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Demographics

Get Me Some Young Donors Right NOW!

Chances are, the average age of your donors is notably high. That’s how it is for almost every nonprofit on the planet. It’s a result mainly of the way the human brain works, often enhanced by economic and cultural forces.

It’s normal and natural. Even so, I’ll bet someone in your organization has cried:

Our old donors are dying!

Followed by an equally panicked cry of:

We’ve got to replace them with young donors!

Both of these cries are understandable. They’re even somewhat reasonable. But the whole thing goes off the rails when someone interprets our need to replace donors with young donors to mean:

Let’s focus on Millennials!

That’s a bad leap of logic. It might seem that a path to survival is to replace your dying 89-year-olds with healthy 29-year-olds.

But it’s not.

First, while it’s true elderly people are rather more likely to die soon than non-elderly people, a lot of folks in their 60s through 80s have a many good years ahead of them still. Don’t count them out yet! Life expectancy is longer than ever.

And here’s the more important part of the equation: The “young donors” you should be focusing on are people in their 50s — and in some cases, 40s. People who are approaching old age.

Those 29-year-olds often tempt us because they can expect more decades. And there are a lot of them — the Millennial generation is the largest generation in US history, outnumbering even the Boomers. But there are a few problems with them:

  • The media channels you use to reach your current older donors simply won’t reach many people in their 20s and 30s. They aren’t on the mailing lists, and they don’t consume the same media. It will take a heavy investment in time and money to discover the right lists and channels to find them in this fast-evolving media landscape.
  • The messaging that’s working to get and keep donors has been honed on your current audience of older people. There may be some serious re-learning to do before you find what works on the young.
  • If you managed to learn both of those things, you’d quickly notice that you have created two separate donor groups: Your old donors and your young donors — and they need separate marketing approaches. Congratulations: You’ve just doubled your fundraising budget, while at best only maintaining revenue. But you won’t maintain revenue, because…
  • Young donors have abysmal retention rates. Typically fewer than 10% ever give to an organization a second time. (You can expect 25% to 50% of older donors to give subsequent gifts.) Your acquisition investment has to be two to five times as much to end up with the same long-term revenue. For most organizations that would be unsustainable and irresponsible.
  • The most effective way to get younger donors is face-to-face (street) fundraising. The average age of these donors is decades younger than direct mail donors. But even here, it’s the donors in their 40s and 50s that make it all work. The retention rates of those younger is not strong enough to make it the program viable.

Those almost-old people in their 50s, on the other hand, give you some significant advantages:

  • Their average gifts are higher than those of older donors.
  • Their retention rates are good — not as high as those of the elderly, but far better than those of the young.
  • The combination of their higher giving and decent retention causes them to have a higher long-term value than older donors.
  • They respond well to similar messaging and channels as older donors — that is, you can add them to your program, no need to create a whole new track to acquire and cultivate them. (They’re similar, but not identical; you have to keep your eyes open!)
  • They are online-savvy, which allows you to take advantage of the lower costs and greater flexibility of digital fundraising.
  • There are a lot of them. They out number their elders.

If you think a focus on people in their 20s is an investment in the future, consider this: With retention rates that are a fraction of those of older donors, virtually zero donors in their 20s that you acquire today will still be with you 30 years from now when they mature into acceptably retaining donors.

Investing in Millennial donors today is the equivalent to converting your retirement nest-egg into $10 bills and leaving it in a pile on the beach.

Millennials will start turning 50 in 2030. Not that far off, really. That’s when focusing on Millennials will become an existential necessity for nonprofits.

For now, focus on the almost-old. They’re the ones with the passion — and the capacity — to take your organization to the next level!

Related posts:

Looking for help on reaching that important not-quite-elderly-yet demographic? Look into Moceanic’s Coaching+. We’ll work with you and help you create and execute a strategy that will build a solid future!

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My Biggest Fundraising Disaster: The Sad Tale of the Cynical Humanitarians
Demographics

My Biggest Fundraising Disaster: The Sad Tale of the Cynical Humanitarians

Is your organization looking for a fundamental, game-changing shift in how you raise funds?

I wish you the best. I hope you find it.

But let me tell you something not to do in your search for transformation by sharing the sad tale of the Cynical Humanitarians.

A nonprofit I worked with hired some Brand Experts and told them, “Our fundraising works, but we hate it. It’s tacky. We’re embarrassed to show it to our friends. Please give us a brand that we’ll love — and that raises the funds we need.”

The Brand Experts knew exactly what to say: “It’s not your fault; it’s your donors. They’re too old. Too uneducated. Too down-market. We’ll do the research and find the demographic segment you deserve. They’ll respond to marketing you’ll feel good about.”

