Chatter How millennials are changing the face of giving

Chatter How millennials are changing the face of giving

Are millennials more generous than generations past? Nonprofits sure hope so.

December 1st, 2017 by Sunny Montgomery in Chatter

Millennials are changing the face of giving

Photo by CONTRIBUTED

In the early 1970s, baby boomers witnessed the dawn of a new Chattanooga. Thanks to environmental efforts, the industrial smog began to lift from the city deemed the most polluted in America just a few years prior. The surrounding mountains glowed green once again, giving locals a new sense of community pride and, consequently, reasons to invest in their city.

Maeghan Jones

Maeghan Jones

Photo by kbarber photography

"Millennials weren't part of that turnaround story," says Maeghan Jones, CEO and president of the Community Foundation of Greater Chattanooga, a publicly supported charity with the goal of building permanent, sustainable funds for the public benefit. Millennials, Jones says, value the city for different reasons, such as its natural beauty, cutting-edge technology and potential for startup companies.

Both locally and nationally, the way millennials see the world is unique, and that is changing the way nonprofits think about fundraising. With more than 75 million millennials alive today, those born between 1981 and 1997 make up the largest living generation.

If organizations can connect to these potential donors, they stand to gain more than ever before — $30 trillion, to be exact, the estimated amount of money that up-and-coming generation will inherit from their baby boomer parents over the next 40-50 years.

In the early 1970s, baby boomers witnessed the dawn of a new Chattanooga. Thanks to environmental efforts, the industrial smog began to lift from the city deemed the most polluted in America just a few years prior. The surrounding mountains glowed green once again, giving locals a new sense of community pride and, consequently, reasons to invest in their city.

"Millennials weren't part of that turnaround story," says Maeghan Jones, CEO and president of the Community Foundation of Greater Chattanooga, a publicly supported charity with the goal of building permanent, sustainable funds for the public benefit. Millennials, Jones says, value the city for different reasons, such as its natural beauty, cutting-edge technology and potential for startup companies.

Both locally and nationally, the way millennials see the world is unique, and that is changing the way nonprofits think about fundraising. With more than 75 million millennials alive today, those born between 1981 and 1997 make up the largest living generation. If organizations can connect to these potential donors, they stand to gain more than ever before — $30 trillion, to be exact, the estimated amount of money that up-and-coming generation will inherit from their baby boomer parents over the next 40-50 years.

"That transfer of wealth is coloring everything ," Jones says.

In Hamilton County alone, she says, that inheritance is an estimated $9.2 billion within the next 10 years. "Imagine if just 5 percent of that went to create permanent charitable assets," says Jones. "That's $460 million for education and the arts — money to enhance the community."

But in order to tap into that potential, organizations must capture the attention of the increasingly busy millennial.

Patrick Long

Patrick Long

Photo by David Humber

"Donor behavior is shifting," says Patrick Long, vice president of strategy and engagement for United Way of Greater Chattanooga, an organization that supports community issues, such as education, primarily by issuing grants to social service organizations. "General email blasts are not good enough this day and age. You have to fit your organization into [donors'] lives in a way that is meaningful to them, and through a medium that they want to use."

United Way Emerging Leaders attend the Great Conversations event, at which business men and women under the age of 40 came together to network.

Photo by kbarber photography
But more than just opening new channels of communication via email, text or social media, for example, to reach millennials, organizations must understand their psychology. What influences them to give, or connects them to a cause? How do young donors derive meaning from their generosity?

"We see a lot of shared values across all our donors, but they manifest differently," Jones says. "No generation is monolithic, but there are trends."

To better understand those trends, Jones and Long examine the three big ways that millennials are philanthropically different than past generations.

Purposity launch party, hosted at Whiteboard.

Photo by CONTRIBUTED

No. 1: Millennials are peer-influenced.

There was a time when a person's loyalty to a charity was determined by his or her employer, Long says, but millennials won't sign a campaign pledge form just because it was left in their company mailbox. Rather, their loyalty is more influenced by their peers, likely contributing to the rise of "giving circles."

Giving circles have been steadily growing in popularity since the early 2000s. They are a new form of philanthropy similar to crowdfunding, but more involved. In giving circles, a group of individuals pool their dollars and make collective decisions about where to donate that money. According to a report published by Connected to Give, a California-based philanthropic research organization, nearly half of those donors nationwide are under the age of 40.

