The Shifting Sands of Nonprofit Funding

During any given month, at the forefront of a nonprofits’ mind-share is the harsh reality that some type of cash flow is the lifeblood of sustainable operations. Most surveys show that revenue/fundraising remains at the very top of the nonprofit challenges list.[1]

Funding is a shifting landscape. Charitable organizations are constantly faced with new hurdles to create sustainable revenue streams. Demographics shift over time, government regulations change, technology alters the landscape, and pandemics hit the economy. When tried-and-true channels suddenly contract, organizations fall short of their goals which in turn affects the causes that rely on their efforts.

Most tenured NPO leadership has learned to live with the familiar feeling of not knowing whether this is the year the impact will be able to expand or tough decisions will need made to maintain the current level of services. Stability is a hot commodity, because the only thing constant is change.

Coming of Age

The average age of a donor in the U.S. is now 63.[2] This has been somewhat expected as financially secure baby boomers come into a stage of retirement and life reflection. But what comes after, and what about the larger generations which follow?

From Millennials down to Gen Z, these demographics are chock-full of causes to which they are tightly aligned. However, they have limited resources and are often unsure how to get involved to make an impact. Nonprofits are struggling to connect with these new generations and leverage their massive philanthropic intentions now and into the future as their means grow.

Many organizations have yielded to the idea that expectations for a younger demographic start and stop with volunteerism. A few charities have been able to leverage a young generation’s active role in online advocacy to actual effect. But capturing DONATIONS from these age groups? That typically isn’t a prioritized expectation.

Should it be?

Reaching a Generation that Cares

In 2020, Millennials became the largest demographic in the American workforce. They are also earning less and have acquired more debt than previous generations at the same stage of life. While this alone can create strain on monetary contributions toward philanthropy, so can the communication path. Existing workplace giving programs have seen a dramatic decline in effectiveness in recent years.

That doesn’t mean a younger crowd isn’t generous, however. A survey from a Cassandra report entitled “The Gen Z Issue” showed that 32% of respondents (some of which are still teenagers) have donated monetary contributions from their own pockets.[3] Some of this is ALLOWANCE money folks! Who wouldn’t want that philanthropic energy aligned with the causes that need it most?

The real question for nonprofits has remained: how do you reach and EMPOWER younger generations?

Tapping the Power of Low Friction Tech

Knowing where to find your audience is half the battle. Meeting them there is the other half. Like so many solutions for so many industries, technology is a driving force behind innovative answers for charities of all shapes and sizes. Take a look at a few examples of apps and platforms working to empower a younger demographic TODAY.

A simple donation platform, uBack attempts to connect would-be donors with the perfect charity by allowing them to search through topics and missions they care about. There is a small processing fee for donations.

Who says fundraising events have to be in the “real world” versus the virtual? Fundly allows nonprofits to create and manage an online, campaign-style fundraising event and then crowdsource much of the promotion through supporters and social media. There is a small fee deducted from donations.

A shop-to-give program that rides the coattails of the massive revenue stream present in online shopping. The main power behind the program is that there’s no additional monetary requirement from supporters since funds are generated for their cause of choice as they do their normal online shopping. The recurring funding stream builds over time and can become substantial and stable. Givevia is completely free for eligible 501(c)3s and their supporters.

Facebook Fundraisers
Facebook’s no-frills Fundraiser functionality allows anyone to create a simple fundraising goal and promote in traditional social media style to their network. Truly a grassroots approach, this style of tool easily supports a peer-to-peer (P2P) model where users can start their own fundraisers for a charity of their choice. To leverage, nonprofits must meet certain criteria which include having a Facebook page and undergoing a charity verification application process.

Putting a totally different angle on asking for participation, GiveGame gamifies charitable giving by allowing users to compete with one another during live events, creating predictions or brackets for everything from March Madness to The Bachelorette to The Emmys. The final collective donation is paid to the winner’s nonprofit. There are no upfront fees and only a small processing fee for donations.

These are just a few examples of technologies built specifically to bridge a gap between nonprofits and a younger generation of supporters. Some options are working so well that they’re changing the landscape across age groups of 40+ as well. Given the relatively low cost and small lift for implementation, it’s no wonder many nonprofits are flocking to these new options to determine their impact for bolstering support and funding.

Charitable organizations know that capturing the attention of a younger audience now will pay dividends in the future as they continue to build financial means, but that hasn’t stopped agile strategies built to focus on empowering those same groups today. Perhaps it’s time to take another look at reaching generations based on their passions, intentions, and direction rather than their current donation levels. There are people out there that want to help you today.

References:  [1] Wipfli 2019 Nonprofit Outlook Survey Report  [2] Blackbaud Target Analytics® 2019 Charitable Giving Report  [3] Casandra Report “The Gen Z Issue”