They came back three months later with an impressive volume of research. They’d discovered a slice of the Great American Pie that they called “Cynical Humanitarians.”

I was at the meeting. The Cynical Humanitarians were urban, educated professionals in their 30s and 40s, well traveled, and not likely to respond to traditional fundraising methods or media. (“They’re too smart for direct mail,” the report noted.) There were tens of millions of them, clustered in cities and on the coasts. They were frequently missed by traditional fundraising because they were too cynical for it. And too smart.

They didn’t show up on anybody’s fundraising radar because they didn’t give to charity in meaningful numbers. They weren’t on rental lists, and they didn’t spend time on nonprofit websites. Those things didn’t reach them. They were simply waiting for a new type of fundraising to unlock their generosity, the Brand Experts explained. We were going to be there first.

I’m used to thinking about donors in an almost anthropological way. Maybe you know what I mean. It’s as if we quietly visit their community and take notes, searching for patterns and truth.

This was different. As the Brand Experts described the reading and entertainment habits of the Cynical Humanitarians, I got the strangest feeling: They were describing me! I read those magazines! I listen to NPR! I feel that way about politicians! Just like the Cynical Humanitarians, I want to make the world a better place but suspect that many attempts to make things better don’t really work. I ignore advertising because I think it’s either irrelevant, stupid, or a pack of lies!

The Brand Experts were describing not only me but most of the people in the room. Who knew? We were all Cynical Humanitarians.

It was an exhilarating feeling: Donors we understood. Donors who would not present us with inexplicable tastes or unfathomable attitudes. Donors whose thoughts we could divine — because their thoughts were our thoughts. We knew our donors.

Of course, it would take radically different messaging and whole new channels to reach the Cynical Humanitarians.

And our new approaches and channels would never reach or persuade our current donors and prospects. But that was the genius of it. Out with the old! In with the new!

Fast-forward a few months.

Everything we did to reach the Cynical Humanitarians failed — all the Brand Experts’ recommendations, as well as many other attempts we cooked up to try and rescue the project. Not a single project came even close to working.

Everything. Failed.

When things go wrong in fundraising, they usually go slightly wrong. Response dips by 10%. Average gift slides a couple of dollars. Not here. This was dramatic, record-breaking failure. Several of my own personal worsts happened during the Cynical Humanitarian campaigns.

In the end, we’d netted ourselves about 100 Cynical Humanitarian donors — at a net cost of thousands of dollars per donor. To put that in perspective, in a normal year, we brought in several tens of thousands of new donors at a small net cost each. If that weren’t bad enough, we eventually found that 85% of these new donors never gave another gift. Their retention was less than a third of that of our old donors.

Within three years, there were probably two or three of our Cynical Humanitarian donors left. No, not two or three thousand:  Two or three.

Apparently, the Cynical Humanitarians were too cynical to be donors. And too young. They had all the hallmarks of people their age: unresponsive to fundraising, even messages tailored to them and presented in their preferred channels, and far less likely than traditional donors to stick around and give again. (If you think your donor retention rates are dangerously low, try fundraising from young donors and watch those numbers drop by as much as half.)

We switched back to our old-faithful donors — the ones who responded to the fundraising everyone hated — and began a years-long climb to recovery.

The cost of the Cynical Humanitarian experiment was millions of dollars if we took into account the value of the donors we didn’t get while we were chasing the dream demographic.

There’s a diabolic cleverness to the all-new-donors ploy. It feels so right. So exciting. In theory, it could work. But the chance of success is microscopic, and the consequence of failure is devastating.

Do you want to succeed in fundraising? Learn to love the donors you have. Find better ways to reach them and make them feel connected and important. When you’ve maxed out that group of donors, then start looking for new groups.

And most of all, unless your staff is made up entirely of church-ladies in their 70s, don’t base your experimental messaging on what insiders like.

(This post is excerpted from The Money-Raising Nonprofit Brand by Jeff Brooks.  The anecdote is true, but numerous details are altered to protect the identity of various innocent and guilty parties.)

Have you been through similar disasters? Please share your experience by leaving your reply below. We’d love to learn from your experience.

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Pop Art Millennials party dancing e1521411436406
Demographics

What Millennials Can Do for Your Organisation (or rather, What Millennials Can Do TO Your Organisation)

What’s the best way to get donations from people under 40 years old?

Wait until they are over 40.

No, I’m not making a joke.

With rare exceptions, people under 40 are not a priority for fundraising approaches. They are hard to find, harder to persuade to give, and extremely hard to keep as ongoing donors.

