Fundraising out of sync with giving habits

Technology is changing the way people give, with different generations preferring to give in different ways, and nonprofits should adjust their fundraising strategies to reflect those giving patterns, a new study says.

Giving through electronic and social media is becoming more popular, particularly among younger generations, yet most nonprofits gear their fundraising to donors born before 1945, a segment from which nonprofits generate strong results but that shrinks each year, says the study, commissioned by Convio through Edge Research, with the support of Sea Change Strategies.

The study, based on an online survey of 1,526 donors and on three focus groups, looked at four generations — “matures” born in 1945 or earlier, “boomers” born from 1946 to 1964, “Gen X” born from 1965 to 1980, and “Gen Y” born from 1981 to 1991.

Fundraising is “profoundly multi-channel,” but nonprofits are not set up to raise money and track giving through multiple channels, the study says.

And donor databases “rarely track participation across the organization outside of donating and attending events,” it says.

Most donor databases are built either for major-donor fundraising or for direct-mail, for example, and can “fail miserably at tracking and accounting for multi-channel behavior, or helping design and manage multi-channel campaigns,” the study says.

Direct-mail dominates giving by matures, it says, yet the share of boomers, Gen X’s and Gen Y’s who respond to postal mail declines steeply with each successive generation.

“The younger the donor, the greater the number of ways they give,” the study says.

Yet most charities continue to try to acquire new donors through a “traditional direct-mail-centric acquisition model” that targets Boomers and other younger donors “who make it onto available rental lists,” the study says.

“The heavy bias towards direct mail as a donor acquisition channel no longer makes sense,” it says.

Some of the fundamental fundraising problems nonprofits face are “more organizational than technological,” the study says.

Direct mail and online fundraising typically are managed in separate departments, for example, each having its own goals and sometimes competing with one another, the study says.

And in some organizations, even the Internet has been divvied up among departments “for political rather than strategic reasons,” with the website, social-marketing outreach and email communications each housed in separate “silos” within a large nonprofit, it says.

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