Philanthropy for America (PFA) is a national nonprofit startup that exists to enlist, equip, and empower the next generation of Millennial leaders across The United States into the nonprofit sector through training, coaching, experiential learning, and public service so that they would be empowered to impact their societies.
The millennial generation, those born between 1980 and 2000, have been described by older counterparts as entitled, narcissistic, and even lazy. However, in the past few years, stories have emerged that question this stereotype. Whilst millennials are taking radical steps away from trends of past generations, many new studies have shown that they are interested in making big changes.
Millennial’s unique experiences have given them a strong sense of social responsibility and interest in making a positive impact on their community. Derrick Feldmann, the founder of the Millennial Impact Project, says, “We’ve seen (and reported) how much this generation’s social consciousness has influenced our world. Social entrepreneurship has skyrocketed. Corporations have expanded social responsibility and employee giving programs. Government has issued new social issue policies.”
Let’s take a look at the notable traits that make millennials such great prospects for nonprofit organizations.
They are community-driven. As reported in the 2017 Millennial Impact Report, many millennials are driven to get involved locally. For certain causes such as healthcare, education or even civil rights and immigration, millennials tend to try to make an impact they can see in their communities.
They are connected through technology. This is the first generation to have grown up in the digital age and it is no secret that Google and social media have changed the way they connect with others. They are a generation with a global reach that is able to share and receive information on a much larger scale.
They are the largest generation yet. The millennial population has now surpassed the baby boomers generation. Their sheer size, in combination with their ability to connect to individuals globally, makes this generation a force to be reckoned with when they decide to support a cause.
They strategically support causes with a strong desire to see the outcome. Also known as impact giving, this generation is taking more time to research the causes that they are passionate about. Whether they are giving back with donations, volunteering individually or finding a platform where they can be heard as a community they are taking time to think about how to make the biggest impact.
They are generous. They are still a young generation that is overcoming financial struggles, yet over half of millennials make donations to charities. When it comes to volunteering their time, over 80% are actively involved! It is also worth mentioning that this generation is expected to increase their giving in the years to come.
What You Can Do to Effectively Engage Millennials
According to Derrick Feldmann of the Millennial Impact Project, anyone looking to engage millennials should take note that they are focused on changing society for the better, but they are not waiting for approval or participation to get things done. Organizations and fundraisers will have to adjust to these donor’s needs or else risk losing their support. Keep some of these tips in mind as you reach out to this generation of donors.
Ask for Specific Gifts. Some fundraisers have started asking for very specific gifts from millennial donors that make donations feel more personal. For example, buying a certain item from Amazon for a student who doesn’t have the means to purchase this item or giving funds to build a house for a family in need.
Focus on Online Engagement and Giving. This generation has changed not just the way of communication but also the manner of engagement. Older methods of engagement like emails and phone calls may not be totally out of the question, but there is no doubt that thanks to millennials online interactions are increasingly important. These are some of the online initiatives you might want to consider:
Social media-driven campaignsEncourage social-sharing and social peer-interaction with thoughtful, interest-driven materialOnline giving and crowdfunding platformsMobile silent auctions and raffles
Try Experience-Based Fundraising Events. Millennials appreciate interactions and involvement, which is probably why events such as University of Georgia Miracle’s 24 hour Dance Marathons have been such a success. This year the organization, run by students, raised over $1.2 million in funds for Children’s Healthcare of Atlanta with this experience-based events.
Use Peer-to-Peer Fundraising. Since millennials are very peer-driven they are more likely to get involved (or at least make a one-time donation) if they hear about it from a friend. Using relationship mapping and the trust you have with your existing donors to generate new prospects is an effective way to reach millennial donors.
Start Engaging Millennial’s now. This generation is just coming of age and, though some are still dealing with student debt and entry-level employment, millennials are still giving significant amounts to philanthropic organizations. Millennials on average gave $580 USD to charity in the past year. Although these numbers aren’t as high as donations from older generations, they are quickly catching up to their successors, the Gen Xers, and arepredicted to increase as the millennials mature.
The past few years have brought about social change that has put a spotlight on what this generation is capable of. They have marched, spoken up, protested, made their voice heard, and given back to causes that span from women’s rights to gun reform to immigration. They have a strong drive to change what they feel isn’t right about society and are bound to make even more waves in the nonprofit world in the near future. As long as nonprofits and fundraisers can adapt to their styles of engagement, millennials have the affinity and values that many organizations would hope for in a donor and volunteer.
You’re a Millennial. You’ve completed your undergrad education. You have a job. And now you’re wondering how to give back, but what you should be wondering is how to give back effectively.
Because Millennials often lack access to excess funds and hold low disposable incomes, face higher unemployment than older generations, and are often saddled with student debt in excess of $30,000, making sure every dollar spent is put to good use is more important than ever before. Otherwise, it’s money and time that could have been better spent elsewhere.
Unfortunately, not all philanthropies are created equal, and as such, some put your time and money to better use than others. Thankfully, there are a few ways busy Millennials can make sure the philanthropy they are giving to is the one that’s going to do the most good for the cause they care about the most.
