“The next generation of donors” is not just the latest fundraising trend or catchphrase for development teams. Nonprofit organizations have always tried to understand how to shift and modify their fundraising strategies to appeal to and resonate with the future generation of donors. But recently, there has been increased emphasis on this portion of the population given the massive wealth transfer that is reported to occur in the coming years. It’s estimated that 45 million U.S. households will transfer $68 trillion in wealth over the next 25 years.
At ONE HUNDRED, (a multi-disciplinary agency that connects the nonprofit sector with leading experts in brand reputation, marketing and fundraising from across Omnicom) we regularly witness purpose-driven companies and organizations changing how they operate to meet the demands of this generation’s global citizens. This year, along with our partner, Changing Our World, we conducted a nationally representative study, among Gen Z and Millennials (those born between 1981-2001) to better understand the donation habits of Gen Z and Millennials and uncover what it means for the future of fundraising.
An important focus of our research was the desire to demystify the expectations of this group and develop distinct behavioral characteristics to help identify those who are most likely to engage and donate. According to our research, 83% of Millennials and Gen Zers trust nonprofits more than for-profit corporations and 86% agree nonprofits are needed to help solve the world’s biggest challenges. Our goal is to harness this high level of trust into next gen donor engagement and ultimately, financial returns.
Based on the research findings, we developed a series of easy-to-remember personas that can be leveraged to tailor messaging and cultivation strategies for distinct audiences.
NEXT GEN PERSONAS
Generous George is in his 30s and likely has kids, and is more multicultural, college educated, and has a higher income than others. He donates time, money, and items multiple times a year. He relies on objective information on how funds are used, the effects of his money, and the history of a nonprofit when selecting causes to donate to.
- Example strategy: The donate page on the Special Olympics’ website is a solid example for Generous George’s segment. The simplicity of the page layout, with the recurring gift option preselected and a prefilled checkbox to help cover the cost of the transaction, is supplemented by powerful imagery. The organization’s mission is clear, and it explicitly lays out how the donation will be used to fund its work. Another way to elevate this would be to add a preselected gift amount.
Loyal Lucy is among the most highly educated of the segments and stays engaged in a bit of everything—she is equally likely to donate money, time, and items. She is 100% positive that she will continue to volunteer time next year, but slightly less sure she will continue to donate money. Compared to other personas, she is most likely to volunteer every month. She is more likely to rely on information directly from a nonprofit than other audience segments and tends to stick with nonprofits she’s already donated to in the past.
- Example strategy: A popular example of cultivating this type of loyal engagement is establishing junior boards. A growing number of organizations are instituting junior boards to outsource next gen engagement to a group of young, mission-oriented, loyal supporters with networks and influence to leverage. Habitat for Humanity is a prime example of this, as its Habitat Young Professionals (HYP) engages fellow Millennials and Gen Zers as volunteers, advocates and donors. With local chapters throughout the country managed by Leadership Boards, HYP members gain access to special events for an annual fee and are encouraged to invite friends and family to grow the network. The result is a semi-autonomous entity of dedicated young volunteers educating and socializing with their networks on behalf of the organization.
Inactive Izzy has a lower income than other personas and doesn’t donate much—chances are she hasn’t done anything at all to give back in the past 12 months, nor does she plan on donating money or time any time soon. Clear information and immediate need (i.e. natural disasters), as well as peer-to-peer fundraising, can help spur her to donate.
- Example Strategy: A popular example of a peer-to-peer initiative driven by personal connections is the ALS Association’s Ice Bucket Challenge. Not only did the effort take the world by storm and accomplish its awareness-raising function, garnering the participation of 17 million people across the globe, but approximately $115 million was raised for research and patient care. These approaches offer more flexibility to the supporter and relieve the expectation of a monetary contribution.
Donor Danielle is the most prominently female segment and prefers donating physical things—money and items—over volunteering her time but tends to do so just once a year. That said, she’s not committed, and is unsure of whether or not she’ll continue donating in the next year. To keep her engaged, make sure the donation process is simple and easily accessible, especially if she only wants to donate small amounts at a time.
- Example Strategy: Easy-to-use payment methods are a slam dunk for donors like Danielle who remain uncommitted and unengaged. Venmo has rapidly become the young American’s payment method of choice in recent years. Particularly among Millennials and Gen Z, the app is so ubiquitous that “Venmo” now functions as a verb in common parlance. While it does not yet have an official nonprofit function, as of October 2019 Venmo’s highly anticipated nonprofit account program is in private beta phase. Once released, the nonprofit sector can likely expect a surge in one-time donations; it will be up to individual organizations to a) adopt this technology and b) convert those individuals into recurring donors.
Impact Ivan, the youngest segment (in his 20s) wants to make sure what he does has a direct impact—he prioritizes donating time and items over money. That said, he is open to donating more money in the next year to complement his volunteer work, especially if he is able to do so in a way that he knows will help his friends and family or can connect with nonprofit organizers in person. He is also much more likely to prioritize causes helping the environment than other segments. A large opportunity exists to encourage Impact Ivan to donate money by engaging him through volunteering and providing clear information on how his money will be used.
- Example Strategy: Donors of all ages have become accustomed to and demand a higher degree of transparency; this is especially true of next gen donors who have come of age with a world of information at their fingertips. Scott Harrison, the CEO of charity: water, has always understood this lack of trust in nonprofits. The organization’s famous 100% Model, in which every cent of donations goes directly toward clean water projects, remains a foundational promise to satisfy the need for transparency. Over the past decade, understanding the importance of a seamless user experience, charity: water leadership has invested heavily in the usability of its online and mobile giving interface so that donors automatically understand where their donation is being used and for what purpose. The organization’s prescient investment in data-driven outreach and a customized user experience has resulted in a more engaged donor base, allowing them to raise over $69 million in 2018.
Applying the Research
At this point, you may be saying to yourself, all of these personas are great – but how does my organization effectively use this information to increase my fundraising bottom line? Like many questions of this nature, there’s no one silver bullet. But there are five key findings from our research to keep in mind as you develop your fundraising strategy and approach:
- Social is best: The best channel and messenger to reach this cohort is social media but staying aware of the latest social channels and networks that are being used by this group is crucial.
- Transparency is key: The majority of young Americans reported that having clear information on how nonprofits will use their donation increases their likelihood to donate money.
- Personalize through storytelling: To get young Americans invested in a cause, make a personal connection through storytelling related to the nonprofit’s
- Build authenticity and trust: Authenticity and transparency are critical to gaining next gen support; an organization’s mission,values, actions and effectiveness must be consistent in brand messaging and donor communications.
- The user experience is important: As in business, simplify online donation pages and make sure your organization’s site is mobile-friendly and on the cutting edge of using non-credit options like PayPal/Venmo.