The Benefits of Acquiring and Retaining Young Donors
How the Next Generation Influences Fundraising and Workplace Giving
According to charitable giving research, overall giving revenue was reportedly elevated in 2021. However, the number of individual donors giving had dropped.
So what does that mean for organizations like yours that rely on contributions from supporters to bankroll mission programming? More than likely, you have an opportunity to reach new, previously under-targeted segments of supporters to continue growing your donor base—and with it, your total funding. One of the best markets to consider is that of young donors.
Many nonprofits, educational institutions, and other fundraising organizations are interested in learning how to engage donors to drive the best results. At the same time, donor retention remains at top-of-mind for most. Young donors are a critical piece of the puzzle, and yet they continue to be overlooked in terms of fundraising potential.
In this guide, we’ll walk through the basics of young donor fundraising, how it can differ from traditional engagement efforts, and how you can make the most of those relationships as they grow. We’ll cover:
- Why Engaging With Young Donors Matters
- Acquiring & Retaining New Generations of Donors
- Factors That Can Impact Gift Size Over Time
- Young Donors & Workplace Giving
- Best Practices for Strategic Young Donor Fundraising
Adapting your marketing, fundraising, and overall donor engagement strategies to attract and connect with individuals of all ages is one of the greatest ways to ensure your team is leveraging your supporter base to its fullest potential.
Want to find out how to do so—particularly in regards to the youngest of donors in your network? Read on!
Why Engaging With Young Donors Matters
Engaging with all of your donors is an essential component of a successful fundraising strategy. What many organizations are seeing, however, is that young donors continue to be an under-targeted market when it comes to seeking donations.
Gen Z and young millennial donors are often referred to as “the donors of tomorrow” or “the donors of the future.” But the truth is that these up-and-coming generations are the donors of NOW. So why are organizations overlooking their potential? It might be because young donors tend to have more limited funding at their disposal to contribute as compared to older, more established supporters.
But consider this: is it easier to ask a new donor for a $10,000 donation and hope they spring for it, or to start out small with a $20-50 donation ask from a young donor who will then become increasingly engaged with your organization over time? In most cases, the answer is the latter.
Not to mention, young donors bring with them nearly unlimited potential. That college-aged individual making a $25 gift out of their part-time paycheck could very well become the CEO of a multi-billion-dollar company that doesn’t even exist yet. And as their income grows, their gifts would likely grow alongside it.
The bottom line?
Be willing to start small and watch the impact of continuous engagement increase drastically over time.
Acquiring & Retaining New Generations of Donors
Like any group, to engage with young donors, you’ll need to focus on two crucial components of your strategy—getting them and keeping them. As far as the basics of the donor lifecycle go, this refers to acquisition and retention.
Here’s what you should know about each pertaining to younger generations of donors;
Acquiring Young Donors
Young donor fundraising involves bringing young donors into your network of support, to begin with. And you may need to take an adjusted approach than what you might use with your general, middle-aged-and-older audience.
For one, attracting young donors can be particularly impactful when using social proof to your best advantage. Social proof, or the idea that people are more likely to do something if they see their peers doing the same—and a founding principle behind peer-to-peer fundraising—tends to be even more effective among the younger generations.
In other words, once you get one young donor in your corner, you have one of the best tools to draw in others in their circle. At the same time, other key practices include reaching donors where they are, such as on social media sites and mobile technology—but more on those tips later.
Retaining Young Donors
Once you’ve laid the groundwork for a supporter relationship and even secured your first donation, you’ll want to put in the time and effort to elevate the connection to new heights.
Even more than your typical donor, Gen Z and young millennials desire to feel connected to the organizations with which they get involved. They want to know that their funding is going to impactful causes, so excellent financial stewardship efforts are essential (top tip: demonstrate that you’re making the most of each dollar you receive by emphasizing corporate matching opportunities!).
It’s also a great idea to offer streamlined recurring giving options—and to ensure donors of all ages are aware of the opportunities. After all, what better way is there to ensure your new donors return time and time again than to essentially get them set up on auto-pay? In fact, research into young donor trends reports that young donors are more likely than the average donor to be enrolled in a monthly giving program (36% overall enrollment rates, with donors aged 18-29 coming in at 48%). Be sure to give them what they want, and market the ability accordingly.
Factors That Can Impact Gift Size Over Time
Many young donors are likely to start out by giving low-level donations to the organizations they support. But every dollar counts and their potential to give can increase exponentially as time goes on.
Here are a few factors that can impact gift size and lead to continually growing donations;
The average person’s income tends to rise over time, whether by receiving promotions, moving employers, diving into new industries, or even exploring an entrepreneurial spirit. As donors of all ages benefit from elevated incomes, their ability to give to the causes they care about tends to rise proportionately as well—oftentimes at an even higher rate than the income or salary increase itself.
Deepening connections to the organization
Finally, an individual’s personal connections to a nonprofit can be a significant factor when it comes to determining their gift size. Sure, a charitable-minded donor might make a $25 gift to a random organization when asked, but they’re likely to reserve more substantial funding for the causes and groups they feel most passionate about. And when you start developing that personal relationship early on, these individuals (i.e., your young donors) will be more likely to continue supporting your organization in larger and larger amounts as time goes on.