The first step in finding your philanthropy is finding your cause. This can seem deceptively difficult sometimes, especially for busy Millennials that may not have the free time available to stay up-to-date on the latest philanthropic endeavors, but here’s some good news: as global wealth has grown, so have the number of philanthropies. There are literally hundreds of thousands of registered philanthropies located across the globe, with more being created all the time. With so many options available, choosing a cause is often as easy as deciding what you care about changing in this world.
The most difficult step in finding your philanthropy is research, but it’s also the most important. Without research, it’s very possible that you could end up giving your hard-earned money and time to an organization that is not operating efficiently enough to make the kind of high change per dollar that you would like to see. Or even worse, they could be using your hard-earned money to further line the pockets of the wealthy looking to get wealthier, although these organizations are few and far between. The buzzword here is transparency. If you want to be able to trace exactly where your dollar goes and how well it helped those it was intended for, you want a very transparent organization. Transparency also makes it much more difficult for a philanthropy to use an unnecessarily large percentage of their donations to pay their executives’ salaries.
There are many resources that can be used to help with this research including GreatNonprofits.org, where anyone can get basic organization information, hear about other members of the community’s experiences, and even find links to donate. While sites like this are great for getting a general idea about an organization’s work, it’s probably not enough to truly feel comfortable in choosing an organization. Kate May suggests that, once you have reached this point in your research, you should reach out to the nonprofit to get more specific details about what it is they do and how they do it. Any reputable nonprofit should be more than willing to give you some of their time answering your questions. After all, you are considering giving time and money to this organization, they can spare some time in return.
At this point, hopefully you will feel comfortable and confident in your philanthropy of choice. Ideally you have chosen one that is run in such a way as to best facilitate your time and money into positive change! With more research into how and to whom we give, perhaps Millennials will begin to be more comfortable with giving, reversing the negative giving trend that has been plaguing philanthropy in America and across the globe.
Austin Starnes is a junior at Indiana University Bloomington’s Kelley School of Business. He is studying both Economic Consulting and Public Policy, with a co-major in Sustainable Business where he serves as the Spring 2018 PFA Kelley Institute for Social Impact (KISI) Intern. Austin can be reached at firstname.lastname@example.org.
Fundraisers licking their chops waiting for Millennials to start giving are going to have to wait for approximately two decades because Boomers are not even close to relinquishing their positions as the top donors. And, Millennials will be behind GenX, a group predicted to be the next big thing for philanthropy.
The number of donors is declining but those who are giving are picking up the slack. That’s not the case in the channel donors use, with use of direct mail response declining but online giving not filling the gap.
Those are among the data points in “The Next Generation of Giving Report,” issued today by theBlackbaud Institute for Philanthropic Impact, which is part of software firm Blackbaud in Charleston, S.C. It is the third in the series that started in 2010.
To get the data, 1,339 donors were interviewed by Edge Research on a commission from Blackbaud. It was controlled to be a nationally-projectable sample of donors. The surveying was done this past January. The report was written by Mark Rovner of Sea Change Strategies and edited by Ashley Thompson of the Blackbaud Institute.
The deepest pockets remain “matures” who give more per capita than any other generational group at $1,235. That will change as the “matures” age out. That begs an answer to the question: With a new generation coming into prime giving age perhaps the “founding assumptions that give rise to philanthropy as we know it still hold” according to the report.
“The GenX story, to me, is the headline. There are 65 million GenXers in the U.S. and they are not even in their prime giving years,” said Rovner. Millennials are 25 to 30 years away from being in prime giving years.
Giving is distributed across more channels than ever. Except for social media, reported use of giving channels has declined or remained static across the board from 2013 to 2018. Younger generations are more open to a wider range of solicitation channels. This could be an indication of donors being confused on how to respond to solicitations by nonprofits.
The data showed that donors get most of their information about an organization from the group’s website. How they got there is a different matter. Thompson said that “an organization’s website continues to be the storefront,” but that “in an omni-channel world “chances are engagement was in other channels including by direct mail.”
It is getting harder to calculate the return on investment (ROI) in a fundraising channel. “Attribution has become a nightmare,” Rover said. He tells fundraisers to calculate ROI “by audience not by channel because there is so much spillover between channels.”
The additional channels are apparently pushing people to get involved sooner. Previous studies showed that in the early TV-age that people knew of an organization for 10 to 15 years before making that first gift. “Now younger generations are bringing their whole selves much earlier than in the age of TV,” said Thompson.
Additional findings from the study include:
* Fewer Americans are giving, so understanding and retaining the donors you have is more important than ever. With the exception of Baby Boomers, each generation has seen a decline in the percentage of cohort members who say they give to charity since 2013.
* Baby Boomers say they gave nearly $60 billion to nonprofits last year. That represents 41 percent of all money donated during that period. Boomers are the only generation seeing a directional increase in the percentage of cohort members who say they give.
