Check out my published white paper!!

X + Y = $

Generational Philanthropy

By Renee C. Herrell, M.A., CFRE

(published as a white paper in the July Compass Group Newsletter)

So what is Generational Philanthropy? Generational Philanthropy simply refers to the way each generation engages in donating their time, treasure and talent. As fundraisers, it is important for us to understand how and why each generation donates, so that we can approach them through the proper vehicles and build long-lasting, loyal relationships.

In this article, we will take a look at the different characteristics and giving habits for Generation X and Y, as well as strategies on how to effectively engage these younger generations as donors. Research shows that over half of Baby Boomer and Traditionalist donors first learned about their top charity in their 30’s[1], so a strong case can be made for engaging Generation X and Y now to build major donors for the future.

 

Generation X

Generation X has a population of 62 million individuals born between 1966 and 1980 and makes up 24% of the total population[2]. Defining people and events in the lives of these individuals include the collapse of the Soviet Union, Reaganomics, corporate downsizing, punk rock, Iranian hostage crisis, space shuttle Challenger tragedy, O.J. Simpson trial, video games, MTV, Rodney King riots, and computers in school.

Generational characteristics include skeptical, pragmatic, adaptable, self-reliant, informal, techno-literate, diversity-minded, and focused on today[3]. Gen X thinks their generation is unique because of their technology use, work ethic, conservative and traditional views, intelligence, and respectfulness[4].

Gen Xers makes up 32% of the current work population with 51 million workers[5]. They are a well-educated group, holding more degrees than their older counterparts. They are problem solvers, entrepreneurial, and known for taking risks. Gen Xers place great importance in finding a balance between work and home; choosing to “work to live,” as opposed “live to work”[6].

Over half (58%) of this population makes donations comprising almost 36 million donors. The average Gen Xer contributes $796 annually for an estimated total of $28.6 billion per year[1]. Gen X is first engaged with nonprofits (in priority order):

  • By making a direct donation
  • Visiting an organization’s website
  • Volunteering, supporting a friend participating in a charity walk or run or promoting the charity online.

Of all the generations, they donate the most through websites. Gen X philanthropists are often moved to donate after hearing inspirational stories from a nonprofit regardless of their past support.

They first learn about their top charities (in priority order):

  • Through mainstream media
  • Word-of-mouth
  • Mail
  • Peer-to-peer events
  • Work
  • Product purchase[7].

Almost a third of Gen Xers first learned about their top charity during their childhood[8]. Charities with whom they had pre-existing relationships, Gen X donors said the most appropriate form of solicitation was via a friend, followed by a letter mailed from the charity, then an email from the charity, and lastly a message on Facebook from the charity[9].

Gen Xers tend to give the same amount to their top charity every year, typically for seven years. Their giving is influenced by their friends and family and sometimes based on “heart string” stories that move them rather than a sense of loyalty to a particular cause. Of all the generations, they donate the most through websites, making them more of a viral donor and harder to recruit and build a personal relationship with.

 

 

Generation Y

Generation Y is the youngest generation born 1981 to present with a population of 83 million individuals in the United States[10]. Defining events and people in the lives of Gen Y include 9-11, Iraq conflict, Enron scandal, emerging countries and global economy, the Columbine shooting, President Obama, American Idol, iPods, reality television, Mark Zuckerberg, and the new mainstream reality of social networking. Generational characteristics include being technology savvy, connected 24/7, optimistic, confident, comfortably self-reliant, entrepreneurial, success driven, inclusive, and environmentally minded[11]. Gen Yers think their generation is unique because of their technology use, music, pop culture, liberal and tolerant views, intelligence, and their clothes[12].

They are digital natives and fully immersed in the online world (i.e., Facebook, YouTube, Twitter, blogs). Not surprisingly, when staying in touch with friends and colleagues, Gen Y uses email most frequently, followed by Facebook and texting[13].

It is a generation of strong-willed, passionate, and optimistic youth. They have great expectations and are known for expecting (and demanding) to get what they want.

They are more ethnically and racially diverse than older adults[14]. They’re less religious, less likely to have served in the military, and are on track to become the most educated generation in American history[15].

