Tuesday, July 27, 2010

Charity Begins at Home

Old timers like me are generous donors to charities. Maybe it’s because we have more available funds, maybe because it’s become an ingrained lifestyle decision honed over decades of generosity. But recent statistics show that Baby Boomers—born 1946 to 1964—give $901 a year to 5.2 groups. We're exceeded only by older siblings and parents who give an average of $1066 a year to 6.3 charities.

Role Model for Our Children?

So what kind of role models were we to our children? The study says we did OK!

Gen Xers—born 1965 to 1980—give on average $796 to 4.2 organizations a year, and the youngsters out there, the Gen Yers—born 1981 to 1991—give $341 to 3.6 groups a year.

Hence, as people age their charitable contributions increase, as do the number of charities they support. What is also changing is the number of ways nonprofits can approach donors.

Gen X and Gen Y combined now make up more than half of the available pool of potential donors, and they don’t seem to have the “brand loyalty” that their seniors do. So figuring out how to reach these upwardly mobile donors—and keep them donating!—is critical to nonprofits.

There used to be a limited number of tried-and-true ways to reach and influence potential contributors. The explosion of social media and the internet has made that effort exponentially more difficult. Now it gets really complicated.

Retail. Just over half of all age groups say they have made contributions at the grocery or retail store, but older folk still prefer to receive their information through direct mail. Younger folk have a variety of paths from which they get information, and no single channel predominates.

Internet. 35% of the Xers had gone on a charity’s web site to make a contribution as had 29% of the Yers in the past 2 years. What had gotten them to that website in the first place is still TBD.

Social Media. 36% of those under 30 years old said they had shared information about a charity with friends in the past month and 29% posted information on a nonprofit organization on their own Facebook page.

Text messaging. Text messaging is gaining wide acceptance. 77% said they had heard about opportunities to contribute to Haiti earthquake relief via their cell phones and 36% indicated their willingness to make a cell phone contribution. But there is a generational divide. Cell phones generated contributions from 13-14% of the X and Yers, but only 4% from the Boomers.

Social Events. Younger people tend to like social events such as 5K runs and galas. They also are generous volunteers. On the other hand, they tend to give simply because they are asked to do so and without conducting much research. By comparison, older donors like to know how much of the donation goes to overhead expenses.

Direct Mail. Still a very viable tool, Direct Mail got attention —and money— from 43% of the Xers and 26% of the Yers in the last year. Individuals born before 1965 voiced a strong preference for direct mail; people born after 1965 preferred web sites.

As the number of donation avenues increases, the old metrics of nonprofit fund tracking is becoming obsolete. An individual may have first learned about a nonprofit from a friend who directed the individual to a Facebook page which got him to a website. Or it may have come from an invitation to join in a 5K, an overhead public service announcement, an ad in a newspaper or even a direct mail solicitation.

The multi-channel nature of today’s giving environment necessitates a more global perspective on response rates and specific media ROI. Nonprofits have figured that much out. Nonprofits haven’t figured out how to compute the value of various input sources: internet vs DM (direct mail) vs WoM (word of mouth) vs text messaging vs Social Media vs special events, etc.

The world is changing. If you don’t know what is working, you don’t know why it’s working and then you don’t know how you can make it better.

Like so many things, it used to be simpler.

1 comment:

Direct Marketing said...

Great Article! Action Is The Key!