* More than 20 percent of Gen-Xers say they expect to increase their giving in the coming year. A significant number of Gen-Xers report they are in the process of making decisions about where their money will go after they’re gone.
* Approximately 34 million Millennials contributed 14 percent of all money donated over the past year. Building relationships with Millennial donors is a long-term investment.
While Millennials see themselves as a catalysis for change, they refuse to be an “Activist.” In the 2016 Millennials Impact Report, 70% of Millennials “felt they had the capacity to improve issues they care about.” However, when surveyed last year, only 21% of Millennials saw themselves as activists.
Throughout their lifetime, Millennials and now Gen Z has been exposed to digital and print media referring to “activists” as criminals. In the news, Activists are the lawbreakers arrested for being too radical and violently disrupting our seemingly peaceful society. This is not all too surprising as the most recent Impact Report suggests that nearly half of Millennials considered themselves as “supporters.” While Millennials often feel strongly about issues and see themselves as the most active generation group in modern history, they do not view themselves as demonstrations or protests which now carries a negative connotation. Instead, today's Millennial attempts to make an impact by buying with a cause, donating money and time, or writing their congressperson.
For instance, Millennials are more likely than previous generations to make an impact by incorporating their causes into their daily lives. Business Insider concluded that 78.1% of Millennials are willing to make a change in their life to help protect the environment. When Millennial MBA’s from North America and Europe were surveyed, 90% preferred a career with an organization that values Social Responsibility. The same study by Stanford Graduate School of Business also found that 70% of Millennials will pay a higher price if the product alleviates a social issue they care about.
Furthermore, youth have always been the actors instilling change in society. Most of the political reform seen in the United States was ignited by protest. Millennials have been able to leverage social media and consumer habits to effect social issues. Can they address political issues without being activists?
Recent events have spurred more demonstrations and protests in even younger generations that may inspire and change how Millennials view activists. Nonetheless, Millennials are passionate about social issues and will continue to attempt to create change. However, how Millennials attempt to do this in the future is relatively unknown.
Madison Christie-Hamre is a junior studying Marketing in the Kelley School of Business at Indiana University Bloomington. She current serves as the Spring 2018 Kelley Institute for Social Impact (KISI) Intern with Philanthropy for America (PFA). Madison can be reached at email@example.com
There are those who say millennials are ruining, among other things, the workforce, the traditional synagogue structure, department stores and, worst of all for those of us in the nonprofit sector, philanthropy. They’re not giving money, they’re not becoming members and donors and sustainers. They expect things for free and they’re not willing to give back to the organizations that give so much to them.
I can’t speak for the workforce, or synagogues or department stores, but I know that I disagree completely with the idea that young adults aren’t engaging philanthropically, and they demonstrate this every year.
At Moishe House, we have always believed it is our responsibility to not only share strong, value-added opportunities, but also to make it crystal clear how and why these services are able to exist. We share our organizational budgets with our young adult leaders (residents), talk about what sources of support that make the work possible and discuss where there are gaps in funding. We acknowledge donors on the walls in each house, in the house newsletters and we regularly facilitate conversations between our major community donors and the Moishe House residents and program participants. This is partially to express gratitude to our donors, but also to model and inspire philanthropy, and to plant a seed for future giving. And while all of these things are important, we realize they are not enough.
To be certain, many young adults benefit from organizations or things for “free” and they are often not returning the favor. However, we, the nonprofits ourselves, are actually the ones to blame. It’s our job to provide services that are of high value to their lives, and it’s also our job to ask them to invest in the work in return.
Moishe House has always been set up to ensure that the residents (the community builders living in the houses) are invested in multiple ways, but the idea of asking them to donate themselves has evolved over the last several years. When Moishe House was first established, its leadership researched other models that included housing and almost all included full housing subsidies, but the organization knew the residents would need to be personally invested as well. In addition to the hours the residents invested each week in programming, they also spent their own money on furnishings, utilities and a portion of the rent, and the model continues to operate this way. In 2011, when our first external evaluation was conducted, we began to understand young adults’ genuine interest in “giving back.” The study asked the residents about their likeliness to contribute money to Jewish causes or organizations. The findings showed us that 58 percent reported a strong likelihood to contribute money to Moishe House, and 53 percent reported a strong likelihood to contribute money to other Jewish organizations or causes. So, we created a platform for young adults to participate in and ask their peers to give back: our annual resident-driven “WE ARE” campaign.
