Are You Ready for the Next-Generation Donors?
Many nonprofit charities are starting to see changes in the donor composition of their fundraising programs. This is due in large part to the huge generational shifts occurring in the U.S. population today. As next-generation donors become the dominant givers, their needs and behaviors also have a greater impact on the giving process. Traditional direct response fundraising methods and assumptions will need to adjust to meet donors’ needs.
How well prepared is your fundraising program to engage the next generation of donors?
Generational Impact on Giving
For many fundraising programs, the largest cohort and most generous donor segment has been composed of traditional retirees, or Matures, who help to build dependable and growing fundraising revenue year over year. But as that generation enters the sunset years, Baby Boomers and Gen Xers are now driving more of charitable giving, and are predicted to dominate giving for several years to come. According to Blackbaud Institute’s “2017 Charitable Giving Report,” the average U.S donor is 64 years old, which is right in the middle of the Boomer cohort and the bullseye of the target audience for most charities. In addition, Gen Xers are now entering their 50s and prime giving years, also making them a desirable audience to cultivate for many years to come.
Figure 1: Blackbaud Institute 2018 Next Generation of American Giving, referencing the American Community Survey 2016, US Census Bureau for 2018 U.S. Population estimates
Further adding to the seismic changes in the philanthropy landscape, Millennials are projected to overtake Boomers as America’s largest generation by 2019, according to the Pew Research Center.
With this expected growth, some fundraisers are betting on Millennials to take over as the leading donor segment in the short term. But industry opinion is mixed on how much focus to put on Millennials today as they enter their adult years and the responsibilities of home, career and family consume their budgets. According to Blackbaud’s “2018 The Next Generation of American Giving” report, Boomers and Gen Xers contribute 41 percent and 23 percent of total giving, respectively, compared to 14 percent by Millennials. It would appear that Millennials’ giving dominance may be some years away.
What Donors Want: More Control
Previous generations of donors made it easy for nonprofit charities to rely on mass marketing, direct mail programs and brand loyalty to meet their campaign goals. But those donors have been surpassed by new generations of philanthropists who are rewriting the rules of fundraising. Today’s modern donors see giving in much broader terms than their predecessors. They like to volunteer, recruit others to support the cause and use social media and online tools to make their gifts.
Donors are also seeking more control in their philanthropy, according to a new report by Cohort3, a fundraising consulting company that commissioned the research. Among its findings, donors across Boomer, Gen X and Millennial audiences are more likely to drive the giving process than previous generations, who were more passive in their relationships with the charitable causes they supported. Donors now research their charities, engage their personal networks in their decisioning and use more channels to learn about and support their preferred causes.
The next generations of donors have different expectations and attitudes about charitable giving. To win their donations, nonprofits will need to incorporate the intentions and known giving behaviors of these generations into their planning.
Get to Know Your Donors
The first step toward reshaping your fundraising program to engage the next generation of donors is to better understand your current donors. Even simple steps can yield valuable data that leads to actionable insights:
- Overlay Age Data—What is the generational makeup of your online, direct mail and social audiences today? How have donor age levels changed over the past decade? Align the data with generational definitions and cohort research to learn more about donors’ preferences and attitudes by age group.
- Ask Donors—Run an online survey, host in-person and online focus groups, and contact donors by phone to collect valuable feedback about their motivations in supporting your cause. By learning how donors feel about your charity, what they know about the organization, which other charities they give to and why they give, you can create better giving experiences and tune your communications to respond to donors’ interests.
- Leverage Current Research—Dive into donor reports mentioned above, and search online for articles about generational impact on U.S. charitable giving. Use industry research to begin defining your program’s approach to cultivating the next generation of donors.
Tune Up Your Website, Social Profile and Search
New generations of donors share a common pursuit. More so than their predecessors, they seek out information about the charities they support, primarily by visiting organization websites, according to Blackbaud’s “The Next Generation of American Giving” report. Donors want to know why their gift is needed, see how their donation will make an impact and have transparency into the organization’s finances and operations. Donors also use search and social media to study their charities of choice, before and after donating. Smart fundraisers will want to take a fresh look at their organization’s website and digital and social profiles. Make sure today’s modern donor can easily find the information, facts and figures they require to justify investing in your organization.
Donor behavior is changing in significant ways, as new generations of donors take more control of the giving process. The causes that earn more fundraising dollars will be the ones that recognize what motivates donors to give and adapt their fundraising methods to meet the changing needs of donors.
Eve Smith is senior strategy director in Merkle’s Nonprofit Group and an experienced fundraiser with over 18 years of nonprofit direct response marketing expertise. Eve brings extensive knowledge and practice to Merkle’s nonprofit clients, including integrated strategy, omni-channel fundraising and marketing, and program innovation. She specializes in scaling up already-successful fundraising programs to raise more funds and crafting new programs that leverage advocacy, peer-to-peer fundraising and social giving to bring in new revenue. At Merkle, her clients have included major national health charities, international relief and faith-based organizations, animal welfare nonprofits, among others. Before joining Merkle, Eve was lead consultant to national cause-based nonprofits and worked with leading nonprofits and foundations to advance their online marketing and fundraising programs.