Generational change a challenge for charities

A study by social research firm McCrindle has found donors are moving from predictable committed giving toward more spontaneous need-driven giving.

The change is being spurred by Gen Z donors (aged 18–29), who are more likely to give when they hear about a need or issue in the community or are approached to donate or offer support.

More than half of Baby Boomers (aged 60–78), by contrast, are committed givers who donate semi-regularly throughout the year or on a regular basis.

McCrindle's director of advisory, Ashley Fell, said the evolution in giving patterns meant the sector's stable donation base was shifting, something that could have significant implications for charities and not-for-profits.

While 38% of all donors give to a charitable organisation when they hear about a need or issue, at the other end of the scale, just 13% give on a frequent or regular basis – down from 17% in 2017.

“This means that a committed, consistent revenue stream for charities is coming under some pressure, and we believe that it is essential to understand the way that donors are choosing to engage so that charities can design fundraisers that maximise that engagement,” Ms Fell said.

“For instance, with 38% [of all donors] who give when they hear about a need or an issue, it’s important to not rely solely on annual campaigns, in terms of engaging them but exploring how to amplify the cause and provide multiple opportunities for people to respond throughout the year.”

Ms Fell made the comments during the online launch of a new McCrindle research report, Empowering Impact: Understanding giving behaviour, volunteering, and advocacy in the not-for-profit landscape.

The report found that an increasing number of charitable givers are cause-driven and choose to give on their own terms - responding on a needs basis rather than committing to a single organisation.

Key findings include:

• Five out of six Australians (84%) donate to charities or not-for-profits
• Generation Z are more than three times more likely than Baby Boomers to advocate and raise awareness about a specific issue or cause
• Boomers are five times more likely than Generation Z to volunteer at least once a week
• 30% of donors have volunteered for a charity in the past 12 months, down slightly on 33% in 2020
• Older donors (64%) prefer to donate to established charities or NFPs while 61% of Gen Z favour donating to start-ups they consider “disruptors.”

The report found that younger generations are more likely than their older counterparts to be opportunity givers, with 65% of Gen Z in this category compared to 49% of Baby Boomers.

More than 60% of Gen Y (aged 30-44) and 56% of Gen X (45-59) also favour opportunity giving.

More than half (51%) of Baby Boomers, however, are considered committed givers, compared to just 35% of Gen Z.

“I’ve been speaking to a few NFP leaders over the past few weeks and it’s a really interesting landscape to be thinking about with regards to engaging these younger generations of donors,” said Ms Fell.

She said one question she had been asked consistently was difficult to answer:

“Is it worth engaging with these younger people when they’re not giving in the same ways and are in some ways not as engaged or committed as older generations who many organisations and NFPs rely on for that committed, consistent behaviour?”

“Our [McCrindle's] definite belief as an organisation is, even though it’s hard, yes it’s definitely worth it.”

Ms Fell said while younger generations are more likely to be opportunity givers, this does not mean they give less frequently or are less generous than their older counterparts.

The report revealed Gen Z donors are more likely than Baby Boomers to give at least monthly and are more likely to have donated $200 in the past 12 months.

Generation Y, who are in their prime years in terms of earning capacity, are also more likely to be generous with two out of five (41%) donating $200 or more in the past year.

“As we think about these donations especially in regard to younger givers, we have to keep in mind that these donations are ... often spread among different charities and a greater variety of charities than the committed giver who might be more committed to one or two organisations,” said Ms Fell.

She said this again highlighted the challenge for charities in deciding where to spend their limited resources.

“Do you focus on a smaller proportion of committed givers and higher value givers or engage numerous smaller givers?

“Of course, there are risks associated with each of these options, but engaging the future donor to ensure the long-term sustainability and viability of your organisation, is essential we believe.”