This past year’s campaign was our largest to date. Over the course of seven weeks, Moishe House leaders in their 20s contributed and asked their peers and families to give, and in the end, raised $108,000, a 60 percent increase over the prior year. We are incredibly proud of these efforts and are realizing that we (the professionals) are the ones learning the most here. Given our unique vantage and the importance of cultivating millennials as consumers and investors, we wanted to share some trends and insights we gleaned from this past year’s campaign:
While not a new notion, the idea of being able to invest in something specific and measurable is generally appealing to young adults. In our most recent campaign, we shared language that the donations would be used to directly support the programs in their particular location. People are inclined to support the exact thing in which they have experienced value and nearly 80 percent of the Moishe House participants donating to “WE ARE” designated their gift to their particular Moishe House.Recognition is important, and not just in thanking and appreciating the donors themselves. It’s also critical to provide ongoing gratitude and appreciation to the young adults driving the campaign. Our highest performing house in the campaign (Moishe House Boston – Cambridge) took it upon themselves to hold a donor celebration event to thank their community immediately following the campaign.It is critical to provide space for leaders to have unique ownership of their campaigns. We had 10 houses each raise more than $2,000 and each accomplished this in their own, authentic way. Moishe House Denver leveraged their high profile annual Halloween Bash and simply asked for donations at the door. Nearly every young adult gave funds during an event that they had previously attended for free. Moishe House Portland hosted an auction where participants could “name” items in the house, like the light fixtures, the kitchen nook and even the toilet. Moishe House Budapest made several planned “asks” during the campaign, through social media, at regular programs and then hosted a large event on the final day.Young adults can inspire young adults. The opportunity to hear from, and get inspired by individuals who are making a large impact through their own philanthropy is important cross-generationally so that young adults can envision their future paths. Sharing gifts to inspire other gifts works on a peer level, too. This year, four different Moishe House residents and alumni independently challenged their communities by making matching gifts of $1,000-$2,000 each! All of the matches were met.A set timeline inspires a sense of urgency and assures leaders their efforts will be limited to a short period of time. For this last campaign, we condensed our campaign from almost three months to less than two, and frankly, we will shorten it again next year. Residents reported a shorter time period inspired them to work harder and assured them they wouldn’t get worn out by an ongoing project.Platforms have to be easy-to-use. Young adults thrive in online communities but have shorter attention spans on average, so donation platforms have to be web- and mobile-friendly and simple to navigate. Through an online platform that easily linked to various social media platforms, residents could easily share their campaign with their peers and their customized landing pages (one per house) lent an air of legitimacy to their efforts.
Today, Moishe House is surely benefiting from the contributions our young adults are making back into the organization, and we now estimate that more than 50 percent of our donor base is under the age of 35. With that being said, we also believe encouraging philanthropic giving, and asking, is a critical part of our job. Success for us is not if young adults give to Moishe House, but rather, if they participate in Jewish philanthropy on a broader scope. Just as important as it is to make sure our residents feel confident in facilitating a Passover seder or building a sukkah, they must also feel confident in “giving back,” and just as we provide educational resources for the former, we must assume responsibility for teaching them the latter.
It’s now a ubiquitous headline: Millennials are the largest generation. In 2016, they surpassed boomers at 79.8 million. By 2020, those born from roughly 1980 to 2000 are projected to make up half of the workforce.
For better or worse, millennials may be the most labeled, the most stereotyped generation ever. Millennials, however, are growing up, making waves, and making traditional institutions take notice.
According to the Washington, D.C.-based Case Foundation, the millennial generation is a “tech savvy, entrepreneurial, educated and independent-minded cohort that is driven to ‘do good.’ They are actively reshaping advocacy, engagement, service and philanthropy on a scale that has never before been experienced. As a result, traditional models of engagement, movement building and measurement are evolving to keep pace with their new ideals.”
Derrick Feldmann, the founder and president of the Indianapolis- and Florida-based research firm Achieve, has seen the movement up close. He has led The Millennial Impact Project for 10 years funded by the Case Foundation. The youngest members of the generation are now 18.
“It’s easy to say, ‘Let’s get millennials involved because they’re going to solve it for us.’ At the end of the day, we have to move the general population from interest to deeper action,” said Feldmann, who is a 2001 graduate of the Lilly Family School on Philanthropy. “So that’s where I think we’ve got this challenge is whether this is a generational thing versus we’re in a new stage of how individuals get involved in social issues in our organizations.”
“Our future as a fundraising field is an organization’s ability to look at any individual who has any asset and say, ‘If you want to address this issue, we can do that with you, no matter what you have.’ So that’s the shift. And millennials are driving that shift, but it’s a shift that has started years before that. Millennials by sheer size and force are starting to implement it and make it happen.”
One arena where this plays out is the work environment. Millennials search for companies that are socially responsible and oftentimes check the company’s volunteer policy before applying for a job, according to Chris Herndon, United Way of Central Indiana’s chief marketing and engagement officer.
Part of United Way’s strategy was to find a way to help employers create an environment that offers community engagement, and at the same time introduce the age group to community issues. So three years ago, it started LINC — Lead.Impact.Network.Change — a membership group for young professionals ages 22 to 30. A fall event, called Plant it Forward, had members come together at Flanner Farms and build garden boxes for an urban garden.
LINC is designed to introduce its members to worthy causes and issues that United Way tackles, like poverty, mental health, financial sustainability, homelessness and childhood literacy.
“We hope that this exposes people to community challenges, helps them better understand how United Way is fighting some of these challenges, gives them an opportunity to see how they can connect through us to help address some of these issues. What LINC allows the participants is the try-before-you-buy approach,” said Herndon. “They want to volunteer or experience something first before they give, before they commit financial resources.”
