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A new mindset changes donors' relationship with philanthropy

The up-and-coming generation of changemakers is challenging the very way we think about philanthropy and incorporate giving into our lives. The dominant attitudes that donors bring to philanthropy—their motivations, priorities and views—are quickly changing as Millennials bring their unique experiences and behaviors to the table. And the tide will continue to shift as Millennials take up a more significant role in philanthropy. 

Research findings

1.  The idea of who can be a philanthropist is undergoing a transformation.

Although the term philanthropy comes from the Greek phrase “love of humanity,” it has long had associations with wealth and privilege—but younger donors show a marked shift in their idea of what philanthropy means. Nearly three-quarters of Millennials would call themselves philanthropists—compared to only 35 percent of Baby Boomers—illustrating the younger generation’s more inclusive definition of philanthropy. Millennials’ broad self-identification with the term indicates that they are rejecting those traditional associations and understand the term to apply broadly to anyone giving time, talent or treasure to make the world a better place. 

"I consider myself a philanthropist."

Total

45% of donors overall say they consider themselves a philanthropist.

Baby Boomers

35% of Baby Boomer donors say they consider themselves a philanthropist.

Gen X

 48% of Gen X donors say they consider themselves a philanthropist.

Millennials

74% of Millennial donors say they consider themselves a philanthropist.

2. Donors’ reasons for giving are shifting from external motivations to internal motivations.

Baby Boomers’ philanthropy is more likely to be motivated by the nonprofits they support and how the cause resonates with them, but Millennials’ motivations are tied back to their strong social conscious and how they see themselves as philanthropists. Both generations believe they have a responsibility to give back—but Millennial donors are also fueled by their belief in their own ability to be a force for good and their desire to make social change core to how they live their lives.

Volunteers picking up trash

Top  three reasons Millennials give to charity

"I can make a difference with my donations."

“I have a responsibility to give.”

“It helps me live a life that reflects my values.”

Top three reasons Baby Boomers give to charity

“The nonprofits I give to are trying to solve important problems.”

“I have a responsibility to give.”

“I am personally connected to the cause or I know people personally impacted by the cause.”

3. Donors are increasingly focused on how their donations influence specific outcomes.

Younger donors have great expectations of themselves to do good, but they also have high expectations of the organizations they support. Not content to contribute money and sit on the sidelines, younger donors view a donation as an investment in a solution to a problem they see—and therefore have an increased focus on the demonstrated effectiveness of the charities they fund. Millennials also place value on authenticity and transparency when choosing the brands and organizations they support, and they are likely to shift their dollars elsewhere if they don’t see real impact.

"I track results for most or all nonprofits I support."

Total

39% of donors overall say they track results for most or all of the nonprofits they support.

Baby Boomers

32% of Baby Boomer donors say they track results for most or all of the nonprofits they support.

Gen X

40% of Gen X donors say they track results for most or all of the nonprofits they support.

Millennials

66% of Millennial donors say they track results for most or all of the nonprofits they support.
People packing canned food into boxes

How Millennials measure the effectiveness of organizations they support

38%

Read letters and reports from the organization

37%

Pay attention to news about issues related to charities

36%

Talk to friends or advisors about the organization

35%

Frequently visit their website/social media channels

33%

Read the organization's annual reports

"When you have less money to give, you think about where each of those dollars goes and want to make sure your impact is really high. [Millennials] want to see where their money is going, which can be very painful to nonprofits—especially small ones—who don’t necessarily have the resources to give that constant feedback."

 

-Rachel Klausner, Founder and CEO, social impact platform Millie

4. Younger donors pay close attention to their peers, and they become ambassadors for their favorite causes.

Millennials understand that making a financial donation is just one way to support a cause. Sharing and advocating for causes can be just as valuable—whether it’s through a Facebook birthday fundraiser or the #IceBucketChallenge. They may not be able to afford large donations, but Millennials have embraced the power of their voices; every post and interaction is an opportunity to plug in to something bigger and make more of a difference. And this peer-to-peer sharing has a strong influence on how they make their own financial donations. Younger donors are much more likely to learn about and respond to causes via social media.

Peer influence in giving

Generations Legends
33% of donors have encouraged their friends or family to donate to the same cause. 43% of Millennials have, compared to 39% of Gen X and 26% of Baby Boomers.

Encouraged family/friends to donate to the same cause

39% of donors have told friends or family about an organization or cause they donated to. 43% of Millennials have, compared to 42% of Gen X and 36% of Baby Boomers.

Told friends or family about an organization/cause you donated to

24% of donors have made a donation after learning about a cause or organization on social media. 40% of Millennials have, compared to 27% of Gen X and 18% of Baby Boomers.

Made your donation after learning about a cause/organization on social media

25% of donors have donated through social media to support a person they do know. 39% of Millennials have, compared to 29% of Gen X and 18% of Baby Boomers.

Donated through social media, showing support for someone you DO know

14% of donors have donated through social media to support a person they do not know. 28% of Millennials have, compared to 18% of Gen X and 9% of Baby Boomers.

Donated through social media, showing support for someone you do NOT know

Generations Legends

"If you see a lot of your friends giving to a cause, that will highly impact your decision to get involved in a cause as well. To create a culture of change and cooperation, we need social reinforcements of those norms. If you see it, you can believe it. And if you believe it, you’re going to do it."

 

- Steven Olikara, Founder, Millennial Action Project

Donor loyalty to large, established nonprofits could become a thing of the past.

Millennials are more attached to their values than they are to specific institutions. With donors increasingly paying close attention to a nonprofit’s results, organizations could lose donor support if they are unable to show specifically how their contributions are making a real change. Donors can simply redirect their funds to one of the multitude of organizations working in the same cause area. At the extreme, nonprofits face the risk of getting “canceled” if they are seen as doing anything donors don’t agree with—from mishandling funds to failing to be sufficiently equitable and inclusive. 

Peer-to-peer influences could broaden donors’ giving behavior—and create additional social pressure to participate in philanthropy.

As social media amplifies a user’s every activity, their friends and followers are influenced to follow suit when they donate to charity. But as the endless stream of new posts inspires donations from Millennials, their giving could be less focused and more fragmented across a wide variety of issues.