Generational Giving

Authored by Mary Slenski and Michele Wade

Definition

Understanding the basics of generational theory has the potential of providing insight into a person’s or a group’s core values.  Those core values are the foundation for decisions throughout life, and are, thus, a wellspring of philanthropic activity.  This is one tool for building bridges of understanding including motivations for philanthropic activity and strengthening relationships across generations.
There are five generations alive today: the Matures, the Baby Boomers, GenXers, Millennials, and Gen Z.

Matures: Born 1945 or earlier. The matures are a blending of the Greatest Generation and the Silent Generation. Some of the people from this category may have lived through the Great Depression or McCarthyism. Many learned to work hard, keep their mouths shut, and be grateful for the simple things in life. They are known for working together to accomplish big things. They are also known for their will power and determination (Abramson 2018). Matures often give to philanthropic causes that they have been personally touched by. If they have a sister who had breast cancer, they may give to anti-cancer organizations (Brinckerhoff and Hyman 2011).

Baby Boomers: Born 1946 - 1964. Boomers grew up in a great suburban boom. They lived through the civil rights movement and the Vietnam war. For many their self-worth is tied up with their careers, and they are known for being business savvy. They may get great personal satisfaction from their work, and they often work long hours. Additionally, many Boomers have continued to work well past traditional retirement ages. Boomers are often motivated by an organization’s mission and the ability to make lasting change (Brinckerhoff and Hyman 2011).

Generation X / Gen X: Born 1965 - 1980. GenXers were the first generation to grow up in households where divorce was common. They were also the first generation to grow up after women started to flood the workplace. For many they had two Boomer parents who both worked long hours and who may or may not live together. Thus, many GenXers came home to empty houses after school, and many learned to care for themselves. GenXers today tend to strive for a greater work-life balance than they had growing up. At the same time, many GenXers got used to handling things themselves and now tend to appreciate a certain level of autonomy. Although they did not grow up with the internet and smartphones, they have been quick to adopt new technology. Organizations appealing to GenXers will need to focus on mission while still supporting the GenX requirement for autonomy and work-life balance (Brinckerhoff and Hyman 2011).

Millennials or Gen Y: Born 1981 - 1995. The Millennials are another large generation, and there are more Millennials today than there are Boomers. Millennials are the first generation to grow up surrounded by connective technology. They are naturally social, and they are known for leveraging their social networks for their chosen purposes. They are also a diverse generation, and they are known to value social responsibility. To appeal to Millennials, organizations will need to focus on what Millennials and their network can accomplish together and create environments where Millennials can work in groups (Brinckerhoff and Hyman 2011).

Generation Z / Gen Z: Born after 1995. Gen Z is still young enough that it is somewhat difficult to draw conclusions about them. However, they tend to be extremely tech savvy. Millennials may have grown up in a technologically connected world, but Gen Z is growing up knowing how to track, analyze, and monetize all that connectedness. They are entrepreneurial, analytical, and interested in cool gadgets (Kleinschmit 2019).

Historic Roots

It is only recently that nonprofits have started to look deeper at the cultural differences between generations and how those differences may impact the nonprofit sector. Even now, researchers often struggle to differentiate between tendencies that relate to a generation’s particular culture and tendencies that are attached to life stages. For example, some older people are able to give larger sums to charity because they are no longer paying on their house or putting kids through college. The extra money they give may be due to their stage of life rather than due to the traditions associated with their generation.

Importance
Gaining knowledge of different generational traits will be vital for nonprofit organizations, especially since different generations tend to have specific preferences for donation channels. Organizations will need to simultaneously embrace the needs of the older generations, who are the biggest donors, while still meeting for the technological expectations of the younger generations who look poised to be some of the most generous generations yet. Important trends are already visible, including trends related to the importance of volunteering, the ways in which people give, and the types of philanthropic causes people choose to support.

Matures and Boomers often consider their most important contributions to be monetary in nature. However, Millennials value (or even require) volunteering opportunities more than simply the opportunity to give money. And both Millennials and Gen Z place a higher value on advocacy than previous generations (Blackbaud Institute 2018, 12).

The ways in which people give also vary by generation. Although all generations are multichannel in their giving, Matures are most likely to donate through postal mail, while Boomers and GenXers are more open to donating through websites. Millennials and Gen Z start to shift to donating via social media (Blackbaud Institute 2018, 17).

