PART I: BREAKING DOWN GENERATIONAL GIVING
What’s the best way to steward millennials? What motivates a baby boomer to make a contribution to a nonprofit? Who exactly is a Gen Xer? Answering these questions gives nonprofits a deeper understanding of generational giving patterns. With this knowledge, nonprofits and their development teams can tailor their communication when creating fundraising campaigns. And ultimately, steward current and prospective donors on a more personal level.
Generally speaking, each generation (and the people within each generation) acts, thinks, and feels differently from one another. With that in mind, outreach to each group should not be a one-size-fits-all effort. This two-part series will first focus on getting to know each generation and analyzing their giving patterns. Then, we’ll take a deeper dive into how nonprofits can use that information to speak to every generation of donors.
Let’s meet our donors!
Baby boomers are the leading contributors of charitable giving (for now). In 2017, they donated nearly $60 billion to nonprofits, representing 41 percent of total monetary contributions for the year. Boomers, those born between 1946 and 1964, generally follow more conventional giving patterns.
For instance, they often give to the same or similar organizations their parents did. One of their biggest motivating factors is family tradition. They grew up watching their parents and grandparents give to foundations that supported a specific cause. As a result, they now donate in a similar fashion. This essentially keeps the causes they support and charitable giving patterns consistent across generations.
Baby boomers are generally more likely to give to religious or spiritual causes, with a bulk of their donations going to their church. While they are quick to write bigger checks, they volunteer less frequently than their younger counterparts, and often focus on volunteering within their religious community.
Almost 75 percent of the boomer donor pool says that the best way to inspire younger generations is to be a role model for charitable giving. With boomers contributing nearly half of the monetary donations to nonprofits in 2017, it’s safe to say they are leading by example.
While the current generational giving data tells us that baby boomers are the largest and most generous cohort, studies show that Generation X (Gen X) is poised to outpace them soon. Why is that?
As the generation sandwiched between boomers and millennials, Gen Xers (Xers) are often overlooked in terms of their size and charitability. However, this generation comprises approximately 65.6 million individuals in the United States alone and is the third largest donor generation. More importantly, Xers are nearing what the nonprofit industry refers to as “prime giving years” (the age range of current boomers). With such a large population and increased giving, it won’t be long until Xers become the leaders of the charitable-giving pack.
Xers also tend to follow similar giving patterns as their parents. They are more interested in foundational projects and also prefer to write checks as their primary charitable contribution, though they tend to give in micro-donations ($100 every month) as opposed to giving thousands of dollars at once like Boomers.
Another area where Xers and boomers’ generational giving patterns differ is where they allocate donations. Xers are more likely to give to causes that resonate with them on a personal level and align with their values over causes based on family tradition. For some, this does equate to a religious affiliation. However, most Xers give to health, animal rights and welfare, and environmental protection causes.
Millennials, those born between 1977-1995, lean toward more blended giving patterns. They prefer to give their time more than older generations but aren’t necessarily against giving money. Like Xers, millennials typically contribute money in the form of micro-donations and are more likely to give to causes that resonate with them on a personal level.
Examples of millennial charitable giving include:
• Volunteering to rebuild homes in the neighborhood where they grew up
• Joining an LGBTQ-related organization because they are a part of the community
• Donating $10 to a friend’s personal fundraising page to help reach a $1,000 goal to purchase books for a child development program
Historically, most giving has come from older generations. However, technology is making it easier for younger generations to give. Additionally, as millennials age and find stability in their professional and personal lives, this cohort will inevitably increase their charitable giving and will become a powerful force for nonprofits.
While Generation Z is the youngest donor cohort, they have already established themselves as one of the most involved and passionate generations in the nonprofit space. They have even earned the title of “Philanthrokids” or “Philanthroteens.” In contrast to boomers and Xers, individuals in Generation Z (Gen Z) enjoy giving to many different causes, donating to several charities before they age out of this group.
Since those in Gen Z are so young, there isn’t as much data on their generational giving patterns. They don’t have as much money to give, considering their young age (those in Gen Z were born in 1996 and later). Still, they consider how to get involved, give their time, contribute small amounts of money, and make a positive difference.
Gen Z involvement spans a wide spectrum. You may see them volunteering for projects at school or making several micro-donations online. They are heavily involved in social media and often use it as a platform to raise awareness and voice opinions. Unlike older generations, Gen Z’s interests are more varied, and their charitable giving is more personally motivated.
However, what data we do have tells us that Gen Z is positioned to be major key players in the coming years.
PUTTING IT ALL TOGETHER
Personalization is no longer optional. It’s a necessary component of how brands interact with customers, and the nonprofit space is no different. It’s more important than ever for organizations to analyze generational giving patterns to engage and steward in a more targeted fashion. Neglecting the nuances of each generation and even the individuals within it could cost nonprofits precious time, money, and energy. In Part II, we’ll use the information discussed today to increase interest, engagement, and funding within these generations.
The fundamental difference between these cohorts is how they get involved and stay engaged. Once you reach these generations on a personal level, the challenge isn’t over. The next step is keeping their interest and creating a sustainable strategy for long-term giving. Case management software like Social Solutions’ Apricot 360 is an invaluable resource to help nonprofits overcome both of these challenges. They provide insights about constituents and donors, giving nonprofits a deeper understanding of who is interacting with their organization. It’s information like this that enables development teams to ideate successful fundraising campaigns while remaining innovative in the nonprofit space.
See you tomorrow for Part II!