News & Articles

Talkin’ ‘bout our generations

Earlier this year Blackbaud released their third in a series of generational giving studies. The Next Generation of American Giving 2018 sheds light on the inner life of donors across the generations and their actual giving behaviour.

But how similar are American donors to Australian donors? To find out, we’ve used the 2018 Pareto Benchmarking Report and the NAB Charitable Giving Report 2018 as companion pieces to Blackbaud’s research.

The generations

Generation names and age spans are defined somewhat differently depending on country and/or region. Roughly speaking, the following are considered ‘global’ generations:

Millennials                  1981-1996       (22-37 years old)

Generation X              1965-1980       (38-53 years old)

Baby Boomers            1946-1964       (54-72 years old)

Matures                       1928-1945       (73-90 years old)

 

The key findings across both reports

  • Baby Boomers are not even close to relinquishing their position as the top donors. They continue to represent the greatest portion of total giving.
  • It’s Generation X who are close to their prime giving years. Gen X will be the next ‘big thing’ for philanthropy.
  • The number of donors is declining but those who are still giving, are giving more. So understanding and retaining the donors you have is more important than ever.
  • The use of direct mail is also declining, but online giving has not filled the gap left by reduced acquisition direct mail.
  • The Matures still give more than any other generation and are more likely to make a bequest. This will gradually change as the Matures age out.

Fewer donors are giving

Blackbaud Report:  With the exception of Baby Boomers, each generation has seen a decline since 2013 in the percentage of donors who say they give to charity. Research suggests that, even as total dollars donated is growing, the population of givers is contracting.

Pareto Benchmarking Report: Income from retained donors has increased whilst the volume of retained donors decreased. This decline was driven by reduced direct mail acquisition over the past year.

The mature generation is in its sunset years

Blackbaud Report: Donors now in their mid-70s and up remain a significant giving force. They donate more money per capita ($1,235) than any other cohort, and give to more charities. But although they remain mighty in generosity, their star is fading as they age out.

NAB Charitable Giving Report:  Older Australians tend to give more than younger generations with over 55s accounting for almost half of total charity donations (bequests are not captured):

  • Matures donate 26% of all donations
  • Boomers donate 22% of all donations
  • Generation X donate 21% of all donations
  • Millennials donate 11% of all donations.

In the year to February 2018, average total donation for over 65s was $478.

The challenge for fundraisers is that while the Mature generation continues to be generous, we must be mindful that this generation will not be around forever. So a continued focus on the giving and communication preferences of Boomers and the upcoming Generation X is important.

Baby boomers are the most generous generation

Blackbaud Report: The Boomer generation remains the most populous of any generation, with more than 74 million living members. They were responsible for 41% of all donations made during the research period.

The average US cash donor is 64 years old. That puts them dead centre in the Boomer cohort. It’s realistic to predict their dominance to continue for at least another five years.

Pareto Benchmarking Report: The Boomer generation is Australia’s largest adult generation – 4.1 million strong. Boomers over the age of 50 are responsible for around 50% of all donations to charity.

Cash donors:

  • Average age: 67 years old (Baby Boomer cohort)
  • Average giving in 2017: $120
  • Regular givers:
  • Average age 47 years old (Generation X cohort)
  • Average giving in 2017: $388.92

Generation X is on deck

Blackbaud Report:  According to the latest Census information there are roughly 65.6 million Gen-Xers in the U.S., and 67.1 million Millennials. That’s a difference of less than two million or two per cent difference between the generations.

The more meaningful difference is one of life stage. Gen-Xers are approaching what have always been prime giving years.

Australian Census Information: There are 4.8 million Gen-Xers in Australia. The nearest generation by size is Millennials at 4.9 million followed by Baby Boomers at 4.1 million.

That’s a fairly even split, but as the Blackbaud report suggest, the more meaningful difference is of life stage.

The first of the Gen Xers has quietly turned 50 years old. This is the generation for fundraisers to watch as at about age 55 people start to become more reliably charitable because they’ve got some extra money.

There are plenty of younger donors. But …

Roughly, millennials contributed 14% of all money donated over the last year in the US, and in Australia, they represented 11% of giving.

Historically, most giving has come from people in middle age and older. And that relationship makes sense.

Younger people typically have much lower disposable income than older people and face uncertain employment prospects and high levels of student debt.

In contrast, older donors tend to be more financially secure and more likely to recognise the relationship between giving and their overall wellbeing.

There’s no question the day will come when Millennials are a philanthropic force to be reckoned with. (And we are seeing signs of that in Australia through face-to-face giving). But for now, it’s a long-term investment.

 

Overall recommendations

1. Focus on the generations that matter today. Boomers are still at the top of the pyramid and Gen X is not too far behind. Love the donors you’ve got. And try and find new ones just like them.

2. Treat your donors well (because that’s how you’ll raise more money) Understanding the needs and expectations of your donors has never been more important. If you treat them right, they’ll give you many years of loyal support.

Remember Nana Murphy? She’s the most important donor in the world – but you need to know who your Nana is.

3. Get serious about retention The Blackbaud 2017 Charitable Report shows that first year retention continues to be abysmal – between 25 and 31% depending on how the donor chooses to give. For Australian donors, Pareto’s benchmarking shows fir year retention of new donors ranges on average between 28% to 56%, depending on channel.

With a shrinking donor population and growing uncertainty about the stability of primary donation channels like direct mail, this is the time to get serious about keeping the donors you have.

4. Get your house in order Evidence is growing that internal organisational issues –  including unsupportive culture, silos, lack of resources, access to actionable data, and other factors  – are having a significant impact on fundraising effectiveness.

Ignoring internal issues is not a luxury any organisation can afford.

5. Commit to testing You know that thing you tried a few years ago that bombed? Maybe try it again. How donors behave changes all the time. Plus, don’t assume past tactics will continue to work.

6. Listen to your donors Relationship fundraising is a two-way street. And fundraising will increasingly be focused on personal connection. While technology will be used as an aid, the fundamental principles of a strong relationship won’t change.

Leave a Reply

You must be logged in to post a comment.