Future Fundraising Now

Young old people and the future of fundraising

My Aunt Marie once told me that your forties are the old age of your youth, and your fifties are the youth of your old age.

That fat part of the Boomer generation -- those born in the mid to late 1950s -- are now in their fifties. In the youth of their old age.

This is exciting news for fundraisers, but it changes a lot of things, as Seth Godin notes at Fifty is the new thirty:

This changes ... the marketing of every service and product aimed at consumers--and yet most traditional advertisers are stuck in the mindset that thirty is the end of your chance to find a new customer or build a new brand.

Advertisers who keep on worshipping the shrinking youth market and ignoring the growing 50+ market will suffer.

As will fundraisers who don't take notice of the groundswell that's right under their feet. If you're serious about growing in the coming years, you'll be all over the soon-to-be-old market.

Here are some ways these new young-old donors behave that we need to pay attention to:

• They want control over what their giving does. That means raising only unrestricted funds is going to be harder.
• They seem to give larger amounts less frequently than older donors, and to support fewer organizations. That's one reason it's getting harder to find new donors.
• They are slightly less responsive to direct mail, which means we need to get our act together online.
• They cross channel lines. This is the biggest deal of all. The most common behavior is to respond to direct mail on the web. If your website appears to be unrelated to your direct mail, you are losing donors.

Guess who gives to charity?

Who gives to charity? Here's a look at a recent study reported at Advice for Good. What the research says about who gives to charity

It's a more European take on the topic, but it's pretty much the same as what we experience in North America. Some important factors for charitable giving include:

• Religion: "...the more often someone attends religious services the more likely they are to donate to charity and donate larger amounts."
• Education: "higher education = higher charitable giving."
• Age: There's a "positive correlation between age and donation amount, with a leveling off or decreasing after a certain age."
• Socialization: "People who grow up in a religious household give more to charity; parental volunteering likely increases children's propensity to give; volunteering as teenagers increases giving as adults."

The important takeaway from this, or any other study of who gives, is this reminder: Your donors are not you. If you want to be persuasive to them, don't tangle yourself up in trying to be persuasive to yourself.

Here's the study: Who Gives? A Literature Review of Predictors of Charitable Giving (PDF).

First things first: study Boomer donors

The Boomers are here. The Millennials are not here, yet.

Anyone who's spending more than a cursory thought on Generation Y fundraising is wasting time and money. It's like ignoring the mound of twenty-dollar bills on the table in front of you to go crawling around on the floor for the penny you thought you saw down there.

Listen to Tom Ahern, who knows what he's talking about, at Which is your next priority, younger donors or boomers?:

... age matters. It's not that younger donors are less generous. It's just that they have so much more to buy: clothes, cars, furnishings, homes, education for their eventual kids. Older donors have been there, done that.

A person aged 65 is far more likely to have two things a young adult won't have: (1) enough stuff, and (2) a sense that time is running out.

The Boomer fundraising era started last year. That's when Boomers edged out the older generation as the majority of Americans age 55 and up. (The figures are similar in most Western nations.)

Boomers will be the majority of the donor-age group until 2033, when Generation X will squeeze past them. Boomers will gradually decline in numbers until they are mostly gone around 2050.

The Milliennials, or Generation Y, doesn't show up in the donor demographic until 2035. That means if you are under 40 now, you'll start to see the impact of the Millennial Generation on fundraising when you're old and gray and nearing retirement.

Right now, Millennial fundraising is pretty much science fiction. Theoretically interesting, maybe entertaining to some -- but not a practical way to spend your time.

The Boomers are upon us. We haven't even figured them out yet! That's where you should put your energy. You should have a weather eye on Generation X, which will first appear on our stage in 2020, and become the majority of the donor age group in 2033.

More on the shifting numbers of the generations at How many people are likely to give -- now and in the future.

How not to muck up your fundraising

Ageless Marketing reveals why so much advertising fails so dismally to reach the huge and lucrative older market, at Why Seniors Don't Buy Your Ads.

