Those dang millennials! That generation of industry-killing, entitled, young adults that major in underwater basket weaving. Those lazy, fully grown children couldn’t possibly be the next big thing in fundraising! Do nonprofits really need a strategy for acquiring and retaining millennial donors?
OK, enough with the negative stereotypes. I only minored in underwater basket weaving!
Did you know, according to Nonprofit Source, millennials account for 11 percent of all charitable giving in the United States? In fact, 84 percent of them already give to charity in some way. While these donors might not have the means to make that large, organization changing gift right now, they are intensely passionate about the causes close to them.
Having a plan for this demographic now can help you develop a new, loyal donor base that will grow with your organization. But these donors are not like the generations that came before them. The tried and true methods you’ve used to raise funds for years with your existing donor base won’t help you attract the next generation of charitable givers.
This post will explain how to turn a millennial’s $5 donation today into a lifetime of support.
What We Know About Millennials
Most circles view the millennial generation as those born between the early 1980s and mid-1990s. But before we share the best ways to get millennials to engage with your organization, its important to understand their unique relationship with charitable giving.
While those on the older side of this group are moving up in their careers and really starting to pull in income, younger millennials are still getting started in their adult lives. So they probably don’t have the means to join your major donors yet. But what they lack in financial capital is made up for in their enthusiasm to improve the world.
Here’s what we know about millennial donors:
- Millennials are the activist generation. They may not be as financially stable as older generations. But they are avid supporters of the causes that matter most to them.
- They like to “test” organizations to see which organizations align best with their goals best and are most deserving of continued support.
- Millennials are accustomed to managing monthly payments. Whether it’s Netflix, rent, or the latest iPhone, many millennials prefer monthly payments to an up-front expensive purchase.
If your organization hasn’t developed a plan to engage with donors and steward each gift, you’re going to have a real problem retaining millennial donors. Saying thank you and making donors feel special after every gift is important for every demographic. But it is critical for retaining millennial donors.
Why is this so important? As we’ve discussed, though millennials may lack in financial capital, they are not short on enthusiasm. As a result, when they decide to give, they want to make sure every dollar they contribute advances their goals as much as possible. To find out which organizations are most deserving of their money, they often make several small “test” gifts before deciding to fully support an organization.
So, the next time you see a $5 gift from a 20-something-year-old, you need to think about what that donor is really trying to do. They are watching and waiting to see how you respond.
The Power of $5
Put yourself in a millennial’s shoes. You’ve determined that you can contribute just $50 towards a cause that matters to you this year. How would you determine what organization will really put your money to work?
Millennials will take $20 of that $50 and make four $5 donations to four different organizations with similar goals. They are testing to see which organization is most deserving of the remaining $30, and any future gifts years from now.
Let’s say two organizations shrug off the stewardship process. “It’s only $5. The donation is hardly worth the paper and postage costs of sending a thank you letter,” they might think. Big Mistake! Nonprofits that fail to respond and thank a donor for their gift fail the test. They will likely never see another dollar from that donor.
The remaining two organizations reach back out with a thank you message. The first sends a generic email in response thanking the donor for their (nonspecific) gift and include a link to their donation page. But, the millennial just heard, “Hey, you sent us some money. Thanks, got any more?”
The last nonprofit takes the time to send a handwritten letter or personalized email from a board member. They thank the donor for their generosity, explain the impact the gift will have on their goals, and invite them to continue their support with an invitation to the organization’s next volunteer outing.
Which organization are you going to give that last $30 to? Which do you think will make each fundraising dollar go further? Which of them do you expect to keep you in the loop about their future activities?
Most importantly, which one will you donate $50,000 to when you are the CEO of a major tech company 20 years from now?
Millennials Love Monthly Giving
Now, let’s think in the short term. None of the above says that you can’t make the most of these donors now. However, you need to know how they are comfortable giving! There are many ways to meet millennial donors where they are at by using social media, text-to-give campaigns, and much more that we will cover in a future whitepaper.
But for now, let’s focus on monthly giving.
Millennials are subscription-based consumers. The long-term cost is not as important to them as meeting their needs on a tight monthly budget. Sure, they could save in the long run if they bought a new smartphone up front. But that could mean missing a rent payment or eating nothing but ramen noodles until their next pay day.
The thought of financing or leasing a smartphone might seem absurd to older generations. But it makes a lot of sense for millennials. Spending $1,000 up front for the newest iPhone might not be an option for them. But they can manage to fit a $50 monthly lease payment into their budget. They also get the added benefit of upgrading to the newest version at their convenience.
A monthly giving program that caters to these needs can be a great way to draw in and retain millennial donors. A $200 gift at the end of the year might be out of the question for many millennials, especially the youngest in the group. However, they can probably find room in their monthly budget for a $20 recurring gift! Instead of the incentive of upgrading their phone at any time, you can encourage them to give monthly by demonstrating the impact their gift has on your goals each month.
Preparing for the Future
Millennials make up 25.9 percent of the US population. 40 percent are already enrolled in a monthly giving program. 46 percent donate to crowdfunding campaigns. 55 percent attend fundraising events, and 64 percent volunteer in their local communities.
The millennial generation wants to contribute to philanthropy. As they’ve done through their lives, they will do what they want, regardless of what other generations think, and set a new standard in the process.
Does your nonprofit have the tools in place to retain millennial donors?