Engaging the Next Generation of Donors

By: Rick Happy, Senior Vice President and Managing Director, CCS

How to attract and engage the next generation of donors is a hot topic for many non-profit organizations…

ATTRACTING MILLENNIAL DONORS

A recent study by non-profit technology provider, Convio, titled The Next Generation of American Giving (http://my.convio.com/forms/NextGenerationWhitepaper1) cites that the majority of fundraising targets older donors, but this segment of the population is quickly shrinking. Non-profits are going to be forced to attract a new generation of donors. Millennials (also known as Generation Y) are a growing segment of the population, with more than 71 million people, compared to the 41 million Generation Xers before them.

The study also reports that Matures (born prior to 1946) give, on average, $1,066 per year to 6.3 charities, while Baby Boomers (born 1946-1964) give $901 per year to 5.2 charities. Generation X (born 1965-1980) gives $796 on average to 4.2 charities, and Millennials (born 1981-1991) give $341 to 3.6 charities. In short, the total annual charitable contributions grow with age, but the difference is primarily driven by the number of charities contributed to, rather than differences in gift size. This would suggest that if you are one of those charities successful in attracting younger donors, they can be quite profitable, especially so when you consider their lifetime potential and responsiveness towards lower cost online communications.

So, the question is: “How do non-profit organizations attract and engage Millennials?”

Consider the following recommendations to help attract young donors, extracted from the aforementioned Convio report:

1. Communicate with them on their own terms and offer a variety of ways to donate. Gen X and Millennial donors are more likely to give to a charity if the solicitation comes from a friend or family member. Since most of this solicitation comes through social media sites such as Facebook or Twitter, it is important for non-profits to disseminate their messages through these outlets that will reach and attract new supporters, increase awareness and potentially garner additional donations for the organization.

While direct mail dominates giving by Matures, the percentage of Boomers, Xs and Millennials who respond to postal mail declines steeply with each successive generation. The other generations report a variety of channels such as ecommerce, online giving, event fundraising, tributes, monthly debit programs and even mobile/text donations as important giving methods. The younger the donor, the greater the number of ways they give.

The Haiti earthquake provoked a wave of text contributions – 17% of Millennials and 14% of Gen X respondents to Convio’s survey said they made a donation to Haiti relief efforts via text message, while only 3% of both Boomer and Mature respondents reported making a donation via text. The American Red Cross launched a viral campaign to collect contributions, totaling more than $8 million only weeks following the disaster. Before Haiti, less than $1 million had been raised through texting for all charities, while $50+ million was raised for Haiti via text messages alone.

2. Encourage volunteering. Many fundraisers know the value of volunteering as a strategy for cultivating new donors. The Gen X and Millennial philanthropists are broadening the definition of philanthropy to not only financial contributions, but contributions of time. Keep this in mind when you think about looking for next gen donors. Volunteering is another strategy for bringing stakeholders into the inner circle of your organization and creating donors.

Volunteering is a platform that can provide a number of opportunities for both fundraisers and the donor. Volunteerism, specifically related to fundraising, can increase the capacity of the organization while also developing potential donors. The key to this cultivation strategy is being open to working with younger individuals as volunteers and hopefully, donors in the future. Building relationships with your volunteers of all ages and talents is essential.

3. Give back to your donors. Youth like to give back, but getting something in return helps sweeten the deal and their commitment. Tactics such as giveaways, promos and social events help move them to action, and if the cause really speaks to them, these individuals aren’t afraid to tap their social networks to promote the cause.

ENGAGING MILLENNIAL DONORS

The Millennia! Donors Report 2011 (http://millennialdonors.com/wp-content/uploads/2011/04/MD11_Report1411.pdf) by Achieve and Johnson Grossnickle and Associates (JGA) represents findings from more than 2,200 people between the ages of 20 and 40 across the U.S. about their giving habits and engagement preferences. The report found that while giving via mobile/text and social networks is an up and coming way of soliciting gifts, when it comes to requests for their time or money, Millennial donors put high value on face-to-face communication.

Key Findings:

How they want to be asked

·     91% of Millennial donors are at least somewhat likely to respond to a face-to-face request for money from a non-profit organization, with 27% being highly likely to respond to such a request. Only 8% are highly likely to respond to an e-mail request.

How they want to be involved

·     Millennial donors want to know details about the organizations they support: 86.3% want updates on programs or services, and 54.6% want information about the organization and its financial condition. 68% want information about volunteer opportunities.

·     75% of Millennial donors are at least somewhat interested in working closely with the board or organization leadership to define the direction of the organization (strategic planning) or helping the board create solutions to challenges.

·     Asked who could get them to donate to an organization, most Millennial donors say they would be likely or highly likely to give if asked by a family member (74.6%) or a friend (62.8 %). Only 37.8% would be likely or highly likely to give is asked by a coworker.

·     71.7% of Millennial donors said they’d be willing to communicate with friends and family about ways to be involved in an organization they support.

Communication preferences

·     Email is Millennial donors’ most preferred communication method, with 93% of respondents favoring it for receiving information from organizations; Facebook and print lag behind at 23.8% and 26.9%, respectively.

·     When a Millennial donor uses technology to find out about a non-profit organization, Google is the donor’s first stop, with 86.4% of respondents citing the search engine, 71.5% rely on email, and 51.2% use Facebook to find information on organizations.

SHAPE YOUR STRATEGY

In light of these findings, Achieve and JGA believe non-profit organizations need to shape a strategy now for engaging Millennial donors. Concrete steps could include:

1. Realign development staff to be more focused on face-to-face work and relationship building.

2. Work with donors who are willing to build networks with friends and family.

3. Create more specific requests for giving and volunteer opportunities, rather than general requests.

4. Develop a multichannel approach to communication and solicitation methods, recognizing that technology is a tool not a solution.

5. Plan for a long-term return on investment for relationship-building efforts with Millennial donors, rather than a quick result.

6. Align fundraising priorities for all donor audiences, but when it comes to Millennials, focus on engagement in ways traditionally reserved for donors with greater means.

7. Incorporate Millennial donors into strategic planning.

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