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Why Baby Boomers Are Upending The Fundraising Landscape

Posted by Kn Moy on 3/3/17 10:15 AM

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This is an era of great uncertainty for fundraisers. As one career fundraiser recently said to me, “Nothing works like it once worked. It’s like the ground has shifted under my feet, totally upending things as I once knew them.”

If you look across today’s marketplace, what marketers do to engage customers has changed almost beyond recognition compared to a decade ago. Apart from information technology, it’s hard to find another discipline that has evolved so quickly. Tools and strategies that were cutting-edge just a few years ago are quickly becoming obsolete. New marketing approaches are appearing every day.

Yet, if you’re the average fundraiser, you’re probably fundraising the same way you fundraised in the last century, except that you’ve added another fundraising channel — the Internet.

Today, the average fundraiser is asking more and receiving less — and watching every fundraising success metric continue to decline.

Why Has Fundraising Changed?

I can answer that question in five words… “the Baby Boomers are here.” They are now America’s largest adult generation, numbering almost 80 million when you account for immigration. More importantly, Boomers are America’s wealthiest and most generous donors, giving almost half of all dollars to charity. (Millennials, America’s largest youth generation, account for just over 10 percent of all dollars given to charity.)

  • Boomers are 25 percent of the U.S. population but control 80 percent of all wealth and 70 percent of all disposable income. More Boomers today make over $100K than any other American generation. And, for the next 15 years, Boomers will continue to control most of the nation’s net household wealth. In that same period, Millennials share of net household wealth will only grow to 16 percent by 2030, from 4 percent in 2015.

  • Boomers are a massive audience. At the height of the most recent recession, just over 52 million Boomers gave financially to charity. This represents over 25 million more donors than all of the direct-mail-loving Elders and Traditionalists combined. And, those elder donors are dying off at the rate of 15K per day or 5.4 million annually. Boomers won’t start dying off at that rate for another two decades.

  • Boomers are giving a third more dollars to charity than the elder donors today… one-third more dollars! They spend more than any other American generation, and they are giving more than any other America generation. Today, Boomers account for 78 percent of all online purchases, 70 percent of all dining out dollars, and 80 percent of all dollars spent on travel. They spend 5 times as much as Millennials… and they give 5 times as much as Millennials.

Everything Is Changing

The Baby Boomers are changing everything. They are the reason that last-century fundraising approaches that worked effectively for their direct-mail-loving parents, the Elders and Traditionalists, are not working as well today.

Boomers are simply not being activated and sustained as donors in the same ways their parents were. For example, only 11 percent of donors today are acquired through a single solicitation. When direct mail success rates were at an all-time high, that number was over 80 percent!

Yet the average nonprofit organization today continues to use last-century, interruption-based marketing approaches to reach this next generation of donors who have largely turned their backs on last-century approaches. Certainly there are some new technologies and new channels, but how we do fundraising — the basic fundraising model of “ask for money, ask again, and keep asking” has not changed in over 80 years.

The incessant, interruption-based, transaction-centered, asking-for-money fundraising approaches of the last century are just not working for today’s Boomers!

In fact, traditional fundraising approaches have become a huge turn-off for the Baby Boomers — the first American generation to grow up surrounded by marketing, that always knows when they are being marketed to, and hates being marketed to!

The Boomers Are Upending the Fundraising Landscape

I’ve been studying the Boomer phenomenon for more than a decade. Boomer attitudes and behaviors have always caused them to have a deep-seated dissatisfaction with the status quo. They have always found ways around, through, and almost always away from the status quo. This has been true across every life stage for the Boomers.

As I have studied Boomers in their natural, everyday, real-world lives — this is known as ethnographic research — I have discovered the following:

  • When Boomers come home after a day of work or play, almost no Boomer will ever ask “what came in the mail?” It is evident that direct mail no longer plays a central role in the lives of Boomers, as it did for Elder and Traditionalist donors. Instead, like their children, the Millennials, Boomers live in a mobile-first world. When they leave their homes in the morning, the first thing they think about is “is my mobile with me?” Five years ago, Boomers were more likely to think about their wallets and their keys. Today, their lives revolve around their mobile devices.

  • Because the majority of Boomers are now living digital lives where their important life transactions, like paying bills and staying connected to loved ones, etc., are all online, they generally believe that direct mail is more and more comprised of advertising and junk mail.

  • Even as direct mail no longer plays a central role in their lives, there is one day of the week, however, when Boomers do think about direct mail. Can you guess what day of the week that is? Typically, Boomers think about direct mail the day before the trash truck comes. That’s generally the one day of the week when Boomers cull through their mail pile.

  • If your organization is fortunate enough to be one of the three-to-five charities that the average Boomer donor supports, Boomers may pull your direct mail solicitation from their weekly mail pile, and spend time with your solicitation.

  • Interestingly, for Boomers, direct mail is still the best solicitation “trigger.” After all, Boomers grew up with direct mail. A recent Temple University study confirms that direct mail tops digital media for engagement time, recall, and ultimate giving. But today, instead of responding through direct mail, the majority of Boomers are making their donation online when “triggered” by a direct mail appeal. (This is up from just over a third of donors just five years ago.) This is the same behavior when Boomers receive a printed consumer product catalog in the mail. They almost always go online to purchase catalog products.

