Generational Changes: Don’t Be Left Behind in the Philanthropic Shift

We’re in the midst of a massive transfer of wealth. Gen X and millennials are expected to inherit an estimated $59 trillion dollars by 2061 from their aging boomer parents and grandparents. What’s more shocking: They’re expected to give away almost half that sum.

The nonprofit world is about to experience a seismic generational shift.

But more than just a new generation, nonprofits have to understand how new generations are different. The same approach that worked with today’s donors won’t work with tomorrow’s donors.

• Out: Galas, dinners, and checks.
• In: Engagement, videos, and texting.

Changing Nonprofit Tactics

The Star Tribune reports on some of the ways nonprofits are pivoting to reach younger donors:

• Party: Urban Homeworks hosted a trivia night at a brewery and is trying to make their annual fundraiser dinner more interactive: "We've been working to make that event more appealing to younger donors ... to make it more like a party," said Development Director Paul Vliem. They also tried a hip-hop performance and an improv comedy show.
• Video: The Native Governance Center skips galas entirely and focuses on social media videos: "We try to take a different approach," said Lauren Kramer, a donor relations officer. "We're looking at content that appeals to Gen Z and millennials." Their videos brought in a $50,000 gift from a millennial donor. "We really want to reach people where they're consuming information," Kramer said. "That's been a great way to reach folks who maybe aren't thought of in traditional fundraising campaigns."
• Involved: "Millennials in particular … are really about seeing an issue and getting involved and making an impact," said Sara Lueben, director of collective giving at the Minneapolis Foundation. "They're always looking for ways to engage beyond the dollars." Lueben works with the Fourth Generation, a group of mostly millennials that pools their money to amplify their giving. In 2022 they gave $80,000 in grants.

Giving Patterns

You can see the generational shift in giving patterns, according to data from the Giving by Generation report.

Text Giving:

Giving via text message seems small, but there’s incredible growth since 2016, and there’s a clear generational bias.

• 7% - Of donors gave through text messages (up from 1% in 2016).
• 3% - Of boomers gave through text messages.
• 7% - Of Gen X gave through text messages.
• 7% - Of millennials gave through text messages.
• 13% - Of Gen Z gave through text messages.

Receptive to Text Messaging:

Likewise, all generations have become more receptive to text messages from nonprofits, with a nearly four-fold shift among generations.

• 45% - Of donors are receptive to a monthly text message from a nonprofit (up from 17% in 2016).
• 23% - Of boomers are receptive to a monthly text message from a nonprofit.
• 46% - Of Gen X are receptive to a monthly text message from a nonprofit.
• 61% - Of millennials are receptive to a monthly text message from a nonprofit.
• 80% - Of Gen Z are receptive to a monthly text message from a nonprofit.

Also, every generation except boomers also showed an increase in the likelihood of responding to a text message compared to 2016.

Online Giving:

Giving online continues to grow, with nonprofit websites actually surpassing social media as the primary motivator for donors.

• 61% - Of boomers gave online.
• 69% - Of Gen X gave online.
• 81% - Of millennials gave online.
• 76% - Of Gen Z gave online.

Those online giving rates saw double-digit growth among giving on smartphones and tablets. Also, Gen Z topped all generations with the frequency of gifts, giving 11.4 times in the past year.

QR Codes:

1 out of 10 donors has scanned a QR code to donate, but the numbers again skew by age:

• 6% of boomers have scanned a QR code to donate.
• 46% of Millennials have scanned a QR code to donate.
• 47% of Gen Z have scanned a QR code to donate.

That underlines the importance of adding QR codes to direct mail pieces to engage younger donors.

(All data from the Giving by Generation report.)

So What?

OK, what does all that mean? That’s a fair question. In summary, two things are happening:

1. Younger donors: The “kids” are getting more money and giving more. As the greatest generation and boomers age out, nonprofits will turn to Gen X, millennials, and Gen Z. That shift is happening now.
2. Digital giving: Along with that shift to younger donors is a shift to digital options—online giving, QR codes, texting, social media. It’s even impacting the typical nonprofit fundraiser, with galas and dinners having to retool or change completely. In short, young people engage differently and nonprofits need to shift if they want to reach these new generations.

‍Rally can help your nonprofit engage new generations with text messaging. See Rally in action to learn more about how it can help you connect.