Gen Y is the fastest growing population in the U.S. workforce. With 40 million workers, they constitute 25% of all workers[16].

Generation Y is the youngest group of philanthropists, but an increasingly active group. Over half (56%) of the population are donors. The average Gen Y individual contributes $341 annually for an estimated total generation contribution of $9.7 billion per year. These younger donors plan to increase their charitable contributions to their top charity next year[17]. In 2009, nearly 15% of Gen Yers gave at least one gift of $1,000 or more[1].

They first learn about their top charities through:

  • Mainstream media
  • Word-of-mouth
  • School
  • Peer-to-peer events[18]

Charities with whom they had pre-existing relationships, Gen Y donors said the most appropriate form of solicitation was via a friend, followed by an email from the charity, message on Facebook from the charity and lastly, a text from the charity[19]. As philanthropists, they value volunteering as well as financial giving. Members of Generation Y are more likely than any other generation to cite the “desire to make the world a better place to live” as a key motivation for their philanthropic giving[20].

Gen Y is techno-savvy and responds positively to building a relationship with a nonprofit online. Nonprofits can utilize low cost online relationship-building tools like email, websites, blogs, Facebook, and Twitter to engage these younger donors. Not surprisingly, direct mail solicitations have little to no impact. Not only are Gen Yers willing to donate their own funds, they are more likely than other generations to fundraise for their favorite causes and ask for donations from their peers. They donate through a variety of channels: online, in person, and by check. It behooves nonprofits to understand the ways that Gen Yers give now, as the generation will probably continue to use the same giving channels as they age.

 

Six Steps to Engage Young Donors

Despite their younger age, Gen X and Y desire to donate to nonprofits because they want to leave a mark now in order to leave an impact. Often they become initially engaged because of a personal experience but ultimately, they want to make philanthropy a part of the way they live. So how do you effectively engage the next generation? Here are six steps to engage young donors:

1. Host events for young professionals

Events are a popular way to engage young people because they enjoy socializing with their peers.There are a few easy steps to creating a young professionals’ event.

  1. Choose one evening mid-week to host your event after work hours.
  2. 2.     Select a location. Your organization is ideal if you have space. Otherwise, choose cost effective, up and coming or trendy eating/drinking establishment.
  3. 3.     Choose an enticing focus for the event like art or music that will attract a younger crowd.
  4. Determine a minimal entrance fee between $5-$15.
  5. Spread the word to Gen X and Yers using social media and other media outlets.
  6. Provide tasty drinks and food.

Lastly, and most importantly, provide event attendees an opportunity to make a donation, become a member or get further involved with your organization.

 

2. Recruit for board & committee roles

Volunteering is a form of donating time and human resources. This is a favorable way to give for many young people, as they tend to have more time and fewer funds. Diversity on boards is highly desired and often hard to obtain. Did you know that diversity can include age as well? Look to recruit board members who are under the age of 40. If the board is hesitant to recruit younger members, invite younger individuals to join a board committee first allowing you to groom them and see how they might serve in a larger volunteer capacity in the future.

3. Engage in multi-channel communication

Having a multi-channel communication approach is an effective way to reach younger people. Social media is another tool to cultivate and stay in touch with young donors. Utilize social media outlets to tell and share stories from organization. Tell stories that demonstrate the success of your programs – such as stories about individuals who were positively affected by your organization. Post pictures and include quotes.

4. Ask young professionals to engage their peers

Young people like to fundraise for their personal causes. Often your organization will need an activity for your young fundraisers to focus their efforts around a walk or a run. Ideally you would be able to utilize an established event instead of creating a new one.Provide these young fundraisers with tips and tools for raising money, sample solicitation letters and thank you letters, individual online fundraising pages, and one-on-one training in fundraising. Let them lead the process as much as possible and be ambassadors for your organization. Your investment in their efforts will pay off in the long run.

5. Offer tiered membership structures

Offer a membership rate that is affordable to Gen X and Y like $25 or $35/year. Offer the same benefits to the younger folks as they would receive at a higher level membership. The idea behind membership is repeat customers. Your Gen X and Y to be visiting your organization on a regular basis.  This also means you need to have events and activities that will be attractive to their age group.