Even face to face (street fundraising), which is squarely aimed at Gen X donors, finds that older Gen X donors give more than their younger Gen X peers.  That is, 45-year-olds give meaningfully more than 35-year-olds, and they stay with their organisation longer.

You’ve probably heard the belief that we should acquire donors while they are young — because that will make them more likely to support us when they get older. That’s not entirely flawed. But if you just step back and think about it logically, it doesn’t quite hold together.

Say it costs $50 to acquire a new donor, regardless of age. (Actually, younger donors cost more to acquire, because they’re less responsive.  But we’ll put that aside for now.) The older donors you get will be worth more in almost every possible way. They’ll have:

  • Higher average donation
  • Higher second gift rate
  • Higher retention (especially in monthly giving)
  • Higher amounts raised (in events)
  • Higher chance of supporting an event again
  • Higher lifetime value
  • Higher chance of putting you in their will… and a very much higher chance of realising that legacy sooner
  • Higher chance of becoming a major donor
  • Higher chance of responding to most of your communications

Now if you’re thinking, “We’ll just keep those younger donors until they age into the higher value category.”  It won’t happen. Donors simply don’t stay with charities for multiple decades. Even older donors have a typical life-cycle with any given organisation of 7 to 10 years. Younger donors much less.

So the “get them young” plan goes like this:

  1. Spend more up-front to get them.
  2. Get less revenue from them.
  3. Lose them sooner.
  4. Then re-acquire them about 20 years later when they age into typical donor age.

It’s a terrible deal!  Skip the first three steps and go right to the fourth one.

However, that does not mean you shouldn’t communicate with younger people.

Think of it this way: Older people almost certainly donated more in the Ice Bucket Challenge of a couple of years ago than did younger people – even though there were likely fewer of them giving. But those older donors would never have known about the Challenge if it weren’t for all that fervent sharing by millennials.

Millennials can also show up at events in large numbers, and essentially be your “foot soldiers” when you want to get a lot of publicity. They just don’t consistently make the kind of donors we need.

This seems to apply in most countries, but just recently I was shown data on public fundraising in China. About 50% of the donations through Chinese social media platform, WeChat, came from 27-37 year olds.

This opens a new question for us all: in emerging fundraising countries, like China, will what we think of as fundraising ‘facts’ remain the same!?

Please share your experience with young donors by leaving your reply below. We’d love to learn from your experience.

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TrendsBrandingDemographicsDirect MailDonor Love

Thank You For ‘Hanging Out’ With Me

By reading my articles, I guess you care about making the world a better place and raising more money for the causes you care about.

I am chuffed by the feedback I get from my updates (please send more – just nice ones before Christmas) and I hope they are directly useful.  Thank you for reading.

I subscribe to dozens of such updates, and it is hard to decide which ones to allow into your inbox.

Maybe it will help you if I share some of the fundraising updates I find most useful, and why.

Today, I’ll start with the one I read the most.  Partly because it is the most frequent, partly because the updates are short, but mainly because each update cuts to the chase and is based on real data and evidence.

161214-thank-you-for-hanging-out-with-me

Jeff Brooks www.futurefundraisingnow.com

Subscribe to that, and you have a decent Christmas present from me. And if you already subscribe, you know you’re getting a gift from Jeff in your email inbox almost every day.

Sean

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DemographicsDirect Mail

The Digital Fundraising Tipping Point

Why is the this the first fundraising article featuring Matt Damon and Rachel Weisz, Simon Pegg and Uma Thurman, Naomi Campbell and Sean Triner?

It is not that they are all fundraisers.  Nor is it the case that they have all dated each other. (I know that’s what you’re thinking).

The coincidence is a pure accident.  They were all born in a year significant for digital fundraising.

It is likely that their first computer, like mine, looked something like the ZX81.  It had 1K memory and tiny resolution.

It was the first affordable computer you could buy for £99.

sinclair

Inspired by this device I have been ‘into computers’ and things digital ever since.

A big gamer, sometimes I feel life, work, and outdoor play are just things I have to do in between gaming.

I am a digital dude, an early adopter happy to yarn about the latest trend, an early tweeter, blogger, Skyper and I give all my charity donations online.  I only read (and have written) ebooks.

Born in the same year as those five celebrities, I am part of the first generation of computer consumers.

I am more excited about digital than anything else in fundraising.  It won’t totally replace mail, phone and face to face but it is already integrated in all.

Whether supporting mail appeals, helping generate leads for phone or welcoming a new face to face donors, digital is everywhere.

It will undoubtedly be the biggest channel of fundraising and will drive most innovation and excitement in fundraising over the coming years.

