The nonprofit sector faces challenging declines in charitable giving, created by economic uncertainty, global conflict, and the lasting impacts of the COVID-19 pandemic. Reports from Giving USA show that individual giving has continuously decreased, reaching levels not seen in decades. Along with this, Baby Boomers, who have been the backbone of charitable giving, are retiring and passing on their wealth to younger generations. The New York Times (2023) highlights that $16 trillion in wealth will be transferred to Generation X, Millennials, and Generation Z within the next decade. However, with current philanthropic practices being tailored to the Silent Generation and Baby Boomers, nonprofit leaders must consider the best strategies to engage Millennials and Generation Z. After all, these donors may be the key to reversing the decline in charitable giving. To ensure sustainability, nonprofit leaders must implement innovative strategies to recruit, retain, and solicit the next generation of donors.

Enhance transparency to build trust

Increasing an organization’s transparency is a crucial step in building trust with younger donors who often distrust institutions and large-scale fundraisers. These donors also value autonomy and prefer to extensively research an organization before making a donation. Nonprofit leaders can practice transparency by making financial documents, such as the IRS Form 990, audited financial statements, and annual reports, easily accessible on their websites. Additionally, nonprofits can produce data-driven impact reports, which are more likely to resonate with younger generations than traditional storytelling. Monitoring and maintaining strong reviews/ratings on watchdog platforms can further strengthen trust. Finally, short-form social media content can provide quick, accessible insights into an organization’s effectiveness on the platforms used most frequently by these donors.

Streamline online fundraising efforts 

Younger donors value convenience and security in their giving processes. Nonprofits can ensure that their websites are mobile-friendly and can offer payment options like Apple Pay or PayPal to simplify online donations. Crowdfunding and social media fundraisers are also great ways to engage these donors because they align with their preference for community-based fundraising and average giving capacity. By rethinking the use of digital platforms, nonprofits can meet younger donors where they are and provide them with a streamlined donation experience. 

Encourage active donor involvement 

Generation Z and Millennial donors often want to see tangible results from their contributions and are willing to be actively involved with organizations to ensure their impact. Nonprofits can create volunteer opportunities that allow these donors to experience the mission firsthand. Additionally, fundraisers can rethink donor appreciation and fundraising events by developing interactive events, such as marathons, golf tournaments, or community-based socials, that align with younger donors’ preferences for socialization. Events that include shareable elements, such as photo booths or branded hashtags, can help engage younger donors while expanding the organization’s reach through social media. Providing hands-on involvement opportunities allows donors to build a personal connection to the mission. 

Establish long-term relationships

Building strong, long-term relationships is vital to engaging younger donors, who often have the lowest retention rates. Nonprofits can better understand younger donors’ needs by utilizing social polls, surveys, or direct communication. In addition, monthly giving programs offer an opportunity to establish consistent connections while meeting these donors at their current giving capacity. Organizations can also implement product wishlists for their programs that would allow donors to understand the physical impact of their contributions. Finally, organizations can begin engaging donors who may be too young to give right now by establishing teen boards and engaging youth philanthropy groups. By prioritizing relationship-building from the start, nonprofits can build strong foundations while expressing their appreciation and value to these donors.

The path forward

As the donor landscape shifts, nonprofits have the opportunity to embrace modern philanthropic approaches that align with the values of younger generations. By increasing transparency, developing digital fundraising methods, creating active involvement opportunities, and cultivating lasting relationships, nonprofit leaders can prepare their organizations for long-term sustainability. The path forward ensures that nonprofits not only attract the next generation of donors but also welcome them into leading philanthropic efforts.

Allen Frost is a Fall 2024 graduate of the Master of Nonprofit Leadership and Management program at Arizona State University. He currently serves as the Board President of the Young Nonprofit Professionals Network Phoenix, which provides networking and professional development opportunities to cultivate the next generation of leaders. Over the past few years, Allen has also provided programmatic and development support to nonprofits serving Arizona’s youth. 

Image by Lillian Finley

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