For the first time ever, there are now four generations of donors active in the philanthropic marketplace at the same time. Due to increased life expectancy, fundraisers are now working with a donor pool that includes representatives of the Millennial, Gen X, Boomer, and Silent/Great generations.
So what does this mean to your work in development?
Understanding generational dynamics can help us pinpoint and understand generational trends in giving. There are several recent studies that provide insight into the generations, including The Next Generation of American Giving, a 2013 study by Blackbaud and Edge Research, and Giving USA’s 2010 Spotlight issue on Charitable Giving and the Millennial Generation.
Drawing from those and other sources, I have highlighted below some key philanthropic trends of each generation.
First, there’s a reason so many charities focus on Boomers with their donor appeals – as the largest generation, they also represent the greatest portion of total giving in the USA at 43%. In contrast, the historical giving that used to flow from the Silent/Great generations appears to be slowing, making up only 26% of total giving now. However their average gift is still nearly double that of Millennials and Gen X, and they support more charities than any other age group.
While Millennials make up the smallest portion of total giving at 11%, they are the second largest generation and appear to be just getting started with their philanthropy. There are key factors within this generation that could explain their lower giving levels and point to a brighter future. Marriage has a tendency to increase giving and the majority of Millennials remain unmarried (72% in 2014). Also, education is still a priority for many Millennials and many are still paying off school loans. Yet, Millennials and Gen X will be the major donors of the future, and they are the most highly educated generations we’ve ever seen with 69% having some college experience. An Indiana University Lilly Family School of Philanthropy study found having a degree increased annual giving by about $1,900, a good sign for future giving trends.
The causes to which donors choose to give can also be impacted by generational factors. For instance, Millennials tend to put less priority on social services and environmental/conservation causes than other generations. And, both Millennials and Gen X prioritize children’s charities and human rights/international development causes higher than other generations. Likely from growing up during times of major wars and intense nationalism, Boomers and Silents/Greats place a higher priority on veteran’s causes and their more traditional upbringing makes Silents/Greats most likely to give to religion.
So what can we learn from these trends in giving?
First, it is important not to overgeneralize and to remember it is still very important to get to know the preferences of individual prospects and donors.
Across the generations, multichannel marketing and fundraising approaches are needed, but the approach varies based on the generation. For instance, realize that younger donors (Millennials and GenX) need to see the impact of their gift and may restrict their gift to those areas where they see a direct impact. Since they are less likely to give unrestricted gifts, it will be important to clarify and communicate the direct impact of gifts in tangible ways. For Boomers and Silent/Great generations, however, tailor marketing messages using emotional appeals.
Second, in anticipation of the likely transition in donors as the influence of Silents/Greats wanes and Boomers move further into a dominate role in giving, we must remember to invest in the future by implementing plans to attract younger donors now.
Gen X and Millennial donors are looking for innovations and creative solutions. Look for ways they can be involved with time as well as dollars. For Millennials, tap into their need to connect by offering ways for them to extend their fundraising and promote the organization to their family and friends. Social media is an important tool for stewardship as well as peer networking for Millennials.
It is also important make an effort to establish trust with younger donors. Millennials are slower to trust than other generations, according to the Pew Research report on Millennials in Adulthood, with just 19% of them saying “most people can be trusted,” compared to 31% of GenX, 40% of Boomers, and 37% of Silent/Great. To build trust, don’t just assign them to a volunteer task of your choosing, ask how they’d like to help. Also, network with other organizations they trust for a third-party endorsement, i.e. colleges, community groups, etc., and use other donors and supporters to help spread your message to their peers within their own networks.
The value of Millennials spreading nonprofit messages should not be overlooked. Millennials are one of the most networked generations and they value their networks. Younger generations see volunteering and spreading the word as effective ways to help nonprofits and want those efforts to be valued. In the 2012 Millennial Impact report, conducted by JGA and Achieve, only 16% of Millennials reported they would give money alone to a nonprofit, but 47% said they were inclined to give both time and money. Try to track and find ways to quantify these non-monetary efforts as well, to get a truer picture of the commitment younger donors may have to your organization.
Finally, invest in a bulk order of birthday cards, then be sure to find out the birthdays of your donors and prospects. You’ll not only get a chance to wish them happy birthday, but you may also find hints as to what matters to them when it comes to their generational giving patterns.