However, fundraising is ultimately about donations; typically aiming for maximum net income from fundraising investment. And so that is where I am obliged to bring in data.

Here is my theory.

The mean age of a ‘classic’ retained donor seems to vary between 64 and 74 in every country where I have looked at enough data.  Of course, this may vary by charity and is influenced by the techniques used to acquire the donors.

Online-acquired donors, for example, tend to be much younger.  But there are not enough of them to influence the average by much.  A larger pool of donors is face to face.

When we look at face to face acquired donors we see the average age is much younger.  The mean age in Australia of retained face to face donors is around 42.

Face to face has had huge growth here for over a decade, and it dominates fundraising for some charities. But across the sector face to face only brings the average age down into the 60s.

 

donor chart

Why is this relevant to digital fundraising and a celebrity list with me added to the end?

All five celebrities, plus me, were born in 1970 and, given a normal life, all would have graduated from college around 1991-1993 (Only fellow Brits Simon and Rachel graduated – Naomi, Matt and Uma were already established in their careers by then).

phone

If you started normal work in the early 90s, you may not have realised but you were on the tipping point of a revolution.

Give or take a year or so, depending on country and employer, people starting office jobs in the 80s didn’t have a computer on the desk.  People starting in the 90s did.

I was soon the cusp I did a maths degree with a fx 7000G calculator.

But within a year of work, I was tapping away in spreadsheets, realising that fundraising was all about understanding the numbers.

Most people born in (and around) 1970 were the first generation of office workers who have always worked with computers.

And we are around 46-47 right now.  Except for face to face giving, we are simply not of donor age.

People born after 1970 (statistically speaking) don’t donate much.  And then, when we do, we are less loyal – younger folk attrite quicker than older people and give less.

chart1

Don’t panic though.  Twenty years ago, younger people didn’t give either.  But when they got older they started to become more generous.

My theory is that people my age now will be giving as much as people in their mid-sixties do now.  But because they have grown up with computers they will be much more likely to be donating online.

At the moment only around 9-12% of donations in Australia, USA, UK, Canada and elsewhere are made online.  And a big proportion of them solicited offline.

But my bet is that by 2030 online will be the #1 channel of donations.

There may be other disruptors that may speed it up.  For example, the cessation of the cheque as a payment method, and the proliferation of goods and services exclusive to the online space.

But a combination of extrapolating, common sense and rational thinking tells us digital is the future.

Just not all of the future.

Best wishes,

Sean

P.S. This is a revised version of an old blog I did a few years ago.  Remarkably, not much changed!

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The Best Way To Get Donations From Under 40s…

What’s the best way to get donations from people under 40 years old?

Wait until they are over 40.  With rare exceptions, little strategic money is donated by people under 40.

Even face to face – aimed at Gen X – finds that older Gen X donors give more than their younger Gen X peers.  That is, 45-year-olds give more than 35-year-olds.

However, that does not mean you shouldn’t communicate with younger people.

Older people almost certainly donated more in the Ice Bucket Challenge than younger people – even though there were likely fewer of them.  But – those older people would not have known about it if it weren’t for the fervent sharing by millennials.

The idea of acquiring donors while they are young because we will make them more likely to support us later is not entirely flawed, but just stepping back and thinking about that logically, it doesn’t quite make sense.

Surely it would be easier to get the more valuable donors in NOW, and only go for the long-term ‘get ‘em in young’ when you have got all of the older ones in first?

I suggest that you look at your current donor database by age. You will likely see a stark correlation between age and every measure of success.  Generally older donors tend to have:

  • Higher average donation.
  • Higher second gift rate.
  • Higher retention (especially in monthly giving).
  • Higher amounts raised (in events).
  • Higher chance of supporting an event again.
  • Higher lifetime value.
  • Higher chance of putting you in their will… and a higher chance of realising that sooner.
  • Higher chance of becoming a major donor.
  • Higher chance of responding to most of your communications.

If anyone can ever show me some data on younger people giving in strategic volumes – please let me know!!

By the way, would you like to learn how you can motivate ANYONE to donate to your cause? Then check out our Irresistible Communications Course in The Fundraisingology Lab.

Sean

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DemographicsDirect Mail

Are Millennials Really Worth Targeting for Fundraising?

We all want younger donors.  But is it worth the investment?

Certainly, it is for donors around the 40-year-old mark – face to face (direct dialogue) has done really well there getting millions of people around that age to give.  But what about younger?

The idea that by getting donors in early, we will make them more likely to support us later is not entirely flawed, but just stepping back and thinking about that logically, it breaks down.