Short answer: Ads are usually aimed at younger people, even when they are meant to be aimed at older people. Because many young and naïve ad creators don't understand that older people aren't just like them.

This matters to us fundraisers, because our target market is overwhelmingly older people. And younger, inexperienced people who create the messages often don't know (or refuse to believe) that making fundraising they think would work to persuade them will work with their actual audience.

Here are the Agesless Marketing ways to get it right (slightly reinterpreted by me for fundraising):

• Avoid hyperbole. Older donors aren't impressed.
• Be authentic. Older donors can tell when you're faking it.
• Connect with their values. Values matter more and more as we age.
• Don't appeal to self-centered benefits. Older donors really are into helping others. The self-focused benefits that advertisers use when marketing to younger people are less interesting to older people

The big, overarching rule for fundraising: Don't use your own taste and preferences to guide you. That will make you do it wrong!

Help! My direct mail is turning into my Dad's direct mail!

Men: You are turning into your dad.

If you don't have kids, and/or you're under 30, you might not believe me. But it's one of the most powerful forces you'll encounter in your life. Most likely in a situation with your kids, you'll suddenly realize with mixed horror and wonder: I just did exactly what Dad woud have done. I'm my Dad!

The same thing happens to women. You are turning into your mother. Resistance is futile.

We're seeing this in fundraising as Boomers move into the ranks of donors in meaningful numbers. They're turning into their parents. They swore they wouldn't. But they can't stop themselves.

Here's one way this is playing out: These Boomer donors are responsive to direct mail. A few years ago, they were much less so, but now that they're becoming their moms and dads, they're opening and responding to what they get in the mail.

Of course, you don't become an exact replica of your dad as you age; you'll retain some scrap of your own identity as you age -- otherwise I suppose we'd all be lemurs or slime-molds. That little scrap of self is probably why we see a lower response rate to direct mail among the Boomers. And a greater demand for information and control in the donor-charity relationship.

So, like human beings, fundraising changes, but it changes slowly.

Fundraisers should know the joy of old age

If you're below a certain age, it might surprise you to learn that in general, happiness increases with age. That's right, as your health and strength decrease, as death approaches, people feel more joy.

This is as reported at the Ageless Marketing blog, at The Joys of Old Age Are Real.

Okay, that gives us something to look forward to. But for fundraisers, it should give us something to seriously consider:

Success in older markets depends on connecting with them through their worldview, which means the younger members of your marketing and service team need to learn how to shift away from the worldview of the young....

Fundraising is overwhelmingly a form of elder marketing. That means you need to get older people. They feel joy, and their joy is different from young people's joy. They worry less than younger people. They have more emotional intelligence.

If you're under 60 and your yardstick for effective fundraising is That's really persuasive to me and all my friends -- you're missing the boat. You're being irrelevant.

Keep your eyes open. Know your older audience.

If you're interested in understanding some of the ways older donors are different, you might want to read these posts:

• How to understand older people
• Why donors respond to stories
• Stories bridge the age gap for fundraisers

Advertising industry is starting to get it?

From the New York Times -- the front page, no less: In Shift, Ads Try to Entice Over-55 Set:

After 40 years of catering to younger consumers, advertisers and media executives are coming to a different realization: older people aren't so bad, after all.

Advertisers are being driven in this direction by two factors:

1. The formerly-young Boomer generation is now getting old. The very generation that sparked the youth infatuation of the ad industry is no longer youthful.
2. People over 55 have more wealth than those under, lower unemployment, and high levels of media consumption in all channels. They're basically a massive goldmine for those who want to sell stuff.

This is great news for nonprofits. One of the biggest problems we've faced for a long time has been the influence from the youth-worshipping ad industry. Because advertising is kind of like fundraising's older, richer cousin, we can hardly help but be influenced by the assumptions and culture of ad agencies -- directly and indirectly.

Billions of dollars have been wasted by fundraisers who borrowed the techniques and approach of advertisers: edgy, modern design; clever, indirect messaging; media assumptions that are basically guaranteed to miss older people. People do those things because that's what so much marketing looks like. It just doesn't work in fundraising because we have a very different target audience.

