Next Gen Donors: How Will They Transform Giving?

Originally posted on STL Nonprofit News Blog
April 11, 2019

About two years ago, I spoke to a group of independent school fundraising professionals, members of ISSL, the Independent Schools of St. Louis. When I asked what was keeping ISSL development directors up at night, the answer came back: “Where will the next generation of donors come from?”

I don’t know if they were already experiencing (or just fearing) decreases in giving and engagement at their schools. But the angst was palpable and real.

So, I dug into understanding the needs and behaviors of Millennials and Gen X donors (collectively, Next Gen) and shared my findings. At about the same time, significant and transformational research was being completed on Next Gen donors by Sharna Goldseker and Michael Moody. I had the good fortune to hear Moody speak last summer in Indianapolis. Goldseker and Moody’s new book, “Generation Impact: How Next Gen Donors are Revolutionizing Giving,” presents all the data but also suggests what we do with that data to engage, nurture and encourage Next Gen donors as they reshape major giving.

How do Next Gen donors want to revolutionize giving?

First, let these facts sink in:

· Millennials (ages 22-38) and Gen Xers (ages 39-54) represent 141.4 million people
· They now make 23.5% of all gifts in the U.S.
· The percentage of those who volunteer ranges from 25% to 29%
· Overall, $59 trillion will be transferred across generations between 2007 and 2061 in the U.S., including $27 trillion in charity

Next Gen donors are driven by values; they won’t abandon traditional causes, but others (climate change, LGBTQ causes, etc.) will rise in importance, change giving and fundamentally transform philanthropy.

This cohort of donors is different. They prioritize impact and results over emotions. They want to revolutionize giving in a respectful way, but also don’t want just incremental shifts. One Next Gen donor summed it up: “We want to give more from the head and less from the heart.”

Next Gen donors love site visits. They want to see something happen as a result of giving and want to move the needle. The focus is clearly on impact over all other criteria and using data to measure progress.

It’s fascinating that the generation that has grown up with technology and screens wants to see giving and impact face-to-face and observe outcomes!

What don’t they like? Such things as giving to gain social status; donor walls; galas; and campaign progress “thermometers.” These focus on only the money, not how giving makes a real difference. Next Gen donors definitely don’t want to be thought of as “ATMs” or party planners.

With these loud and clear signals, how should nonprofits change their actions to engage and win over Next Gen donors? Here are a few places to start:

* Engage first, ask for gifts later. Next Gen donors consider all their assets to be equal: giving time is as important as giving money, which is as important as giving skills. Offer them real board, committee or volunteer positions. Engage them around their values, not their valuables.
* Don’t be afraid to experiment. Our nonprofit leaders don’t often have the flexibility or the right culture to try bold, new ideas. Be a source of learning and experience. I love what St. Louis Public Radio is doing: They’ve launched a Mini Journalism School (J-School, for those in the know). I signed up! It doesn’t just feature their own journalists, but the six-week program is a resource of experts from across the St. Louis region.
* Giving Circles. These are growing in popularity – small groups which pool contributions together and decide how to impact an agreed-upon specific social problem, relative to your nonprofit. It educates donors about your organization and the impact of giving. I’ve seen suggested contributions vary, but one suggestion was $1 per day from each person, from 20 – 30 members.
* Take Next Gen ideas seriously. Don’t say, “I’ll get back to you on that,” and never close the loop. Remaining open to input behooves us to be direct, honest and transparent.
* Embrace their peer orientation and network – and act as a connector. Could you offer networking receptions with a speaker from your organization? Post job descriptions from those in your network of friends?
* Facilitate cross-generational conversations (not just one-way communication) about legacy, strategy, risk and other aspects of giving). Next Gen donors have experience, perspective and energy to devote to your cause if you give them a voice. Find meaningful engagement, like a strategic planning committee, community engagement/outreach, service or tutoring, appropriate for your organization.

I recognize that this will take creativity and patience. And with staff stretched so thin at many nonprofits, these suggestions may just push you over the edge. But it’s vital to listen and respond if we want to retain these Next Gen donors, and attract even more down the road. Think of the payoff if we’re successful. And the alternatives if we’re not.

For the time being, start with just one idea or change. Engage a small, unofficial focus group of Millennials and Gen X donors and ask for their help in designing and executing the idea. Be bold. Don’t be afraid to fail. After all, it really is our job to make a difference in the lives of those we serve.