What is the next step for charities and donors? It should be clear that charities are probably going to have to change a couple of things, one of them the way donors give. The need for a change should not be seen as a threat, but as an opportunity.Next generation donors show less interest in giving to some of the more traditional causes such as health, youth and family, arts and culture and religion. However, overall we observe more continuity than change in favorite donation causes across generations of givers. So what is the difference?
Hé! Each month I will upload a new blog series. Each series will have one central subject; the subject of this month is ‘A changing donor’. A series consists out of several separate blogs. This is the fifth blog of the ‘A changing donor’ series. For the first blog of the series click here. For the second blog of the series click here. For the third, about the three basics of philanthropy, click here. For the fourth blog, about the importance of trust and building a lasting relationship with donors, click here. For fifth blog, focused on religion and impact, click here.
The next generation
Will the next generation give to the same causes as the previous generation? Do charities have to change their strategies in order to stay in the game? It is understandable that charities are concerned with these two questions. In the blogs before we discussed how donors are changing. We also concluded that if the target group changes, so should the organization. The next question we want to answer is: in what way should charities change if they want to attract new donors (without losing their current donor base)?
Naturally charities want to know if the new generation will also support them. Goldseker and Moody (2017) asked donors in the USA if they support similar causes as their extended family and previous generation. About two-thirds (67%) indicated that they donate to similar causes. The researchers asked the donors to explain their decision. In general donors answered as follows: being active with their families expanded their issue knowledge and built close relationships with specific organizations, so they want to stay focused on those same causes. Notice the emphasize on building a close relationship, as we discussed in the fourth blog of this series..
What are the similarities and changes between generations?
It would be really interesting to research if we would find the same finding here in the Netherlands: are Dutch donors giving to the same causes as previous generations? Hopefully more about this later. For now let me summarize the findings of Goldseker and Moody (2017) focused on donors in the USA. The researchers found that the top two causes are the same for the previous and new generation of givers: education and basic needs. Remember from the previous blog (#3) that in the Netherlands the two top causes are religion and international need.
Next generation donors show less interest in giving to some of the more traditional causes such as health, youth and family, arts and culture and religion. They were more interested to give to civil rights, environmental and animal-related causes. The causes that loses the highest number of donors is religion. Why this one? Well in the previous blog we saw that in general we are becoming less religious. In addition to the decreasing focus on religion I already hinted at a second explanation: impact. Goldseker and Moody (2017) describe that the cause religion is not less interesting, but it is harder for donors to see how they can make a difference. Also, it might be harder to form a close relationship with charities focused on religion. For instance, charities related to arts and culture often host charitable events, while charities focused on religion do not. Maybe religious causes appear more formal and therefore less approachable for the new generation.
While there are differences, if we look over the long history of major giving, the researchers observed more continuity than change. In conclusion: donors mainly give to the same causes. So why did I advice charities to change, or at least consider changing.
Different way: changing how we give
So the new generation wants to give to the same causes, but they want to give in a new way. They want to change how to support the causes they care about. Goldseker and Moody (2017) describe that donors are asking for “more strategic philanthropy”. You might have heard this term before, but what does this mean? The researchers explain that donors are giving more from the head than from the heart. Or as I put it: donors are in lesser extent moved by ‘ the norm to give’ and more by ‘ a need to give’. Donors are more driven by rationality and less by conformity. They want to give in the most effective way. Naturally for these donors, the right donation methods are essential. Thus, for the donor not only the cause is important but also they way they give.
What is different about the new way of giving? What should charities change? I hinted at the answer to this question throughout the blogs of this series. Donors increasingly care about relationships. It is important for charities to become more informal and open their doors: let the donor in. Donors also focus more on the impact of their donation. Remember that seeing is believing. Show the donors what their donation achieved. Another important thing is that asking will no longer result in giving. It seems that donors are less affected by the norm to give and more motivated by making a difference.
Goldseker, S., Moody, M. (2017). Generation Impact: How next gen donors are revolutionizing giving. John Wiley & Son, Icnc., Hoboken, New Jersey: United States.