Indianapolis was one of the first to implement this United Way national strategy, now with similar groups in at least 20 other major markets. With much of United Way’s fundraising done in tandem with corporations, the agency is the conduit for that engagement, and at the same time creating a consistent experience across markets.
“If you’re a company that employs in Indianapolis, and Atlanta and Houston, you want to be able to offer something that’s consistent across your company’s footprint,” said Herndon, who is himself a GenXer.
While Feldmann sees merit in courting millennials, he cautions nonprofits not to stray too far from their past initiatives. He urges all organizations to look at their entire supporter base over the past 10 years.
“We know that there are approaches to take with millennials that will work, but the first thing is you cannot go off segmenting unless you understand and have the foundational element figured out first,” he said.
“If anybody raises his or her hand no matter what age, and says, ‘I kind of care about the issue to work on,’ then you can take and move them along a journey of engagement. Get people active in many different ways beyond giving,” he said.
He cites Keep Indianapolis Beautiful and Relay for Life as nonprofits that have sound supporter models by engaging all age groups. These nonprofits help individuals see others who believe in the mission just like them. Relay for Life for the American Cancer Society’s collegiate level and lower has allowed individuals to create their own narratives, rather than define everything.
“Look at it and say, ‘I have to create an opportunity for anybody whether you’re 18 or 80 to care about this issue.’” Feldmann said. “So I think our job should be, “How do we create campaigns — giving or not — that allow everybody to express their interest, their desire to help others, but yet all participate in the same action as well.”
“Once we get past the interest stage, there are approaches that make us get involved more. If you’re a women’s empowerment organization we need to make a message that works across all that focuses on a belief statement like, ‘This is the year to make girls impossible to ignore. Are you in?’
“Does it mean it’s a millennial message? They created a message based on the belief statement that anybody can get attached to it. So that’s where I think we’ve got this challenge between is this a generational thing versus we’re in a new stage of how individuals get involved in social issues in our organizations.”
And that strategy fits in with the largest cultural change in philanthropy – addressing issues together – according to Feldman.
Helping supporters understand an issue is key. Building Tomorrow, a locally founded nonprofit that builds schools in Uganda, helps its constituency understand its educational issues. On the organization’s website is a tool that helps a person calculate the difference in cost between his or her education versus a student in Uganda.
“If you’re invested in helping constituents understand the issue, to get them active on other things, and then have those opportunities to act, you’re in a pretty good boat. That’s the approach that organizations need to look at,” said Feldmann.
Today with technology, involvement in social-good initiatives is easier because it helps remove barriers. Added to that is that millennials were born with these platforms, so it’s a natural progression, and they should be leading the charge.
“Even though the same premise of doing good is present in all generations, it is that you have the tools and the resources to act upon the impulse and the idea and the notion in this minute that you want to do good. Are millennials rewriting philanthropy? I would say technology has allowed the general public to rewrite philanthropy.”
Technology, especially social media, can help take charitable giving to higher levels.
“If I wanted to ask a friend for money, I used to have to go walk over, share the envelope and say, ‘I’m riding in a bike-a-thon. Would you sponsor me?’” Feldmann said.
“Now, the greatest thing today is that we have a technology that allows me to do that. The same premise is still there. So the way that we interact with technology has really advanced the philanthropic opportunities we have.”
Liberty in North Korea, a nonprofit that resettles refugees, is one nonprofit that uses technology to connect its mission to millennials. With chapters at universities, it has one of the largest millennial bases in the country. It takes $6,000 to resettle one refugee, and this fall’s online campaign raised $580,000 from 3,800 millennials.
“They are always focused on elevating the individual in all of the narratives. The individual changemaker,” Feldmann said.
United Way’s Herndon knows that crowdfunding is a tool to use when there is an incredible need and sense of urgency, and not for ongoing needs. However, while there hasn’t been a disaster in the area in a while, Herndon said they have a draft plan and the tools in place together if needed. His agency is part of a group of about 30 United Ways nationally that have co-invested in digital strategies over the past two years.
In addition, United Way is working on a cloud-based program in partnership with SalesForce.org in San Francisco that will roll out this summer with some of its corporate partners. Basically an online philanthropy platform, it will allow individuals to manage all of their giving, volunteering and community interests. There will also be rich cause-related content.
But what’s not going to change, according to Feldmann, is sitting down with an individual and saying, “I’ve got an opportunity for you.
“That is never going to change. The person might have gotten to the table via technology, but I still have to use the practices I learned at the Fund Raising school to help you understand it and move forward.”
Despite the plethora of negative myths and stigmas surrounding the millennial generation, they are a group of consumers set on making a difference in the world around them. “Add good” has been their mantra as they utilize newfound ways to give back. Rather than making random or one-off donations, they are a generation characterized by integrating the causes they care about into their daily routines and purchase behaviors.