The types of causes people support also shift with the generations. Older generations give primarily to religious causes and local social-services. Younger generations are more interested in children’s causes, environmental causes, and animal welfare (Blackbaud Institute 2018). The trend away from local social-service activity may be somewhat attributable to the fact that internet networking has given Millennials and Gen Z a more global mindset than previous generations.
 

Ties to Philanthropic Sector
Whether nonprofits are working to include various generations as a type of cultural inclusion or whether they are working to include people at various life stages, there are some things nonprofits should be aware of.

Overall, perhaps mainly due to life stage, the Matures and Boomers are the biggest donors to philanthropy. The Boomers collectively give almost half of all philanthropic giving (Heyman 2016, 144-145). Matures have the highest participation rate in giving, and they also average a larger gift than the other generations (Blackbaud Institute 2018, 8). When you factor in how many Boomers and Matures are giving, it makes the age of the average donor 75 years old (Ahern 2016). This generally holds true across nonprofit sectors and the nation. Thus, nonprofit organizations may want to take into consideration the needs of such donors.

One of the ways nonprofits will need to take generational preferences into consideration is through the types of solicitations they send. While the prevalence of giving by postal mail is falling, older people still tend to be most comfortable reading in hard copy with 14-point font or larger. Keep in mind that many older donors may read a solicitation in hard copy and then go to the organization’s website to make the donation.

At the same time, however, all the generations are moving away from direct mail and towards either web donations or social media donations (Heyman 2016). Nonprofit organizations that are not actively engaging in these newer technologies will surely be missing out on relationships with donors from all generations, especially the younger ones. It will be important for
organizations to ensure ease of donation processing through their websites and social media pages.

Key Related Ideas

Generational Cohort: The “cohort” is the group of people who belong to that generation. Researchers often use the term “cohort” when discussing whether a trait is related to the culture of the group or to the life-stage of the individual.

Life-stage: A general term used to discuss lifetime milestones that often impact giving. It includes questions of whether a person is still in school or whether they are in the workforce, whether they have kids, whether they are still paying for their house or education, or whether they have retired.

Engagement Channels: Refers to the different methods of communicating with and building relationships with potential donors or volunteers, such as postal mail, social media, websites, or word of mouth.

Related Nonprofit Organizations

Blackbaud Institute: Blackbaud has been producing generational giving reports for the last 10 years. https://institute.blackbaud.com/explorer/

Generosity For Life: A website affiliated with Indiana University’s Lilly Family School of Philanthropy that provides information on giving patterns through various life stages, geographies, and so on. http://generosityforlife.org/

Reflection Question: What challenges might organizations face as they strive to be inclusive of generational differences?

Bibliography

• Abramson, Alexis. The Silent Generation Characteristics and Facts You Need to Know. 2018. https://www.alexisabramson.com/the-silent-generation-characteristics-and-facts-you-need-to-know/
• Ahern, Tom. 20 Questions: The Donor Communications Test (Ebook). 2016. http://www.aherncomm.com/wp-content/uploads/2016/11/20Questions_ebook_final2016_v3.pdf
• Blackbaud Institute. The Next Generation of American Giving: The Charitable Habits of Generation Z, Millennials, Generation X, Baby Boomers, and Matures. 2018. https://institute.blackbaud.com/asset/the-next-generation-of-american-giving-2018/
• Brinckerhoff, Peter and Vincent Hyman. Ch. 10: Bridging the Generation Gap in Nonprofit Management 101 Ed: Darian Rodriquez Heyman. San Francisco, CA: Jossey-Bass. 2011.
• Heyman, Darian Rodriguez and Brennan, Laila. Nonprofit Fundraising 101. 143-151. Hoboken, NJ: John Wiley & Sons. 2016.
• Kleinschmit, Matt. Generation Z Characteristics: 5 Infographics on the Gen Z Lifestyle. Vision Critical. 2019. https://www.visioncritical.com/blog/generation-z-infographics
• Tempel, Eugene, Timothy Seiler, and Dwight Burlingame. Achieving Excellence in Fundraising. Fourth edition. 169-184. Hoboken, NJ: John Wiley & Sons. 2016.

This paper was developed by students taking a Philanthropic Studies course taught at the Lilly Family School of Philanthropy at Indiana University in 2019.