Practical Ecommerce

Future of Non-profits Depends on ‘Generation Y’

Editor’s Note: This article was originally published by Web Marketing Today. Practical Ecommerce acquired Web Marketing Today in 2012. In 2016, we merged the two sites, leaving Practical Ecommerce as the successor.

One of the most the most useful ways we can segment non-profit donors is by generation. Different generations, as a whole, have different giving patterns. Non-profit marketers should be able to build successful contribution campaigns based on generational giving characteristics. Here are some of the main facts about the generations — summarized in the illustration below.

Generation Y, Generation X, Boomers, and Matures all participate in non-profit giving, but to varying degrees.

Generation Y, Generation X, Boomers, and Matures all participate in non-profit giving, but to varying degrees.

  • Generation Y is comprised of people born between 1981 and 1995 (ages 19 to 33). They represent 11 percent of total charitable giving and 60 percent of them give, supporting an average of 3.3 charities, on average.
  • Generation X people are born between 1965 and 1980 (ages 34 to 49). They represent 20 percent of total U.S. giving and 59 percent of them give, supporting 3.9 charities each, on average.
  • Boomers were born between 1946 and 1964 (age 50 to 68). Seventy-two percent of them give to an average of 4.5 charities. This is the group that represents, for most non-profit organizations, the largest group of donors and the group they target most often. They were often raised with a philanthropic tradition, are still working, have money to give, and are frequently the major donors.
  • Matures, those born in 1945 and earlier, generally represent the second largest group of donors (and often the largest group of volunteers). Eighty-eight percent of them give to an average of 6.2 charities. Even those with lower incomes still give; those with high incomes may be among the major donors.

Boomers Give the Most

As a group, (Baby) Boomers give the most, representing 43 percent of total charitable giving. Although the average annual gift, $1,212, is slightly less than the average annual gift, $1,367, of Matures, more of them give (51 million Boomers vs. 27 million Matures). The Boomers, followed closely by Matures, are the groups that non-profits should target as most likely to give now and to give generously. These two groups also represent our most likely candidates for major donors.

There may be generous donors among Generation X, but this group is likely to have higher living expenses and less income for charitable giving. Among Gen X, more of them give than Matures, but this represents only 59 percent of the total group, whereas 88 percent of Matures gives. Also, the average Gen X gift, $732, is only slightly more than half the average Mature gift. If Gen Xers could be persuaded to increase their average gifts, they could become a powerful philanthropic force.

That brings us to Gen Y, another potentially large group, which falls far short of its philanthropic potential. Their average gifts are small, only $481. Sixty-percent of them give, however, about as many as Gen X (59 percent), but less than Boomers (72 percent).

Gifts from Boomers comprise 43 percent of all U.S. charitable giving, followed by Matures (26 percent), Gen X (20 percent), and Gen Y (11 percent).

Gifts from Boomers comprise 43 percent of all U.S. charitable giving, followed by Matures (26 percent), Gen X (20 percent), and Gen Y (11 percent).

Focus on Generation Y

Generation Y people may not give much now, but they have great potential. As Boomers and Matures age and inevitably die, we must rely on Gen Yers to eventually replace them in the donor pool or many charitable organizations will fail. They have not been raised, as a group, with the philanthropic outlook as Boomers and Matures. Their expectations of non-profit organizations, especially their technical expectations, are far different. We must begin to cultivate them as donors now, and adjust our organizations to fit their giving patterns.

The Pew Research Center’s Internet & American Life Project has been working on a series about the “Millennials,” another term for Generation Y. In “The Millennials: A Portrait of Generation Next,” Pew reports that “two-thirds of teen internet users … are online every day while 36% of teens go online several times a day.” The research also reveals that Gen Yers want to know what their friends are donating to; they need that personal connection and they want to talk about with their friends.

They represent only 11 percent of total giving now, but non-profits need to cultivate them as donors. As Gen Yers move into the over age-32 group, they have to account for at least 20 percent of total giving. About 60 percent of them are giving now and non-profits need about 60 percent of them giving in the future, so non-profits need those giving to be making larger and larger gifts. Eventually, non-profit organizations need more of them to give to replace the 72 percent of Boomers and 88 percent of Matures that give.

Tactics to Attract and Engage Gen Y Donors

You can find a lot of advice on the Internet about engaging Generation Y. Here’s a summary of the best of the best. FirstGiving.com recommends just three simple steps.

  • Be online. Generation Y grew up in the digital age. Provide social proof of the impact that your organization is having throughout the world. Be creative and fun. It can’t be all business all the time. Find fun topics that are relevant to discuss amid the serious stuff.
  • Offer volunteer opportunities. Generation Y has a lot of energy, skill, and free time. They can promote your organization very effectively through word of mouth alone. Provide opportunities for them to become social media ambassadors. Help them set up social gatherings to spread the word.
  • Offer incentives. Even though 56 percent of those surveyed said they would take a pay cut to work for an organization that is making a positive impact in the world, it helps to offer some incentive. These can range from offering t-shirts to gift cards to some of their favorite places. By giving incentives, you will ensure that word of mouth will travel fast among this digitally connected, highly sociable group.

Wrapping Up

Experiment to discover what works best to attract your particular Gen Y audience. Here are the top three things to remember.

  • Start now. You can’t afford to wait.
  • Use technology. Get online and on mobile and meet Gen Y where they are.
  • Keep it casual. Be innovative. Rely on Gen Y members for help.
Cathy Qori

Cathy Qori

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  1. Brady November 4, 2014 Reply

    This section does not match up with the graphic: “That brings us to Gen Y, another potentially large group … sixty-percent of them give, however, about as many as Gen X, and more than Boomers.”
    Graphic says 72% of Boomers give. That’s more than 60%.

    • Kerry Murdock November 4, 2014 Reply

      Thank you, Brady, for catching our error. We have corrected.