As a result, millennials are more receptive to cause marketing than previous generations and are more likely to buy items associated with a cause, according to my research with Boston Consulting Group (BCG). They also expect companies to support the social issues and causes they care about and will reward them if they do. But this is easier said than done when it comes to certain industry verticals.
A budding option for brands? The usage of cause gift cards, such as those offered by Dlyte.com, a fundraising platform that harnesses the spending power of consumers who are supporters of causes.
To learn more about how brands can engage effectively with cause-oriented consumers in this way, I interviewed Dlyte founder and CEO Barry Shore.
Jeff Fromm: How have millennials changed the donating and fundraising experience?
Barry Shore: In the last year, millennials surpassed baby boomers as the nation’s largest living generation. They are also the most diverse generation to date, which is significantly impacting the world of philanthropy. They are deeply committed to “helping” in the generic sense while not being married or dedicated to just one particular cause. Whereas previous generations gave a third of their donations to religious-oriented causes, millennials believe in more self-directed giving, such as TOM’s shoes or Warby Parker.
These digital natives are fast, smart and want to do good for the world around them in their own way. It is this intersection that is dramatically changing how giving will occur in the next generation of philanthropists.
Fromm: Why would millennials be interested in cause gift cards from Dlyte?
Shore: Dlyte offers a solution where millennials can give more without making an additional donation and allocate the specific cause that their money will go to. Causes range from helping veterans to feeding children to training therapy dogs. They also have the ability to choose cards from brands that are important to them, including Amazon, Sephora, Starbucks and Whole Foods.
Fromm: In what areas have you seen the most significant potential for cause gift cards?
Shore: Millennials tend not to cook as much as previous generations and are very social. This has made restaurant gift cards of all styles - fast food, casual, fine dining - best sellers. Users realize that by ordering a digital gift card from their favorite eatery or even a grocery store via the site enables them to receive a quick, full value card that gives funds to their favorite cause at no additional cost.
Older millennials, between the ages of 25 and 34, seem to be fueling the rise in the purchase of food retailer gift cards specifically as three out of five surveyed reported buying at least one in the past year. The same holds true for the clothing and entertainment sectors.
Fromm: What benefit do cause gift cards offer retailers?
Shore: Gift cards are a growing billion dollar industry and their usage is moving from gift to spend. There is a huge untapped opportunity in the nexus of these two forces, as almost 50% of millennials are willing to make a purchase to support a cause and more than a third say they’ll pay extra if they deem a cause or brand worthy. Additionally, Mercator Advisory Group found that 63% of consumers bought prepaid gift cards this year, up from 61% in 2015 and 56% in 2014. The need to connect and build loyalty with these consumers is imperative for brands.
Fromm: What future trends do you see when it comes to cause marketing in the next five years?
Shore: There are two dominant trends that will accelerate through 2025: microfunding and innovation.
Microfunding, a.k.a long tail funding, became and important and substantive part of fundraising with the successful 2008 campaign and election of President Obama. This was further leveraged in 2012 and used extensively by the Sanders and Clinton campaigns. Give $5 - even Give $3 - emails were sent to millions of grassroot (young) supporters. The ability to attract mass audience support for a particular cause in this way will become very robust in the future.
Advances in innovation will be the primary path for this way of giving. Using a device to achieve an immediate donation, especially if it is matched, increased in some way, or given at no cost is the critical stimulus. Relentless leveraging of new and even untested ideas in the tech space will be the hallmark of the most successful causes over the next few years.
Millennials don't give all that much to charity themselves, but they're slowly making the United States more charitable overall.
According to research by fundraising firm Blackbaud, Millennials born between 1981 and 1995 make up 25.9% of the population, but account for just 11% of total U.S. charitable giving. The $481 they give on average is less than the $732 given by Generation X (1969-1979) and the $1,212 given by Baby Boomers (1946-1964), but there's more to Millennial giving than the dollar amount.
While 72% of Baby Boomers give to charity and 59% of Generation X does the same, 84% of Millennials give to charitable organizations. That isn't exactly easy for Millennials, the youngest of whom face a 7.2% unemployment rate at ages 20 to 24 and 14.5% unemployment for ages 18 and 19, according to the Bureau of Labor Statistics. That's well above the overall 4.1% unemployment rate and, for college students, is compounded by student loan debt in excess of $37,000 per graduate, according to student loan analysis site Cappex.com. In fact, the Federal Reserve Bank of New York says that student loan debt has risen from $510 billion a decade ago to $1.4 trillion today, with 9.6% of all those student loans past-due.
Millennials are giving what they can at a time when Americans are giving less than they ever have. According to a study conducted by Indiana University's Lily Family School of Philanthropy, the percentage of U.S. households that give to charity dropped from 68% in 2003 to 56% in 2015. The amount of money we gave during that span also dropped, from $1,024 on average to $872.
However, online giving increased 7.2% in 2016, and Millennials are playing an outsized role in changing how the U.S. donates. According to research firm Massolution, Millennials make up 33% of donations on crowdfunding sites like GoFundMe or YouCaring. Also, as the Better Business Bureau's Give.org discovered, Millennials were the most likely (60%) of any generation to have donated to hurricane relief after Harvey, Irma and Maria last year, but also more likely (79%) to have researched hurricane charities than Generation X (59%) or Baby Boomers (56%).