Then there's the hilarity that ensues when ad people work directly for nonprofits.

Let's hope that this maturing and refocusing of the advertising world will trickle down to the fundraising world. Only good can come of that.

How not to alienate your donors

If you think clearly about fundraising, you realize it's largely a form of "elder marketing." But that knowledge can lead you astray if you don't know your audience. That's the important point from the Direct Creative Blog at The dos and don'ts of marketing to today's seniors.

Seniors nowadays have some different approaches to their seniorhood than previous generations. Boomers, especially, are entering old age not thinking of themselves as old:

... when you're marketing to seniors, the first thing you have to remember is that you don't call them "seniors." And that goes double for terms like "old" or "elderly." In fact, any direct reference to chronological age is a big no-no. People know how old they are.

This is a new thing. Youth culture being carried into old age.

Smart fundraisers speak into the conditions and psychology of their older audience without saying so. What you need to know is this:

• As we age, the right brain gets more dominant. Stories and emotional appeals become even more important for motivating action.
• Edgy, cool, modern design that you love is often just puzzling and annoying.
• Careful with pop-culture references and approaches. People over 60 have a different pop-culture reservoir.
• Eyesight deteriorates with age. Larger type and clean, clear layouts are necessary.

Do all that. Just don't mention that you're doing it because they're old.

Obama giving looks like a Boomer giving

Newsflash: President and Mrs. Obama are Boomers. It shows in their giving.

In 2010, the Obamas gave a generous 14% of their income to charity. That amounted to just over $245,000, and it went to 36 charities.

They fit the Boomer pattern of having a rounded, conscious portfolio of organizations that reflect their passions and interests. There's no doubt also the additional consciousness of public figures who know their giving will be scrutinized. The only unusual thing is their age: Neither of them is yet 50. For most people, the donor impulse doesn't really start until the mid-fifties are later.

The largest recipient of the Obamas' giving is the Fisher House Foundation an organization that helps military families (more on Fisher House here.)

There's also a lot of giving to Haiti earthquake relief, most notably to the Clinton Bush Haiti Fund.

Then there's giving to local organizations in Chicago and DC, their daughters' school, a variety of health organizations, and some civil rights organizations. There's a mix of well-known name-brand charities and smaller organizations.

So how do you get on the donation radar of well-off, generous, charity-conscious Boomer couples like the Obamas?

• Do something inspiring. Better yet, do something innovative, impactful, and inspiring.
• Be in their lives.
• Be in their community.
• Treat them as active partners in your cause.

You can read more about it here at Charity Navigator. And if you're really wonky, you can download the Obamas' 1040 form for 2010 here (PDF).

How not to expand your donorbase

Mission Paradox Blog points out a challenge many arts organizations have: Expanding the audience. Read Low hanging fruit.

My own policy is to spend 80% of my time and resources going after folks who are already "cultural consumers". I want people who are at least comfortable with the idea of going to plays, opera, etc. on a semi-regular basis. Getting those people to choose my day job's work is challenging enough.

Then I spend 20% of my time building new audience. I do this with the full knowledge that those efforts may take years to pay off.

There's a similar challenge in fundraising. Many organizations put huge amounts of resources and time into bringing new classes of donors on board.

Very often, the sought-after new donor group is cool people in their twenties like the ones most of the staff hangs out with. Sometimes it's people living outside the community where the organization works. It might be people outside other demographic or psychographic profiles that are dominant among donors.

Your chance of success with these new groups is dramatically lower than it is with your core donor groups and people like them. It's going to cost more to find them, and you are going to fail a lot more often when you try.

That's not to say you shouldn't work to expand your donorbase. Just know the risk. Balance your budgets, time, and opportunities so you're delivering a good level of revenue at an acceptable ROI.

If you're seeking younger donors, look for those who are only slightly younger than the donors you have. If you want to expand geographically, go regional before you go national. If you want to broaden demographic, try the near-matches first.

The further away you get from the audience you have, the harder, less certain. and more expensive it gets.