they are not moving up the donor pyramid (see image below) and becoming larger donors in the way nonprofits might hope. Many organizations have invested strongly in attracting the attention of this generation, and this can be good for advocacy and event attendance. But it could be a very long while before Millennials begin to give at the rate we see from older generations.

Donor Pyramid

Is there any good news? Absolutely!

  • I am a proud member of the oft-forgotten Generation X (born between 1965 and 1980), and I am truly thrilled to tell you that statistics indicate that we are the immediate future of philanthropy! We are approaching our prime giving years, and it shows – the average amount given to charity by a Gen X-er was $732 in 2013, but it’s up to $921 in 2018. More than half of us give every year, and we are also increasingly likely to volunteer. While conventional wisdom has said that Gen X is too small to make a difference, the Census reports that there are only two million more Millennials than Gen X-ers…and there are already 7 million more Gen X donors. If you’re thinking about the donors who will power your organization five to fifteen years from now, place your attention squarely on people in their 40s and 50s today.
  • There is also good news about the youngest adults in America. The oldest members of Generation Z (those born since 1996) are now adults. They are still a small cohort of adults, of course, but 44% of them are already giving, creating more than $3 billion a year of philanthropy. It looks like our sector’s efforts to encourage young people to be involved in volunteerism from a young age is paying dividends, creating a generation of adults who care about their communities and aren’t afraid to act on that.

So what should we do with this information? As ever, your best strategy is always dependent on your individual circumstances, but most nonprofits can use these generational trends to sharpen their fundraising approach.

  1. Understand your current and potential donor base. Who is giving to your organization right now? Do you have a strategy for building relationships with younger donors? By “younger,” I mean people in their 40s and 50s.
  1. Differences in communication preferences between generations is one of the biggest challenges to the field today. If you have donors from multiple generations, consider how each group might prefer a different fundraising approach. As you think about this, remember: the way you prefer to receive communications may not represent your donors’ preferences. I have seen board members in their eighties object to nonprofits running social media campaigns, based solely on their own dislike of the medium. And I’ve seen board and staff members in their thirties cut direct mail programs, even though the majority of the organization’s donor base is made up of Matures and Baby Boomers who still prefer giving through direct mail. Leave your own preferences aside, and approach donors in ways that feel comfortable for them.
  1. If you don’t already have a recurring monthly giving program, now is a great time to launch one. This is our most accessible strategy for building loyalty among Gen X and Millennial donors, and will also increase your average gift size without making donors feel that they are giving beyond their means. If you’re not sure how to get started, Network for Good has an introductory guide that will help you build your strategy.

And most importantly – remember that whatever generations you find in your donor base, the most important thing is to convey the impact of their gifts. All donors want to know that their gifts were well-used and made a difference. Regardless of whether you communicate this online, in the mail, or in person, your gratitude strengthens those relationships and keep those donors close to you.

The statistics in this blog are all drawn from The Next Generation of American Giving 2018, produced by The BlackBaud Institute.

Allison Trimarco is the founder and principal of Creative Capacity (www.creativecapacity.net), a consulting firm that collaborates with nonprofits to find creative solutions to management challenges. She is also affiliated with The Nonprofit Center at La Salle University’s School of Business (www.lasallenonprofitcenter.org).

 

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