Charitable organizations have long been accustomed to sending out direct mail to recruit funds from existing and new donors.  Historically, this approach has yielded about a 1% response rate and often the responder can be counted on the give again and again. Additionally, the approach has worked well for cultivating loyalty with members of the Mature generation. To prepare for the future, should nonprofits be adjusting their fundraising strategies?

This question was raised by Convio and Edge Research during a recent study which found that giving varies significantly by age group. Currently, annual giving by individual consumers breaks out as follows:

  • Matures $1,066
  • Boomers $901
  • Gen X $796
  • Gen Y $341

The method of giving varies by age as well. According to the study, the most common method of giving funds for each age group is:

  • Matures – Check by mail 77%
  • Boomers – Check by mail 54% (closely followed by store checkout donation at 52%)
  • Gen X – Checkout donation 57%
  • Gen Y – Checkout donation 48%

For now, Matures, Boomers  and Gen X members get most of their information from their top charity through direct mail. But Gen Y members say that Web sites and e-mail/newsletters are their primary information sources.

Analysts found that while direct mail remains a strong channel for soliciting and accepting funds, they suggest that non-profit organizations begin using other channels such as social networks and text messaging.  This change in strategy will prepare non-profits to court younger consumers for donations for the long term. Not surprisingly, the study results show that “[t]he younger the donor, the greater the number of ways they give.”

The advent of e-commerce has increased the difficulty of tracking return on investment (ROI) on solicitation of funds.  ROI information is as important to nonprofits as it is to other businesses and analysts believe that measurement tools will be forthcoming. For now, nonprofits need to operate in multiple channels to make it easy for donors to receive requests and send in donations.

[Source: The Next Generation of American Giving. Convio. Edge Research. March 2010. Web. 25 Mar. 2010]