Many organizations believe it is the networking opportunities and the relatively small personal monetary investment that attract millennials to giving circles.

Chattanooga's UnFoundation, established to help support startup programs with micro-grants, was co-founded by Teal Thibaud, Ben Garrison, Tavis Salazar, Bijan Dhanani and Joda Thongnopnua — all of whom are under the age of 40. Its members attend monthly meetings in addition to contributing $100 per month.

Similarly, Chattanooga's Sankofa Fund for Civic Engagement, which funds projects to improve local communities of color, is predominantly comprised of individuals age 40 or younger. Members are required to contribute at least $600 per year.

"Giving circles are not just the home for millennial donors, but for people who have traditionally been excluded from philanthropy," Jones notes, explaining that historically, the face of giving tended to be white and male. "Women in philanthropy is another trend we're pretty excited about," she adds.

In fact, women are positioned to play a critical role in fundraising's future. A 2011 study by Bank of America Merrill Lynch found that within 90 percent of high-income households, women are now the sole decision maker or at least an equal partner in deciding which causes to support. Moreover, studies have consistently found that women give more than men.

In Chattanooga, women-run giving circles such as the Nightingale Network hope to strengthen this trend by connecting female donors and raising funds for the purpose of improving the lives of women and girls in the region.

Purposity is an online platform that connects millennial givers to specific causes.

Photo by Contributed

No. 2: Millennials are not brand-loyal.

I think back to when my parents gave a donation; they were really kind of trusting and just going on faith that the organization was doing good work," says Long, 31. Then, the advent of the internet allowed prospective donors to pull an organization's tax forms and critically examine its financial impact. Moreover, Long says, "millennials grew up in a world of sophisticated marketing," which made them both savvy and skeptical. "What an organization says is not necessarily trustworthy to the millennial," Long says.

Consequently, millennials rely more on their peers for giving guidance, but also, they are loyal to causes — not organizations. In the near future, Long says United Way hopes to appeal to these up-and-coming donors through cause-oriented mini-campaigns. Rather than asking for a one-time donation or a one-time payroll deduction, the organization will send out a series of emails asking for "$15 to end homelessness" or "$15 to end domestic violence," for example.

"It's lower risk for the donor. They can test the water with that small donation," Long says.

Because in addition to being cause-loyal, millennials are impact-driven. They want their contribution to yield quick, tangible results.

"Purposity is a powerful and very present example of the way these influences have transformed approaches to generosity here in our own community," Jones says, referencing one of the Community Foundation's millennial-centric initiatives.

Developed by Whiteboard, a web development agency in Chattanooga, Purposity is an online platform that connects millennial givers to specific causes. Once a week, members are texted a list of local needs — a winter coat for a child, for example. Then, members select which need they want to meet and make that purchase, a process that takes under two minutes.

The platform, which launched in January, currently has 1,068 members in Chattanooga.

"Thirty-six percent of [Purposity] users are between 18 and 34, and they've met 40 percent of the [650] needs," says Jones. "They get a text; they meet a need; they know directly that it has this impact. It's instant gratification."

No. 3: Millennials want to feel unique.

The concept of donor-centered fundraising arose in the early 2000s, Long says. Rather than focusing on donations, this new approach focuses on the donor. "How do you make the donor the hero?" Long explains. One way, he suggests, is a simple shift in language. "In the opening paragraph of any letter, replace 'we' with 'you,'" he says.

But beyond just monetary donations, millennials' desire to feel unique changes how they give their time, too — leading to another relatively new concept: skills-based volunteerism.

"Millennials don't want to come into a food bank and just pack boxes," Jones says. "If they work for a logistics firm, they want to come in and help with the supply chain."

Volunteers who integrate their professions with their philanthropy tend to be engaged on a more personal level, she adds. Thus, those volunteers are more likely to leave planned gifts, a type of contribution commonly made through a will or trust after the donor has passed away.

From giving circles to apps to legacy gifts, the success of the modern-day philanthropic model depends on presenting young donors with more ways to connect. But while millennials are changing the way the world talks about fundraising, the essence of philanthropy transcends generations.

"It is about compassion. It is a love of humankind," Jones says.