Fundraising Update

Welcome to Fundraising Update. This week, we share insights into how fundraisers can build strong relationships with the millennial and Generation X beneficiaries of the Great Wealth Transfer. We also dig into last year’s giving data.

I’m M.J. Prest, senior editor for advice at the Chronicle of Philanthropy. If you have ideas, comments, or questions about this newsletter, please write to me.

Please note: Fundraising Update will be off next week for a spring hiatus. We look forward to returning to your inbox on April 23.

Thanks to our sponsor Blackbaud for supporting Fundraising Update.

The Giving Power of Younger Heirs

Last week, we told you about the Great Wealth Transfer and how charities and community foundations are focusing on planned giving from the baby boom and silent generations. But those aren’t the only donors who matter. Experts say it’s a mistake to ignore the millennial and Generation X heirs who stand to receive the bulk of that wealth in the transfer, writes my colleague Ben Gose.

Younger donors wield power even before they inherit. Many parents seek the counsel of their adult children, who hold a lot of sway over their families’ philanthropic direction — both before and after their parents die.

Nathan Lindstrom for the Chronicle

Fundraisers should build ties with both aging donors and their younger family members, who are potentially more likely to want to see a track record of charitable results.

A new report by the Giving USA Foundation on generational differences in giving found that younger donors are far more likely than older donors to want to be engaged with a nonprofit. When asked if they would be open to receiving a monthly mailing from a charity after they’d made a gift, 64 percent of millennials and 36 percent of Gen Xers said yes, compared with only 19 percent of boomers, according to the report.

Charities typically focus on the older generations because that’s who has the money now, but they ignore younger heirs at their peril, says Michael Moody, a professor of philanthropic studies at the Lilly Family School of Philanthropy at Indiana University.

“If you wait, the next generation is going to have already developed that relationship with somebody else,” Moody says. “They’re looking right now for those organizations that engage them, where they can get their hands dirty, and where they can propose new ideas and have those ideas taken seriously. It sounds trite, but that is the most important recommendation we make: Don’t wait.”

For more insights on how to make fundraising a family affair, read the rest of Ben’s article.

Need to Know

1.9 percent

— How much giving increased from 2023 to 2024; inflation rose 2.9 percent

Nonprofits brought in 1.9 percent more in donations last year than they did in 2023, according to the 2024 Trends in Giving Spotlight by the Blackbaud Institute. However, fundraising growth didn’t keep pace with inflation, which was 2.9 percent, reports my colleague Rasheeda Childress.

“We’ve seen that this time frame has been one of significant changes and challenges,” says Carrie Cobb, chief data and AI officer at Blackbaud, a fundraising software company. “Despite this, fundraisers continue to be resilient and creative, and donors continue to be generous and really passionate about the causes that are most connected to them.”

The Blackbaud Institute, a research organization associated with the company that pulls from data Blackbaud has on nonprofit customer use and donations served through its systems, issued a report based on two data sets. For general giving, it looked at 8,674 U.S. nonprofit organizations, totaling $55 billion in fundraising revenue. For online fundraising tallies, the data set included 5,151 U.S. nonprofits with more than $3.4 billion in fundraising revenue.

While an increase of 1.9 percent may not seem wildly impressive, it’s still a good number, says Josh Birkholz, CEO of the fundraising consultancy BWF and a previous chair of the Giving USA Foundation.

“I think this is more a story of how much inflation is, rather than giving being moderated,” he says.

For a deeper dive into last year’s giving numbers, check out the rest of Rasheeda’s story.

Plus …

• Six ways nonprofit leaders can boost morale in chaotic times. As charities strive to carry out their missions through a murky financial forecast, morale is taking a hit.

  All nonprofit leaders need to take action to address staff well-being, which will help maintain morale and ensure organizations can continue to carry out their missions effectively.

  “Employees are going through a range of emotions: fear, anxiety, and stress — even anger,” Ian Adair, CEO of the Seattle Police Foundation, told Rasheeda.

  Adair and other experts in nonprofit management offered six strategies nonprofits can implement to bolster morale during these uncertain and anxious times.

  Read their advice in Rasheeda’s article.

Gift of the Week

Naples Comprehensive Health landed $10 million from Jay and Patty Baker to help build the RM Schulze Family Heart and Stroke Critical Care Center, which will integrate complex and specialized patient care under one roof at the Florida health system.

Jay Baker served as president of the national retail chain Kohl’s Department Stores before retiring in 2000. He started his career at Saks Fifth Avenue and later served in executive positions there and with British American Tobacco in the United States. In 1986, he partnered with two other investors to buy Kohl’s, and the three men took the company public in 1992. Patty Baker is a Broadway producer who won Tony Awards for the shows Memphis: The Musical and Who’s Afraid of Virginia Woolf?

For other notable gifts this week, read more in my colleague Maria Di Mento’s Gifts Roundup column. To learn about other big donations, see our database of gifts of $1 million or more, which is updated regularly and has data going back to 2000.

Advice & Opinion

Give Social Media a Rest and Engage Donors More Meaningfully. Supporters increasingly prefer in-person interactions and direct communication from nonprofits. Here are key ways to deliver those and build relationships that last.

Nonprofits Are Doing Leadership Transitions Wrong. Here’s a Better Approach (Opinion). An interim leader can guide an organization through chaotic times, reducing burnout and staff turnover.

What We’re Reading

Japanese American National Museum takes a stand against DOGE cuts. The museum, in Los Angeles, isn’t backing down from its DEI mission following the loss of millions of dollars in federal funding, reports the Los Angeles Times.

As directed by the Elon Musk-led task force, the museum is facing $2 million in lost grants from the National Endowment for the Humanities and the Institute of Museum and Library Sciences, whose staff was placed on administrative leave last month on DOGE’s orders.

The shortfall includes a promised $175,000 NEH grant for the museum’s Landmarks of American History and Culture workshops, which invite teachers and students from across the United States to visit L.A.'s Little Tokyo neighborhood and learn about Asian American history, including the internment of Japanese American citizens during World War II. The NEH under former President Joe Biden approved the grant on a reimbursement basis, so the museum has already spent money on the program; the NEH’s about-face amounts to a refusal to reimburse those expenses.

Despite the funding threats, the Japanese American National Museum will “scrub nothing” from its website, said its board chairman Bill Fujioka. “Our community is based on diversity, equity is guaranteed to us in the Constitution, and inclusion is what we believe in,” he said. (Los Angeles Times)