The 3 Keys to Future-Proofing Your Fundraising
The future’s looking bright for fundraising: There was a 4% growth in charitable giving among U.S. charities alone in 2021, and the average annual gift total increased 10% from 2020 to 2021. But the rapidly upcoming generational shift has a lot of nonprofits looking to the future.
While baby boomers make up the largest cohort of givers right now (and hold more than 50% of the country’s wealth), they’re aging out. And the generations coming up behind them have distinctly different motivations and preferences when it comes to giving.
Focusing on the traditional donor profile isn’t going to work going forward –– which is why future-proofing your fundraising by diversifying your donor pool should be the No. 1 thing on your priority list.
Old Donor, New Donor: What to Expect From the Upcoming Cohorts
Right now, the average donor in the United States is a baby boomer, and donors from this cohort make up 43% of total giving. They tend to be motivated by seeing an organization’s impact over time, and respond well to voice calls, direct mail and email. Given that they are part of a relatively homogenous cohort, they often respond well to a unified message.
The up and coming cohort, made up of Gen X and millennials, is very different. Unlike the boomers, they are much more diverse, and while they give less money as a cohort, a higher percentage of them engage in charitable giving. They also respond very differently to donation asks than boomers, and tend to be more focused on harnessing the power of the collective to make change. Most importantly, they’re set to inherit an estimated 59 trillion in wealth by 2061, and become the largest giving cohort in the country, making it very important to start including them in your donor pool now.
How to Diversify Your Donor Pool
Riding out the wave of the boomer cohort’s giving and not taking into account the younger generation’s potential is a recipe for disaster. Instead, start diversifying your donor pool by bringing the next cohort of donors in now so that you can nurture them into major givers by the time the previous cohort churns out. Here are three important considerations for diversifying your donor pool.
1. Think Generational Trends, Not Demographics
It can be tempting to make the swing to the opposite end of the spectrum and try to tailor your fundraising materials specifically to younger people, or try to speak specifically to identities and talking points that the younger cohort seems to espouse.
If you’re using trendy terms, speaking in a younger vernacular or trying to twist your mission to somehow fit into an unrelated social media fad to connect with this generation, it will not come across as being genuine or relatable. For example, using the ALS Association’s Ice Bucket Challenge and trying to associate your mission of environmental preservation with it will come across as caricature-ish to this cohort.
Instead, think about generation-wide trends and motivations, and look for opportunities for alignment with your organization’s mission. Chances are you’re already doing things that this cohort cares about and is eager to support. You just might not be making it clear to them how your mission connects with their priorities.
For instance, while the older cohorts tend to care more about institutions and giving as a tradition, younger cohorts want to see a direct connection between the values they care about, social responsibility and the tangible impact that their giving can have through your organization.
2. Reconsider Your Communication Strategy
The upcoming donor cohort grew up with very different communications technology, and, as such, has strong and defined preferences for how they like to be communicated with. The rise of robo-calls means that most people in this cohort don’t answer calls from unknown numbers, and prefer communicating via text or email. They are likely less responsive on their personal email than work email, and are generally active on social media.
Though it’s likely to be a different social media platform than the boomer cohort, which prefers Facebook. The younger cohort prefers more video-forward media, like Instagram and TikTok. They also respond less to direct mail, and especially to generalized asks.
So if your current communication strategy tends to be geared more toward the older cohort’s preferences of direct mail and voice calls as your primary means of outreach, now’s the time to start learning about effective email and social media marketing and using this approach for the younger cohort of givers.
3. Create Segmented, Responsive Outreach
Younger cohorts of givers grew up in an age of unprecedented marketing, and as such tend to be very media-savvy. Generic outreach is a great way to get marked as spam — either mentally or literally in their inboxes. Instead, create a diverse outreach strategy that works across several different channels and speaks specifically to different segments of donors.
We now have access to data technology, like fundraising AI, that allows us to know more about potential donors than ever, so make use of it. Instead of throwing out a message to all of your donors and hoping it resonates with enough of them to make it worthwhile, segment your constituents and speak directly to the motivations and circumstances specific to each segment.
Even better, use the fast response times that digital outreach gives you to make your outreach strategy responsive. You no longer have to wait six months to see if a direct mailer hit the mark. Now you have almost instant access to response statistics with display, email and social media advertising, so use them.
And if you can do segmented, responsive outreach across a few different channels — for instance, backing up a social media message with an email campaign — you’ve got a strong strategy for ongoing giving.
Effective fundraising has always been about putting the right message in front of the right person at the right time, in the right way — and that’s not going to change.
But you will need to make sure that your organization is ready to work with this up and coming cohort of donors, while still connecting with your older constituents, or you run the risk of being left behind. Future-proofing your donor pool by speaking to this new generation according to their motivations and communication preferences with a high degree of specificity and responsiveness is going to be key for developing a donor pool that’s diverse enough to remain robust in the upcoming decades.
The preceding blog was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.