Young Donors & Workplace Giving
Another key factor that can have a substantial effect on young and old donors’ giving alike is employer giving—otherwise known as workplace giving or philanthropy. Thousands of companies offer employee or workplace giving programs such as matching gifts and volunteer grants, and over 26 million individuals can qualify for the opportunities through their personal nonprofit contributions. Obviously, these programs benefit the nonprofits receiving the corporate funding, but there’s a lesser-known benefit as well: employer giving eligibility tends to drive increased individual engagement.
In fact, our corporate giving data reports that 84% of individuals are more likely to donate if a corporate match is offered, while 1 in 3 donors indicate they’d give a larger gift if matching is applied to their donation. All in all, this brings about findings that donor messaging that mentions matching gifts leads to a 71% increase in response rate and a 51% increase in the average donation amount, thus resulting in elevated conversions, gift sizes, and donor engagement. Though the exact reasoning behind the increase is unknown, organizations theorize it has to do with donors aiming to meet their employers’ minimum match requirements along with the understanding of magnified donation impact.
So what does that have to do with the young donors in your network? As these individuals enter the workforce, and more specifically, the corporate world, their chance of qualifying for donation matching, volunteer grants, and other forms of workplace giving skyrockets—and with it, their individual donations.
Not to mention, young donors are increasingly demanding corporate social responsibility from the brands they buy from and work for. In fact, nearly 2/3 of young employees won’t take a job at a company with poor CSR practices. Thus, your younger supporters are more likely to work for businesses that match employee donations in the first place, effectively elevating their chances at eligibility.
Meanwhile, as Gen Z and millennials continue taking up more and more of the workforce and consumer population, more and more companies are following suit by implementing and improving their workplace giving programs. And when offered, young donors partake in employer giving in droves—studies show that over 58% of young professionals gave through a workplace program in 2020, compared to 37% of professionals overall.
Best Practices for Strategic Young Donor Fundraising
The better you engage with your donors of all generations, the more likely you are to raise funding effectively. Prepare your team to deepen relationships with young donors by incorporating the following tips;
1. Segment fundraising efforts by age group.
Fundraising is not a one-size-fits-all effort, and as a result, one-size-fits-all donor engagement strategies are not likely to be particularly effective. And, as you likely know, one of the largest segmenting factors has to do with donor age.
Young donors want to get involved with the organizations and causes they care about, but you’ll want your tactics to reflect a targeted approach. A 22-year-old, fresh-out-of-college graduate and a 70-year-old retired schoolteacher can each be excellent supporters of your nonprofit—but it might take different initiatives to reach them both.
For example, giving studies indicate that younger donors tend to be most inspired to donate via social media, while older supporters are more impacted by email fundraising—and that’s not even taking Gen Z-ers into consideration!
Overall, we recommend reaching younger supporters and prospects by prioritizing mobile and digital engagement strategies, incorporating valuable and eye-catching visuals (through images and video), and demonstrating donation and organization impact whenever you can.
2. Offer multiple ways to get involved with your organization.
Young donors often desire diversity in the ways they engage with an organization. And not receiving that can lead to donor fatigue and, ultimately, lapsing support.
Thus, be sure to provide a plethora of methods for individual donor involvement—whether they involve financial support or not.
So, what kinds of opportunities can you establish (and promote to) your donors? These might include (but are certainly not limited to):
- Volunteering at a dedicated event or on a regular basis;
- Taking part in a corporate giving program like matching gifts or volunteer grants;
- Attending a fundraising event like an auction, gala, or walk-a-thon.
- Participating in the organization’s board of directors;
- Exploring a peer-to-peer fundraising role by soliciting donations from friends and family on the nonprofit’s behalf.
Regardless of the many ways an individual chooses to get involved, remember to communicate your gratitude as well as the tangible ways their engagement impacts your cause.
3. Increase suggested donation amounts over time.
As online giving becomes more and more prevalent, studies have been conducted to determine the impact of suggested donation amounts on total fundraising revenue. And overall, organizations tend to see elevated average donation amounts when they do so (meaning if you’re not already providing gift size suggestions, you should be).
Taking this concept a step further, however, is the idea that your team can increase the amount you request from donors over time to continue growing relationships and donor contributions.
For example, an individual might bring in four times the salary they had when they started giving to your organization. But if they donate on a regular basis, they might never take the initiative to increase their gift size—that is, unless your team chooses to coax them in that direction. And it can be as simple as requesting $100 from Donor A in your next annual fund appeal after determining they’ve contributed $50 for the last few years.
4. Inform donors about workplace giving programs.
We mentioned that donors often choose to give more often and in larger amounts when workplace giving opportunities (like matching gifts) are in place. And with many young donors becoming eligible for these programs for the first time, it’s essential that they’re made aware of the programs.
After all, over 78% of individuals employed by companies that match employee donations have no idea that they do so—or that they themselves would be eligible to participate. This knowledge gap regarding the programs is one of the leading causes of billions of dollars in unclaimed matching gift funding being left on the table each year.
So get proactive about it! Be sure donors are informed about matching gifts and other employee giving initiatives by highlighting the programs within your organization’s —
Workplace giving marketing is a particularly impactful engagement tool, driving participation in corporate philanthropy programs alongside individual contributions. And if you’re looking to take your young donor engagement to new heights, you won’t want to overlook these initiatives and the impact they bring.
Interested in learning more about engaging young donors? Check out our immersive webinar on the topic!