Getting to Know Your Next Gen Donors

Last week I attended an Association of Fundraising Professionals (AFP) monthly meeting. The topic was Getting to Know Your Next Gen Donors. The content included giving trends highlighted in a recent report “The Next Generation of American Giving”. It also included a 6-person panel discussion with 2 representatives from each of the following generations: Generation X (born 1965 – 1980), Millennials or Generation Y (born 1981 – 1995) and Generation Z (born 1996 and after).

The purpose of the session was to determine if the study findings were consistent with the actual giving behaviors of each of the respective generations. The study itself revealed some interesting results. For example, fewer Americans are giving. Even though total dollars donated continues to increase, the population of givers is declining. Research comparing 2013 to 2018 giving figures showed a marked decline in donors to charities. This is true for all generations, with the exception of Baby Boomers. Giving by Boomers represents 41% of all money donated last year and 75% of Boomers self-report giving.

The session focused on some key take-aways that fundraising professionals should consider when deciding how to approach the up and coming givers.

Don’t Underestimate Generation X.

There tend to be misconceptions that Gen X is a small sliver of the population sandwiched between two giant generations (Boomers and Millennials). However, research demonstrates there are 65.6 million people in this group. Of this population about 55% give an average of $921 annually to about 3 charities. Other studies show that amount is much higher. Also, Pew Research suggests that Gen X will exceed Boomers in 2025, making the reign of Gen X as prime donors less than 10 years away. This generation is the ideal target for bequests, planned gifts and workplace giving. Smart fundraisers will begin to plan strategies accordingly now.

Donor Retention is Becoming Increasingly Important.

The same report states that first year donor retention still remains between 25%-30%. Considering the fact that the donor population is shrinking, retention becomes even more paramount. Successful fundraisers must find new ways to keep donors. One strategy discussed suggests focusing on a multi-generational approach. Involving multiple generations of donors within a family as a way of retaining donor and affinity beyond the lifespan of the first donor. Finding ways to listen to and engage family members across multiple generations (parents, heirs) may help improve retention and increase donations. Panelists at the session cited examples that supported this fact. Many mentioned learning philanthropy from their parents or grandparents. An important idea to remember is that “Fundraising is not mining or hunting’ it’s farming.” Sowing seeds across multiple generations through relationship building and cultivation is a strategy that should reap a beneficial harvest over time. Also engaging Millennials and post-Millennials today in volunteer efforts may help them become financial donors in the future.

Create a Transparent Culture

Transparency on how dollars are used remains a key concern for many donors. Successful nonprofits create a transparent culture that communicates the outcomes from the funds raised. Donors want to see this and it greatly assists fundraising effectiveness. For all generations, except Gen Z, donors use a nonprofit’s website as the main source to learn about causes they’re considering. That means your website should make it easy for donors to find answers. They want to know how funds are used and amounts that go for programs vs. overhead. Panelists also cited referrals by friends and family as key sources to learn about causes.

While the next 10 years will see Boomers as the prominent giving sector, multi-generational strategies are vital. With Generation X on the rise it’s important to build relationships with them not just as direct givers, but also as prospects for planned giving. No doubt, investing time and resources to build relationships with Millennials will have long-term benefits.