A lack of cash didn't stop Millennials from donating last, either. According to financial site Bankrate.com, only 29% of Millennials favored monetary donations. They were far more likely to donate clothes, food and other supplies (41%) and volunteer their time (27%). While 22% of American adults gave more in 2017 than they did last year -- almost twice as many as the 12% who are giving less -- Millennials are showing how to make the most impact with the least cash.
"Overall, the most popular reason people gave more is because their income rose, followed by a desire to support victims of recent hurricanes and other disasters," said Bankrate.com analyst Robin Saks Frankel.
With the eldest Millennials already well into parenthood, they're also passing their values onto the next generation. According to the Give.org survey, half of Millennial parents always research charities before donating, compared to 37% of both Generation X and Baby Boomers. But 61% of Millennial parents have talked about charity with their children in the past year, and they are introducing their children to more types of charity than other parents.
They're also trying to make those around them and their children more charitable as well. A poll conducted by Morning Consult for Fortune found that nearly two-thirds of Millennials are somewhat more likely to want to work for a company that gives to charity than one that does not. Millennials also were more likely than other generations to buy products from a company that gives to charity or to recommend that business to a friend.
Those companies are coming around. According to a survey by accounting firm Deloitte, 82% of Millennials says employers are directly involved in issues, charities or social initiatives that are important to them. While just 54% of Millennials get to contribute to charitable causes in their workplace, 77% of those who do, have taken full advantage of it.
40% have followed or taken an active interest in a charitable cause through their employer30% became and active volunteer or organizer30% made regular donations through their employer23% did fundraising through sponsorship or by organizing collections and events
Millennials still have a long way to go before the value of their charitable giving can be fully assessed. But with charitable organizations, employers and even their own children affected by their approach, their impact may be felt far beyond the bounds of their generation.
"Despite negative stereotypes about Millennials, our survey research shows that savvy Millennials are raising the most charity-conscious generation in history," says Art Taylor, president and CEO of Give.org.
The authors said the members of Generation X and millennials will be “the most significant philanthropists in history” because of the estimated $59 trillion in wealth that is currently being transferred to them from their aging baby boomer parents and grandparents. The prosperous members of these younger generations are also cashing in on a better economy.
“We see that these next generations aren’t just waiting until the sunset of their lives to be donors, like previous generations of Andrew Carnegie and John D. Rockefeller and others did, but are really giving earlier,” Goldseker said. “They’re seeing the needs are great, and they have the resources to make a difference. So, they’re starting to give an incredible amount at early stages.”
Moody said although the research isn’t firm, there are indications that the wealth available to the next generations for the purpose of charitable giving is going to be more significant than ever.
“That overall number will go up, we think, over time and certainly with the economy and with wealth transfer,” he said. “But more and more of the percentage of that that is driven by the Gen Xers and millennials, particularly at the top end of the economic spectrum, is going to continue to go up. They’re probably not the majority right now. I think we can say that. But they will be in the next 10, 20 years.”
Blurring the Line Between Profit and Philanthropy
The next generation doesn’t want to separate money into buckets, with one for profit and another for charitable giving. They would rather have one big bucket.
“They’re not really as concerned about the difference between giving in one sector versus making money in another sector, versus doing public work in a third sector, a government sector,” Moody said. “They’re eager to sort of blur those boundaries. And they believe very clearly that they can do as much good, maybe even more good, through what they do in the business sector [by] either investing significant assets in socially responsible ways or supporting businesses that have a double or a triple bottom line.” As a result, their philanthropic investments may not necessarily show up in official estimates of charitable giving.
Goldseker agreed and said it’s time to do away with the stereotype of millennials as entitled slackers. “What we really saw, the top three reasons for giving among these generations, they’re supporting a mission or cause that fits with my personal values, fulfilling my duty as a person of privilege to give back to society, and seeing that my contribution makes a real difference and the organization has real impact,” she said. “As these people are entering the working world and having more resources, they are caring about values more than valuables, and they’re making choices in alignment with those values.”
The New Rules of Engagement
The changing nature of donors translates into new challenges for the leaders of charitable organizations. They will need to find better ways to attract these donors if they want to ensure the sustainability of their organizations.
“The biggest consequence for charitable organizations is going to be, they’ve got to retool how they think about engaging major donors,” Moody said. “The next generation wants to be much more closely involved in hands-on ways inside the organization. The line we use is that they’re less interested in having their name on the outside of the building as a big donor. They’re more interested on being inside, working side by side on real problems, giving their talent, not just their treasure. That means that organizations are going to have to be more transparent with these major donors. They’re going to have to find ways for them to engage in real problem solving and give them ways to be hands on.”
Frankly, Moody said, next-gen donors will be more “high maintenance.” But they will also be more loyal and better for the organization in the long run.
