Transitioning Donors: Next Gen and Baby Boomers: Intersecting Lanes…Same Destination
This post originally appeared on eJewishphilanthropy.com on October 10, 2017.
For most nonprofits, Baby Boomers comprise the most significant cohort of donors, and those giving the most significant gifts. Defined as those born between 1946 and 1964, Baby Boomers are currently the greatest economic force in giving and indeed, according to a 2015 study by Merrill Lynch, are projected to donate more than $6 trillion in the next 20 years. They are the ones leading capital and endowment campaigns, writing meaningful annual checks, chairing and attending fundraising events, and sponsoring programs. They are typically well known to the organizations where they have directed their support, and have been involved for quite some time.
As nonprofits look to future advancement and growth, eyes naturally turn towards the emerging generation of leaders and donors. Chances are, many of these potential supporters are younger – Generation X’ers or even Millennials. These new prospects might be current donors who need to be developed further or, more likely, new to the organization, to be guided into the role of lead and major donor. In today’s competitive philanthropic environment, the key to success is speaking simultaneously to multiple cohorts at once; staying consistent in messaging but tailoring and projecting that message across diverse platforms and channels.
Baby Boomers account for roughly one-third of all adults who give, and contribute 43 percent of all the dollars donated, yet, the next generation is rapidly emerging. According to Blackbaud, more than $59 trillion will pass into the hands of the next generation, men and women age 35-55, by 2050. This new pool of wealthy individuals, who include heirs to family fortune, successful entrepreneurs, and (of course) matured technology whiz kids, will control between $20 trillion and $30 trillion in prospective charitable giving.
There have been many articles published and studies compiled that examine the differences between these generations. Indeed, we too have written about Generation X and differences in giving habits and priorities. Emerging major donors often have different relationships with technology, preferences in communication, and even the types of causes that they are likely to champion. For instance, studies show that younger generations do not stick with the same causes out of habit or historical connection, but rather seek out organizations which achieve results and where they feel a personal connection.
Yet, while the marketplace will continue to change, and despite these clear generational shifts, there are also many new trends that will both resonate with older donors and effectively attract new ones.
Trends that Resonate:
Importance of results and impact: There has been a shift in the philanthropic landscape where donors are not simply making annual gifts out of habit and due to historic connection, but rather are keenly looking at the results achieved by their dollars and the impact of their gifts. Younger donors especially are looking to see that their support will have a measurable effect on a program, project or event. According to Blackbaud’s 2013 report “The Next Generation of American Giving,” younger donors are looking for transparency and are results-focused. However, educating donors of any age about the effectiveness of their gift can increase their likelihood of giving.
Mobile accessibility and good website design: According to the 2017 Global Trends in Giving Report, Millennials, Gen X’ers and Baby Boomers all prefer to give online – 62%, 59% and 59% respectively. Therefore, good website design and accessibility are essential tools for any nonprofit. Keeping up with technology trends will not only be a benefit to attract younger donors, but older generations as well.
Solid storytelling: Nonprofit Tech for Good also reported that 91% of overall donors say that positive emotions such as hope and empathy are motivating factors for giving. The rise of storytelling and narratives spurred by social media will resonate with donors, regardless of their age or generation.
There are certainly trends and technological advances that will resonate more with younger audiences. For example, younger donors respond more from peer-to-peer fundraising (30% of Millennials as compared to 11% of Baby Boomers). However, when it comes to soliciting major gifts, tried and true methods still win the day.
Same overall best practices:
Direct contact: As the old but ever relevant adage goes, “People give to People,” and anyone active in the fundraising or resource development world knows this to be true. For all of the technological advances and communication trends, there is no substitute for building strong and meaningful relationships through sustained personal contact.
Communications: 71% of Baby Boomers use social networking, according to a recent study by Google, while only 11% of Generation Xers prefer to give by direct mail. Solid communication across modalities, using a multichannel communication strategy, will engage donors and prospects of all ages. Messages are reinforced when seen through a variety of vehicles. Using integrated print, social media, email, and direct contact is still the best means of getting a message across and reaching donors of all ages.
Gratitude: With an overall gift retention rate today of just 47%, according to CauseVox, thanking donors is a simple, but tried and true way to encourage gift renewal. Just as donors want to see impact, they all want to feel that their contribution is appreciated. Thanking donors is essential part of any fundraising plan. While seemingly intuitive, this is a step that is all too often missed or minimized.
While working recently with an organization whose campaign had entered the completion phase, we guided the intersection of generations and approaches, and the leaders saw firsthand the need and importance of crossing lines and learning new strategies. A team was assembled to be part of the completion activity.
As follow up, coaching, training, and communication advanced with this group of active campaign leaders, they share varied, but effective, ways of approaching prospective donors – some generation-specific and others “universal” – all reflecting both best practices and new contemporary methodologies.
Through this exercise, they realized that their strategies were mostly geared toward older donors. The message and donors asks were based on older models and were effective for the first part of the campaign, but did not get them to their goal. After a Generation X leader spoke up, they were able to reconfigure their message away from a straightforward ask to one that showed impact, emphasizing the value of each gift. This shift did not alienate older donors and encouraged substantial gifts from 40-50 year olds. They are achieving their goals and we are learning, in real time, how new strategies can and do work.
While there is no doubt that each generation has different needs and expectations when it comes to supporting charitable organizations, it is important to remember that in many ways, donors are often more alike than different. Thus they should not be assigned to separate “lanes” and considered different, without the possibility of intersection.
The mechanics of giving, primarily annual giving, may change in the years to come, as the accessibility and popularity of online and mobile giving continue to rise. However, the why behind the gift does not vary as much.
Organizations whose focus is on creating deeper personal relationships with donors will create meaningful and sustainable support, regardless of the donor’s age. Though many will tout the latest and newest ideas and innovations in philanthropy, there is no substitute for personal connections. Nonprofit leaders who focus on creating a compelling reason for giving, and offer unique value for their communities, will often fare better than those chasing the latest trends.