Surely it would be easier to get the more valuable donors in NOW, and only go for the long term get ‘em in young when you have got all of the older ones in?

I suggest:

Look at your current donor database by age, you will likely see a stark correlation between age and every measure of success.  Generally, older donors tend to:

  1. Higher ave donation
  2. Higher second gift rate
  3. Higher retention (especially in monthly giving)
  4. Higher amounts raised (in events)
  5. Higher chance of supporting an event again
  6. Higher lifetime value
  7. Higher chance of putting you in their will and higher chance of realising that sooner
  8. Higher chance of becoming a major donor
  9. Higher chance of responding to most of your communications

In regular/monthly giving the upwards trend tends to stop going up over 67/70 years old.

In cash / direct mail it doesn’t seem to ever stop going up.

And when you take that line to people below about 40 you begin to see that the Return on Investment over (say) five years is simply not worth the effort.

In other words – older donors are better.

Why?

One theory is that charities are simply not good at marketing to younger people.

I don’t believe this, because thousands of brilliant charities try all the time and fail, and have done for years with tons of ideas.

Maybe it is true – after all, before face to face charities had repeatedly tried and failed.  But it seems the effort of finding the magic has wasted far too much charity time and money already.

My theory is a bit more simple, and shared with pretty much every fundraiser who has ever looked at demographic data as well as fundraising data:

The older you get, the more disposable income you have.  Then, when you get REALLY old, some peoples disposable income may go down, but the asset in your legacy is still going up.

Should we write off young people then?

Not at all.  They like purchasing cheap quick things, like Ice bucket Challenge (IBC).

But note, probably more than 80% of the revenue raised for IBC would have come from just 20% of the participants.  And that 20% will be heavily represented by older participants.

In other words, they got loads of young people involved, but most of the actual $ will have come from people over 40 or 45.  We see this in all events.

But having 8,000 young people to an event, effectively funded by 2,000 old people could have other benefits – for campaigning for example.

All fundraisers WANT young people to give.  They really believe in it! I really wish it was so too! But wishing something were true doesn’t make it true.

In the table below, the age of donors – across about 70 charities, where age is known, you can see there are some younger groups.  But even within those younger groups (like face to face regular givers, averaging 43 years old), we see all of the points I made above still hold true.

Gift Classification Channel Income Donors (age known) Age at recruitment
Regular Gift Street/Mall

Face to Face

 $165,216,714    620,857 43
Cash Direct Mail $78,436,142    612,500 70
Regular Gift Phone $24,150,667    100,655 54
Regular Gift Other $25,153,095      72,101 54
Child Sponsorship Street/Mall

Face to Face

 $36,042,920      68,052 44
Regular Gift Direct Mail $21,022,016      64,000 61
Child Sponsorship TV $26,524,368      42,876 47
Child Sponsorship Other $27,903,102      43,071 47
Gift To Child Direct Mail $7,091,384      82,601 52
Regular Gift Online $11,190,781      30,828 44
Regular Gift Door to Door Face to Face $4,931,672      19,558 44
Child Sponsorship Online $8,977,320      15,126 41
Child Sponsorship Phone $7,064,422      12,601 48
Child Sponsorship Direct Mail $7,722,054      11,543 54
Child Sponsorship Door to Door Face to Face $5,488,382        8,830 45

The trend for all the other areas looks like that too.  i.e. older DM donors are better, as are older online donors etc.

And even in bequests from regular (sustainer/monthly) givers.

The chart below shows that older people communicated with by direct mail, including appeals, are more likely to donate (there are more of them) AND they give more after their initial gift than younger ones.

Put simply, an average 75-year-old paying by cheque will give over 7x their initial gift in 5 years, but a 35-year-old cheque donor (of which there are not many) gives about 4 times as much.  A MASSIVE difference. And for credit cards, it is 7x and 5x, still a BIG difference when you consider how expensive and tight the costs of donor acquisition are.

In major donor giving… older is better.

On Facebook… Successful (fundraising) charities have profiles like this…

The bottom line:

There is no measure that I can find anywhere that tells a fundraiser that younger people are a priority over older donors.  The only time we need to go for younger people is after we have:

* Exhausted sources of older donors AND

* Following best practice with donor-centric and frequent communications with them AND

* We have a great mid value donor program AND

* We have a great legacy/bequest program AND

* We have established a face to face sustainer/monthly/regular giving program (or can’t for some reason)

Only when we can tick all those boxes should we start mass marketing on a strategic level to younger people.

OR

* Involving younger people is core to your mission.

Find out how you can fundraise more effectively by targeting the right audience by checking out The Fundraisingology Lab. Click here for more information.

Sean

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