It seems that one of the prevalent topics in philanthropy and nonprofit fundraising is the impact of generational differences (or similarities). How will the values and characteristics of the next generation affect who they give to and how much they give? How will those values and characteristics affect how nonprofits interact with this younger generation?

The report The Next Generation of American Giving discusses not just the next generation, but four generations and their charitable giving – what makes each a target worthy of donation solicitations, how do they prefer to be asked to give, and how do they prefer to give and engage with nonprofits?

Released in March 2010, the report was commissioned by Convio, a provider of constituent engagement solutions for nonprofit organizations, and conducted by market research firm Edge Research, with technical support provided by Sea Change Strategies.

The report sought to answer what every nonprofit wants to know: How do we attract the next generations of donors without compromising current revenue from mature donors?

The short answer: The best fundraising is profoundly multi-channel. Seek ways to integrate those channels for stronger results.

The long answer is, of course, much more complicated. In Convio’s March/April 2010 online newsletter, in an article titled “Next Generation of American Donors: Changing the Art and Science of Fundraising?” by Tad Druart, Convio’s director of marketing and communications, the company’s Chief Strategy Officer Vinay Bhagat says:

This research and the decline in donor acquisition rates indicate that the marketing model needs to shift to attract the next generation of donors while supporting continued direct mail success. Charities need to move away from a solely direct response focus to a multi-channel approach with a heavier emphasis on online marketing, emerging channels such as mobile and social media, and empowering supporters to market and fundraise with and for the organization. Online marketing programs that have mostly operated as a silo must be integrated with traditional campaigns.

Here are some of the of the report’s findings.

Overview of the Generations

Mature Generation

  • Born before 1945.
  • U.S. population: 39 million
  • 79% gave to a charitable organization (other than school or place of worship) in the last 12 months.
  • Annual average total giving: $1066
  • Number of charities given to: 6.3

Boomers

  • Born 1946-1964.
  • U.S. population: 78 million
  • 67% gave to a charitable organization (other than school or place of worship) in the last 12 months.
  • Annual average total giving: $901
  • Number of charities given to: 5.2

Gen X

  • Born 1965-1980.
  • U.S. population: 62 million
  • 58% gave to a charitable organization (other than school or place of worship) in the last 12 months.
  • Annual average total giving: $796
  • Number of charities given to: 4.2

Gen Y

  • Born 1981-1991.
  • U.S. population: 51 million
  • 56% gave to a charitable organization (other than school or place of worship) in the last 12 months.
  • Annual average total giving: $341
  • Number of charities given to: 3.6

How Do the Generations Like to Give Money and Get Information?

As one would expect, giving a check by mail is the run-away most common giving method for Matures. While giving by mail is still prevalent for Boomers and Gen X, it is significantly less so than Matures. The likelihood of giving via a website increases with younger generations; for Gen X, giving via the web only slightly trails mail, but for Gen Y, the web slightly surpasses mail.

An intriguing note: All generations give at similarly high rates through donations at the check-out registers of retail stores.

Similarly, the predominant charity information channel for Matures is mail. For younger generations, the channels are more varied, encompassing a combination of e-mail, websites and social media.

One of the most interesting findings in the report notes that when looking at how charities solicit donations from those with whom they have pre-existing relationships, donors said the most appropriate form of solicitation was indirectly via a friend who asked for a donation. This finding that indirect messaging is impactful could have great implications for all those strategies that involve communication “hits” directly between the nonprofit and the donor.

Again, for communication between donors and familiar nonprofits, mail was considered acceptable by more Matures. Mail did, however, score well with younger generations as well, but it is balanced with e-mail, “indicating the importance of multi-channel appeal strategies,” the report writes.

What Triggers Giving?

According to the report authors:

Younger donors are more likely to support a charity when friends/family ask versus the charity asking them. They consider much of their giving relatively random based upon their emotional reaction to something in the media, or based upon who asks. Older donors have a well established commitment to their primary charities. They have a budget set aside for charitable giving, and know the organizations they plan to give to. This suggests that it is harder for a new charity to break in with older donors, but once you secure them, they are quite committed. Younger donors represent relatively open targets. The best way to reach them is either through inspirational stories in the media or better still,via their friends. Given that a vast majority of charitable marketing efforts today are directed towards direct donor engagement and solicitation versus stimulating peer-to-peer engagement and general media exposure, it would suggest that those marketing efforts are poorly aligned with what younger donors say motivates them to give.

To read the full report, including recommendations for “Actions You Can Take Tomorrow,” visit the Convio website.

Learn More at the MCF 2010 Annual Convening

This report and other insightful research and tools will be part of an Idea Session, “Unleashing Our Human Assets: A Fishbowl Conversation on Engaging All Generations for Change,” at the 2010 MCF Annual Convening.

- Chris Murakami Noonan, MCF communications associate