Chances are, the average age of your donors is startlingly high. And because of that, I'll bet you or someone in your organization has said:
Our donors are dying! We've got to replace them!
That's absolutely correct.
The next panicked statement is usually:
We need to find young donors!
That's also correct. But the whole thing goes off the rails when someone interprets that to mean:
Let's focus on Gen Y donors!
For some reason, it's often assumed that the path to survival is to replace your dying 89-year-olds with healthy 29-year-olds.
The young donors you should be focusing on are people in their 50s. Why not 29-year-olds? Several reasons:
- The messaging and media channels you use to reach your current majority of older donors simply won't reach or persuade most people in their 20s and 30s. It will take a heavy investment in time and money to discover where to find them and how to motivate them.
- If you manage to find that, you'd quickly notice that you now have created two separate donor groups: Your old donors and your young donors -- and they need to 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.
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.
- The combination of their higher giving and good retention causes them to have a much 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 online fundraising.
- There are a lot of them. The fat part of the Baby is in their fifties now.
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 Gen-Y donors today is the equivalent to converting your retirement nest-egg into $10 bills and leaving it in a pile on the beach.