A Defining Moment in Fundraising

Clearly with Boomers, we are at a point of inflection, a defining moment in how they are choosing to behave as donors. The last-century approaches in fundraising — when direct mail success rates were at an all time high — are no longer working as well as they once did because transaction-centric, interruption-based approaches aren’t relevant for the Boomers. Those old ways of doing things focused on asking donors to give out of a sense of duty, obligation, or guilt, and asking them to give again and again. The focus was on the transaction, on what the donor can do for the organization.

The focus was not on what the organization can do for the donor — and on the relationship with the donor! (The first question nonprofits must always answer for Boomers is “WIIFM?” What’s in it for me? That question has defined the Boomer experience across every life stage. For Boomers, “me” takes priority over “we.”)

Study after study today confirms that Boomers don’t just consume or transact with the charity brands they follow. They actually want to engage in a relationship with them. Boomers have a deep need to bond and form connections as they age. It’s how they get their satisfaction in life. They don’t want to be treated like cash machines.

Engage Boomer Donors Consistently and Meaningfully

So, just how do we create faster, better, and more sustainable revenue and, at the same time, address the central Boomer question, WIIFM?

The answer is creating more donor engagement for the Boomers — not finding more opportunities to ask for money. This is a game-changing shift in marketing. In fact, I believe that nonprofits will need to learn to significantly decrease the number of times they ask for financial support and increase the number of times they engage donors meaningfully.

In the long run, our research is demonstrating that this is the formula for actually increasing overall donation revenue. Boomer financial giving flows from more meaningful engagement, rather than the incessant asking for money that is creating churn and burn faster than ever with Boomers. (It’s the reason that 75 percent of first-time donors never give a second gift.)

What Does Boomer Donor Engagement Look Like?

Over the past decade we have learned that meaningful donor engagement is defined by a wide range of donor interactions that create emotional attachment by deepening your donors’ passion for your cause, and their relationship with your organization, before calling on donors to act by giving time, talent, and treasure.

This requires talking to donors and constituents in a new way — as if you are a brand not asking constantly for money, but inviting people to become part of the solution by joining a community to change the world — leveraging a content strategy that relies on high-quality storytelling, near-total transparency, and emphasizing the impact of the donor and the donor’s gifts.

Donor engagement interactions that deepen their passion for your cause and their relationship with your organization ultimately bring donors more meaning and value in such a way that Boomers tend to view their giving, financial or otherwise, as lifestyle choices on par with work and their spending.

Preference-driven Rather Than Needs-driven

In fact, recent research demonstrates Boomer charitable choices may be largely driven by their own inclinations and preferences, unlike Elder and Traditionalist donors who gave to meet needs. Remember: “me” has replaced “we.”

Boomers support causes that mean something to them, rather than supporting charitable organizations that meet the most urgent needs. (Elder donors who gave to meet needs supported 12 to 15 charities on average. Boomers only support three to five charities on average.)

The importance of donor preferences and tastes are largely absent from most fundraisers’ strategic calculations and from their entreaties to encourage greater giving. Most fundraising appeals today tend to focus on the importance and urgency of the cause, rather than on the passions and preferences of donors. Today meaningful donor engagement is much more about the latter than the former. It is more about what donors value than what the organization needs.

This Is the Age of Engage

The behavioral economists at Gallup believe that engagement is THE definitive predictor of growth in our marketplace today. Aggressive marketing may get donors through the door — but it doesn’t create the emotional connections and relationship that drives long-term profits and loyalty in both good and bad economic times.

Engaged donors give more, give more frequently, and give over a longer period of time to your ministry. They will not only give money, but will also volunteer, and lend the force of their own social networks to a cause they believe in and an organization they trust.

Ultimately, we believe that meaningful donor engagement will reshape charitable organizations from the bottom up. Meaningful donor engagement will require a new fundraising model, one that does not incessantly ask for money, but focuses on bringing more meaning and value to their donors.

The World Is Changing. Our Donors Are Changing.

It’s time to rethink fundraising. Instead of the transactional approaches of the last century, start taking actions to inspire and engage prospects and donors in a way that puts relationship first in today’s marketplace. When you do, you’ll drive up the number of engaged donors to your ministry — so that you can reap the benefits of greater growth and profitably.

Do your donors find your emails engaging? Watch our next webinar to learn best practices for increasing email performance and response rates.

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Kn Moy

Written by Kn Moy

Kn Moy has over three decades of experience as a marketing strategist with a focus on innovation. He recently transitioned from his “futurist” role as the Senior Vice President of Strategic and Applied Foresight at the nation’s largest agency serving faith-based charities. He is now the Senior Fellow for Philanthropy Innovation at the DXM Institute for Changemaking Innovation and presents far-and-wide on engaging the next generations of donors and volunteers, including keynoting at this year’s DMA D.C. Nonprofit Conference and recently at the Big Ten Alumni Relations Institute (BTARI) of the Big Ten Conference. Kn can be contacted at kmoy@masterworks.com.

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In this weekly blog we share tips, tactics and case studies for professionals in the Catholic fundraising community. Learn how to advance your mission with articles on technology, donor engagement, nonprofit leadership, social media, and emerging trends.

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