Millennial and Gen Z donors know who they are and what they want.
They want to have a big impact on the causes they support, they see themselves as innovators, and they are especially eager to volunteer and collaborate, according to findings from two new studies, one that polled wealthy donors of different generations and the other moderate-income young donors.
“These are action-oriented change-makers, and they’re looking for ways in which they can truly partner and collaborate and participate,” says Gillian Howell, who leads advisory services at Foundation Source, a consultancy that advises private and corporate foundations and whose recent study, Shaping Tomorrow: How Gen Z and Millennials View Charitable Giving, examined what motivates and interests moderate-income donors from ages 18 to 42.
“They’re really committed to impact, and they’re not giving out of an obligation,” says Dianne Chipps Bailey, who leads Bank of America’s Philanthropic Solutions division, which released findings on Wednesday from a survey that compared the charitable motivations of wealthy donors ages of 21 to 43 with their older counterparts. “They’re doing it because of their conviction around the social change that they want to see.”
The causes these donors care about the most, according to the Bank of America report, include fighting hunger, poverty, and homelessness; supporting human rights and social justice; and addressing climate change and environmental issues.
Howell, of Foundation Source, says her group’s study found that 87 percent of millennials, which the report defines as ages 28 to 43, and 71 percent of Gen Z (ages 12 to 27) who are at least 18 gave money to charity over the past year. It also found that 58 percent of Gen Z respondents and 54 percent of millennial respondents volunteered. That data, Howell says, should pique the interest of nonprofits eager to engage the next generations of committed donors.
Nonprofit leaders overlook these young donors at their peril, say both Howell and Chipps Bailey. They say fundraisers should make sure they are doing everything they can to connect and build relationships with these donors because regardless of how much money they donate to charity now, they will most likely be able to give more as their income and wealth grow.
The findings suggest that one of the best ways to connect with young donors is to offer them a range of volunteer opportunities.
- While all of the wealthy donors in the Bank of America survey said monetary giving was the most common way they gave, 71 percent of the young donors in that study prioritized taking direct action over monetary giving, compared with 48 percent of older donors.
- Ninety percent of older affluent donors said giving money to charity was important compared with nearly half of the younger donors, but the younger donors volunteered slightly more (43 percent versus 41 percent).
- Nearly 30 percent of the young rich donors said fundraising for charities was a priority compared with 14 percent of their older counterparts.
- One-quarter of the wealthy young donors were willing to mentor others. Just 6 percent of their elders were.
“Many of these younger Americans are invested in that busy phase of building careers and raising children, and yet they’re just as likely to volunteer as older Americans, and they’re twice as likely to raise funds for a nonprofit and four more times likely to serve as a mentor,” says Chipps Bailey.
The Foundation Source report found that young donors are interested in collaboration, such as direct-service programs that give them opportunities to volunteer alongside their peers and through participation in things like giving circles, says Howell.
“These generations embrace partnership and transparency and collaboration,” says Howell. “They want to be part of that collective whole as opposed to just going at it individually. They’ve seen crowdfunding and all the social media stuff where people get together behind a cause, and they love that.”
Another way charities can engage young donors as volunteers is by bringing more of them onto their boards, Chipps Bailey says. Not junior boards or advisory councils, she says, but their main boards where they would be involved in a charity’s fiduciary governing work. To do that, she says, nonprofits need to meet younger donors where they are financially and reduce the minimum donation required for young professionals to become trustees.
“Organizations that are overly reliant on that old-fashioned give-or-get fundraising policy,” she says, “that’s an impediment. Prescribed minimums leave out people that can’t yet stretch to that level.”
Both philanthropy experts say volunteering opportunities and collaborative giving efforts aimed at millennial and Gen Z donors need to be highly relational: Charities should create both virtual and in-person events for them. Plus, they say, nonprofits must find ways to reach them where they are, which is on social media. Above all, they say, don’t forget that many of today’s young donors will become tomorrow’s top charitable supporters.
“Treat them like the adults that they are and build those personal relationships by bringing them into your world through direct service volunteer opportunities, through young professional mission-aligned networking groups, and put them on the board as fiduciaries,” says Chipps Bailey. “These are all strategies that are going to be very impactful as you build that long-term relationship with them.”