 

6. Provide philanthropic resources & trainings

Host a philanthropic training for your up and coming philanthropists to provide them with resources and information to help them enter this new role. Believe it or not, many young people are eager to learn how to become philanthropic. The training can be similar in style to hosting a planned giving luncheon or tea for your older donors. Provide the next generation of philanthropists with resources on philanthropy, such as information on developing a personal giving plan or how to research causes who need help. Your organization could provide a venue for training on multi-generational philanthropy or share practices on creating a personal giving plan. Ask your older donors if they have children or grandchildren who would like to learn more about philanthropy. This will develop lifelong family giving to your organization and a continued investment across multiple generations.

 

A solid understanding of the characteristics and defining moments in the lives of each generation will help you build a more solid relationship with your donors of all ages. While the generational preferences are helpful in building strategies to approach younger donors, they are not the rule. Each individual is unique in his or her own giving philosophy and method.

Engaging Younger Donors Checklist:

ü  Take the time to engage young individuals now as donors. Their gifts may be small, but their lifetime giving has great potential.

ü  Offer different opportunities for the younger generations to engage with your nonprofit through events, volunteering, and membership.

ü  Utilize your current donors to help make peer-to-peer asks.


[1] Bhagat, Vinay, Pam Loeb and Mark Rovner. The Next Generation of American Giving, A Study on the Multichannel Preferences and Charitable Habits of Generation Y, Generation X, Baby Boomers and Matures. March 2010.

[2] United States Census Bureau, 2006-2008 American Community Survey, Population Estimates (July 1, 2008).

[3] Deloitte. Gen Y: Powerhouse of the Global Economy. 2009.

[4] Pew Research Center. Millenials: A Portrait of Generation Next. February 2010

[5] AARP. Leading a Multigenerational Workforce. 2011.

[6] Lancaster & Stillman, 2003

[7] Bhagat, Vinay, Pam Loeb and Mark Rovner. The Next Generation of American Giving, A Study on the Multichannel Preferences and Charitable Habits of Generation Y, Generation X, Baby Boomers and Matures. March 2010.

[8] Bhagat, Vinay, Pam Loeb and Mark Rovner. The Next Generation of American Giving, A Study on the Multichannel Preferences and Charitable Habits of Generation Y, Generation X, Baby Boomers and Matures. March 2010.

[9] Bhagat, Vinay, Pam Loeb and Mark Rovner. The Next Generation of American Giving, A Study on the Multichannel Preferences and Charitable Habits of Generation Y, Generation X, Baby Boomers and Matures. March 2010.

[10] United States Census Bureau, 2006-2008 American Community Survey, Population Estimates (July 1, 2008).

[11] Deloitte. Gen Y: Powerhouse of the Global Economy. 2009.

[12] Pew Research Center. Millenials: A Portrait of Generation Next. February 2010

[13] Achieve and Johnson Grossnickle Associates (JGA). 2010 Millennial Donor Study. 2010

[14] Pew Research Center. December 2009 Current Population Survey (CPS)

[15] Pew Research Center. Millenials: A Portrait of Generation Next. February 2010

[16] AARP. Leading a Multigenerational Workforce. 2011.

[17] Bhagat, Vinay, Pam Loeb and Mark Rovner. The Next Generation of American Giving, A Study on the Multichannel Preferences and Charitable Habits of Generation Y, Generation X, Baby Boomers and Matures. March 2010.

[18] Bhagat, Vinay, Pam Loeb and Mark Rovner. The Next Generation of American Giving, A Study on the Multichannel Preferences and Charitable Habits of Generation Y, Generation X, Baby Boomers and Matures. March 2010.

[19] Bhagat, Vinay, Pam Loeb and Mark Rovner. The Next Generation of American Giving, A Study on the Multichannel Preferences and Charitable Habits of Generation Y, Generation X, Baby Boomers and Matures. March 2010.

[20] Report by the Center on Philanthropy at Indiana University in a study funded by Campbell & Company. 2008.


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