The authors also noted that newer donors are more willing to experiment with different ways of leveraging impact, so organizations should, too. Goldseker offered an example in Daniel Lurie, who runs Tipping Point Community, a nonprofit that fights poverty in the San Francisco area.
“He’s featured in the impact chapter of our book,” she said. “And he says, very concretely, ‘Good intentions are not enough. We can’t keep doing the same thing over and over and expect better results. We actually need to do something different. We need to be innovative. We need to fund our indie in the nonprofit world just like we would in the corporate world to be able to finally move the needle on some of these entrenched issues.'”
The next generation is more willing to take some risks “because they think it’s a greater risk not to,” Goldseker added. “There are pressing social issues in our world that haven’t been solved, and at the front end of their lives, they have the time and the energy and the inclination to make a difference. So, they’re willing to fund C4s, to do crowdfunding.”
Future Areas of Giving
There is an assumption that the younger generation heavily favors global and environmental causes over local or traditional causes. But the authors said that notion is incorrect.
“We found actually their interests are pretty similar to previous generations,” Moody said. “There are some differences around, for example, giving to climate change and for LGBT rights and other human rights and advocacy. There are some changes that are emerging there, so we certainly think those causes are going to be more prominent in the future. But again, they’re not going to give up on health care and education and basic needs. What will be different is that they’re probably going to be giving to different kinds of organizations within those causes. They want to give to smaller organizations. They don’t really like to give to big institutions in which their contribution, no matter how big, is still in some ways a drop in the bucket.”
That means umbrella organizations such as United Way or the Jewish Federation will have a particular challenge in courting future donors. “That part of this philanthropic landscape is going to transform, I think, a little bit. And I think they’re aware of that and trying to adjust,” he said.
Goldseker summed up the changes with a story about Victoria Rogers, who grew up on the Chicago’s tough South Side as the daughter of John Rogers, one of the most successful African-American money managers and philanthropists in the United States. Her father encouraged her to volunteer starting at the age of 12. By the time she reached her 20s, she already had 10 years of experience volunteering in the nonprofit sector.
“She’s now on the boards of the Brooklyn Museum … and Creative Time, and not brand-new to this field,” Goldseker said. “Sometimes I think nonprofits look at 20-somethings and think, ‘You must just be starting out, so I’m dealing with your parents and grandparents.’ Actually, millennials have been volunteering and participating in nonprofit life for decades already.”
Some millennials want to put their money where their mouth is.
In news that may not be particularly surprising, inequality for the millennial generation is on track to be the highest-recorded. It’s an issue that concerns a lot of us, but many young people don’t have the power to make institutional changes. However, that doesn’t mean this generation is powerless to make change. Change really can start at the individual level, no matter what cause you’re dedicated to. Millennials are not a generation that sits around and laments the way things are; we’ve shown ourselves to be politically active.
What are wealthy millennials doing?
Some millennials who already have inherited wealth want to give back to causes they support. An Atlantic article tracking this phenomenon notes that $30 trillion in inheritance money is set to be doled out over the next four decades or so, and with that money comes millennials who are eager to put it to causes they support. Interestingly, millennial philanthropy is happening across the political spectrum, as children of conservative donors pick up the mantle and left-leaning wealthy millennials support causes they’re passionate about.
Wealthy donors are not a new concept, but for a generation that is big on ethical responsibility, it’s perhaps unsurprising that so many are willing to give money to causes they believe in. Even some members of the so-called “1 percent” have aligned themselves with the rest of country, joining organizations such as Patriotic Millionaires, a group of wealthy individuals who support higher taxes on the wealthy and a higher minimum wage. When millennials come into the whole of their inheritance money, it may be likely that we’ll see more of them join organizations like this.
What are the rest of us doing?
Yes, some of these causes are going to be overtly political, and many of us are far from wealthy, but what’s notable is the philosophy itself behind millennial philanthropy at all levels. A piece in Forbes describes millennials as “a generation characterized by integrating the causes they care about” into how they spend money, something that isn’t noted of previous generations. This article proceeds to describe a site that offers prepaid gift cards that give a portion to charitable causes of the buyer’s choice, including an interview with the excited founder. Millennials will spend extra to support things they care about, he says.
This is true, and it isn’t just gift cards and fundraising platforms that millennials give their extra money to. The companies themselves that millennials support are ones that align with their values. This is another trait common to this generation: millennials will spend their money at companies they trust, companies who do good in the eyes of millennial consumers, even if they’re paying more. A whopping 87 percent of surveyed millennials say they’d spend their money at a company that supports an issue they also feel passionate about.
As a generation, we have a lot of work to do to change the world, but we’re equipped to do it, bit by bit. There’s been a sea change in consumption habits that’s led companies to be more charitable to attract millennial spenders, and millennials are willing at all levels of wealth to directly support certain causes. Wealthy millennials may even work on closing income inequality or end up pumping large sums of money into projects such as environmental conservation or social justice reforms. What exactly will happen remains to be seen, but regardless, this generation is up to the challenge to shake things up through millennial philanthropy.