Ivy Investments Forum
We recently gathered a number of thought-provoking experts who shared their latest views on an array of critical issues impacting today’s investing landscape. Watch the session replays to get our panelists’ insights.
Until recently, philanthropic organizations solicited most of their charitable gifts from the two older generations: Baby Boomers and Traditionalists. On the surface, it makes sense. Boomers account for 43% of all giving, donating almost twice as much to charities as the younger generations.1 However, while what and how much the generations give differs, studies confirm all generations give.2 Therefore, it’s important to look at the generational characteristics that influence how a person is most likely to connect with a cause, why they commit to that cause, what you can expect to receive and how engagement looks over time. In short, it’s crucial to answer the question: How does each generation say “yes” to giving?
How do you initiate contact with your donors? The answer should vary by generation. Face-to-face communication and mailed correspondence are still valued by the older generations, so handwritten and personalized notes are especially effective. You’re most likely to reach Gen X through a phone call, text or email. Younger generations (Millennials and Gen Edge) are more likely to be reached through social media and non-traditional channels.1
Don’t underestimate the value of social media engagement for all generations. Studies show while relatively few transactions occur over social media, the conversations that happen are valuable in and of themselves. Younger donors are very peer-motivated in their giving habits, and social media influences their decisions about when and what to give.3 And even though Boomers are older, they’re active on social media — and responsible for the lion’s share of charitable dollars.2
Why do different generations commit to a cause? Traditionalists and Boomers tend to give locally, so earning their commitment probably involves demonstrating community involvement. About a third of Traditionalists and Boomers want to see what their money is accomplishing firsthand. Furthermore, Baby Boomers and Traditionalists describe themselves as “thoughtful” when making decisions about donations, spending time looking at the organization and its mission. For Traditionalists, loyalty plays a huge role. They’re likely to donate to religious organizations to which their families have a strong bond, or to service organizations they’ve been a part of since they were young.3
In some ways, Gen Xers and Millennials aren’t so different from their Traditionalist and Boomer counterparts. Much like the older generations, Xers and Millennials also want to clearly understand the effect of their donation with half of Gen Xers and nearly 60% of Millennials placing a premium on seeing the impact of their charitable giving. Furthermore, they say it heavily influences their decision on whether to give at all.2 However, the key difference for these younger generations is that the impact doesn’t necessarily have to be local. As long as there is transparency around how donation dollars are being used, Millennials and Xers are happy to send resources all over the world. Of course, it’s worth emphasizing that no generation demands as much proof as Generation X. Notoriously skeptical, their decision to commit to a cause hinges on an organization’s ability to show, in detail, the impact their dollars will have and evidence the charity can accomplish its vision.4
The youngest generations (Millennials and Gen Edge), appreciate the ability to restrict their gift to a specific project within a cause, rather than committing to a cause in general. For example, rather than giving generally to the Red Cross, these generations would prefer giving to the Red Cross in support of Hurricane Maria relief for Puerto Rico. In addition, these generations acknowledge they often give to causes after hearing about them on social media. One needs to look no further than the success of the ALS Ice Bucket Challenge, tsunami relief or any of the various online fundraising sites.
What types of resources are each generation most likely to pledge? Traditionalists and Boomers believe money matters most. Forty-eight percent of Traditionalists and 45% of Boomers say monetary donations are most likely to make a difference. On the other hand, Millennials are more likely to pledge their time, believing they can make a difference by volunteering or by raising awareness about a cause and spreading the word through social media. Gen X falls somewhere in the middle: they are equally likely to fundraise on behalf of a cause, make a pledge, or volunteer their time to an organization.2
In the workplace, Generation X and Millennials appear to be on the same page and are four to five times more likely to participate in work-sponsored fundraisers like walkathons, fun runs or cycling races than Boomers and Traditionalists. Boomers who are still on the job tend to skip out on these work-sponsored charity events, but about one-quarter of them give via payroll deduction (the highest percentage of any generation).2
This is not to say Millennials and Generation X focus only on giving time and never money. One only needs to look at the popularity of online crowdfunding sites, such as GoFundMe and GiveForward, to see this isn’t the case. Millennials especially appreciate the benefits of crowdfunding as it aligns well with this generation’s values and traits: it’s cool, it’s social, it’s collaborative and it allows the giver to see an immediate connection between the gift and its charitable outcome. While Gen Edge is still relatively young, data suggests they are also interested in the benefits of crowdfunding as charitable giving.
Once you have connected with a Traditionalist or a Boomer, they are by far the most likely to continue giving. Traditionalists do this out of a sense of loyalty. Boomers tend to set up automated recurring gifts (e.g., a payroll deduction), as this convenient option fits well into their busy lifestyles and competing priorities.2 When it comes to creating continued engagement with Gen Xers, Millennials and Gen Edge, think interesting, impactful volunteer opportunities.5
Generational traits are not the only factors a person uses in deciding when, what or how much to give. Obviously, a stable lifestyle and some financial prosperity are also major factors, and these are often influenced by life stage more than generation. But what will always remain true is that managing relationships is the foundation of successful fundraising. And for that, understanding generational differences is key.6
1Mobile Cause. (2016). Charitable Giving By Generation. Retrieved from Mobile Cause.
2Rovner, M. (2013, August). The Next Generation of Giving: The Charitable Habits of Generations Y, X, Baby Boomers, and Matures. Retrieved from Blackbaud.
3Hartnett, B; Matan, R. (2014). Generational Differences in Philanthropic Giving. Retrieved from Sobel & Co.
4Advancement Resources. (2016, September 23). Generational Differences in Giving: Engaging Generation X. Retrieved from Advancement Resources Blog.
5Gorczyca, M; Hartman, R. (2017, September 6). The New Face of Philanthropy: The Role of Intrinsic Motivation in Millennials’ Attitudes and Intent to Donate to Charitable Organizations. Retrieved from Journal of Nonprofit & Public Sector Marketing.
6Eisenberg, R. (2013, October 4). The Charity Divide: Boomers vs. Gen X and Gen Y. Retrieved from Forbes.
This information is prepared by an unrelated independent third party, BridgeWorks, and is provided for informational purposes only. Ivy