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It’s All About the Relationship: How Nonprofits Can Better Engage Next Gen Donors

Thursday, January 25, 2018   (0 Comments)
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Future” by Pfauenauge

Having survived yet another frenzied December giving season, we usually find ourselves in the new year reflecting on that end-of-year charitable scramble and what it means for the bigger picture. Unfortunately, these reflections can slide toward the negative. Both our holiday gift exchanges and our year-end giving can feel very transactional. And while these gifts are vital for nonprofit sustainability, are they good for philanthropy writ large and long-term?

More specifically, what do they mean for a philanthropic sector undergoing dramatic generational changes? Should we be looking to change our patterns to attract those rising big givers commonly known as “next gen donors”?

We recently talked to a major donor in his mid-thirties who wrote a five-figure check to a large nonprofit in 2016. He tried to engage more closely with the organization early in 2017 but was disappointed in his interactions with staff. After offering to give his time and expertise as well as his money, he hadn’t heard a word from the nonprofit for six to nine months—until, that is, he got a generic “please renew your gift” year-end email in December. It was like getting a bill in the mail.

We’ve heard many similar stories in the course of several years of research with Gen X and Millennial major donors—research that we describe in our book Generation Impact: How Next Gen Donors Are Revolutionizing Giving. Big donors in their 20s and 30s want more than a monetary transaction; rather, they want to play a meaningful role by giving their time and talent as well as their treasure. They want to be seen as more than an ATM or a last name on an annual giving list.

And while the consequences of this might put an unwelcome burden on nonprofits, it is imperative that nonprofits think hard about how they engage these rising big donors, for they will soon be the most significant donors in history. Next gen donors will have more money to give than any previous generations, and they want to give that money in new, more hands-on ways. Moreover, they want to start this giving now, moving quickly into their roles as the core supporters of nonprofits—a role they will play in even bigger ways over the next several decades. If done right, their approach to giving might in the end mean more effective support for the causes we all care about, and more positive impact on the problems we all share.

One donor profiled in Generation Impact, Jenna Segal, illustrates the sort of relationship these Gen X and Millennial big donors seek with the groups they support. A Broadway producer and women’s advocate, Jenna during her thirties actively sought out bigger philanthropic roles in several nonprofits. She learned to look for groups that took her ideas for innovation seriously and to avoid those that just put her on the board or sequestered her on a fundraising committee with other women.

Jenna observes, “There are very few young people I know who write big checks who don’t want some kind of substantial involvement with the organization to which they’re writing that check.” By “substantial,” she means involvement that fits the skills the young person has to give and advances the core work of the organization. Like many of her next gen donor peers, Jenna is full of ideas for how nonprofits can try to enhance and extend their impact. Unlike many of them, she is keenly focused on reviving traditional institutions, helping them better engage younger stakeholders and refreshing their programs. But this doesn’t always play out well:

I look for organizations that are not resistant to change. I ask, “Would you be willing to try this new idea or that?” and if the first answer I hear back is, “That wouldn’t work here because…” I see they might not be as open to new ideas nor a fit for my approach to funding.

[Or] I hear executive directors and development professionals say, “We’ll take a look at that,” and then I never, ever hear back from them. Even if the answer is a disappointing one, like “Here’s why we don’t think this will work for our organization,” that at least communicates that you have respect for the person you are soliciting and that you care and have spent time thinking about what it was that they wanted to contribute.

Next gen donors like Jenna don’t want their name on the building so much as they want to be inside the building, sleeves rolled up, working closely with the staff and other volunteers. They want to learn what organizations really need, to hear about real problems and then be part of the team that figures out how to solve those problems and advance the organization’s mission. Of course, this means a different approach to engaging big donors than nonprofits are used to. It also requires more staff time and organizational resources to build and nurture the sort of close, candid, and active relationship these donors crave.

But this extra work can pay off, both in terms of the amount and the quality of contributions from next gen donors. They insist that developing good relationships leads them to be bigger and better donors—donors who serve as engaged partners, who learn what organizations really need (like operational or capacity building support), and who give more money over more years. But again, getting to this deep relationship takes time and effort. As Jenna Segal says, “With next gen donors, it is a marathon, not a sprint.”

Nonprofits are right to worry about the implications of this new approach to giving from the donors who will be their biggest supporters in the years to come. But those who can find a way to retool their donor engagement strategies and take advantage of the positive aspects of how the next gen want to give can build relationships that grow and sustain the organization for a long time.

How can you start building these relationships with next gen donors?

  • Don’t wait. Start now. Building trust takes time.
  • Get creative. Devise ways for rising donors to give their time and talent meaningfully, ways that fulfill donors but also help the organization.
  • Become more transparent than you might find comfortable. Think of your next gen donors as partners in the accomplishments and the challenges, as supporters who can help expand the former and address the latter.
  • Be open to new ideas. Invite next gen donors to explore those ideas with you.
  • Focus more on relationships than transactions. Don’t just wait and send a year-end solicitation without some meaningful interaction with a major donor first—a phone call, at least.

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About The Authors

Michael Moody helps people appreciate and navigate today's complex landscape of giving and social innovation. He holds the world's first-ever endowed chair for family philanthropy, the Frey Foundation Chair for Family Philanthropy at the Dorothy A. Johnson Center for Philanthropy at Grand Valley State University, and is a well-known writer, speaker, and commentator on the vital role that the nonprofit and philanthropic sector plays in our lives.

Sharna Goldseker is a speaker, writer, and consultant who engages multiple generations in the intersection of values and strategy to transform the ways in which they give. As executive director of 21/64, the nonprofit practice she founded to serve philanthropic and family enterprises, she offers retreats for next gen donors, trainings for professionals on multi-generational advising and next gen engagement, and has created the industry's gold-standard tools helping families to define their values, collaborate, and govern.

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