Episode 250: Understanding Millennials and Gen Z as Givers-Donors
Welcome to another edition of Around with Randall, your weekly podcast for making your nonprofit more effective for your community. And here is your host, the CEO and founder of Hallett Philanthropy, Randall Hallett.
It's another great day here on this edition of A round with Randall. We tend to overlook this as we spend as an industry. And certainly I talk about the idea of a smaller group of people making a larger percentage of our impact 95, 55% of our donors making up 95% of the dollars. But we always need to be looking to the future as well.
And that's why today I want to talk about the world of engaging generation Z and millennials, which tends to come up quite often as we're struggling to figure out how to do that. And by the end of today, I'm hoping that you might have a better understanding, better concept, different ideas that are tactical to engage the next leadership generations years to come still, but going to be important to the world of philanthropy that we're going to be meeting with whatever happens in our communities.
15, 20, 25, 30, 40 years down the road. Why is this important? Well, we know that millennials are averaging in terms of giving somewhere about just under $2,000 per year. So it's growing. 82% of millennials give online. And when we look at generation Z we don't have dollar figures yet because they're still too young. But what we know is, is that there is a real understanding or figuring of how they connect, and that's more spontaneous.
And also what we know is, is that their causes are very much aligned with what their personal values are.
Also, in the last five years, we have realized population shift. We certainly have a few silent generation people, individuals in our world, still alive and hopefully for more years to come. But actually, we're losing them. So silent before 1940 or born before 1945 or 45 or before. Which brings us to the baby boomers and my generation, generation X.
What's interesting is when you take all the baby boomers and all generation X, so 1946 to 64, 64 to the early 80s. And then on top of that, you compare it to millennials and Gen Z. We're outnumbered if you're in the first two, if you're a baby boomer or generation X, we're now outnumbered. When you put the numbers together between Millennials and Generation Z, somewhere between 5 and 7 million people more in the younger generations.
All this is to say is, is that our audience is changing slowly. Now. Most of the wealth is still in the baby boomers and Generation X, but just looking back in history, that generation or that wealth transfers into the next series of generations. And so what we do today is really important. So let's start kind of the bigger picture, as we tend to do here on around with or and we'll talk about some of the philosophical or at least the factual things that we need to think about before we get into the tactical.
First thing is understanding who these generations are. So the millennials generically are about 1981 to 1996, generation Z, about 1997 to born in 2012. So they're really just coming into adulthood for many of them millennials, they're just coming and starting into their peak career years now, where for the older members of this generation, they have more disposable income for the first time.
They easily top generation X mine and certainly baby boomers in terms of how they choose to give. That's usually online, or they're mostly most likely to do that well over a direct mail campaign, even if it's digital. Meaning when we start talking about the latter part, which we'll see this year in second generation Z over emails. So online, we'll talk about how this might be a tactical QR codes and things of that nature are really important.
Generation Z 1997 or so to about 2012 are just beginning their careers, if particularly if they are at the front end of that generational time span, and if the latter, they're still in school, they are highly engaged in causes that align with what they believe that the ability for them to engage in some way really ties to who they are as a person.
So their organizations of choice are going to be the things in the places that mean the most to them. On a personal level, and that they are incredibly in need of what might be called impact reporting, that if you're not reporting. And by the way, we'll talk about this more quickly, more, more in detail in a moment, quickly reporting that impact.
What is it their dollars did? Even if it's $5 or a group, people who gather together, they may not know each other $20. 20 people who give $5 hundred dollars did this. If you're not creating that impact reporting, you're going to lose them after that first or second gift. They also, particularly the older parts of this generation, generation Z, are more likely to engage philanthropically in alignment with their workplace.
And so actually some of their work decisions are aligned with those same things we're talking about. They're giving around what they personally believe.
They also are amongst the most generous with their time. 92% of generation Z will volunteer. And you see this actually in schools. So my kids are just a little bit younger than the back end of the generation Z. But we have friends, we're a little older parents, we have friends who have kids that have gone through high school that are more aligned with kind of our age, as what would be parents, even though we have younger kids.
The idea of volunteering is actually part of many curriculums, and so it's almost brought into the educational world for them to be normally engaged in some type of volunteer work, giving of their time. They are most certainly fast social in the moment givers. They're all tourists. So if we go back to the seven phases, Lancer Reprints and file 1994 book, I always recommend they fit this altruist model because they give in the moment.
Something strikes them.
When we look at these two generations, we also have to think about how they give. And I mentioned this in a I mentioned a few moments is the way that I give is not the way they give that digital wallets. The idea of Apple Pay, Google Pay, PayPal, Venmo is ever present in their life.
And so if you're not creating opportunities for them to use those platforms, those financial vehicles, that's really what they are. It's no different than cash. It's just a way of doing it. Then you're not going to look as if you are a nonprofit that they might align with, because you're not making it easy for them. They also are an interesting move in terms of how we communicate.
Millennials are still responding according to the studies around communication. So respond to email certainly to social will read mail and more. Online conversations. Generation Z there is a definite change in technology. Generation Z is going to respond to texting, social QR codes, things that are right in front of them. All of this is to say is, is that both generations and we mentioned this a moment ago, generation Z, they are more likely to reengage.
I think stewardship is going to be more important with generation Z in particular, because of that immediate evidence that impact something that's quick. While I talk about often the need for us to focus on from a annual planning process for gift officers to how we set up our campaigns to where the majority of the dollars are. And again, that's in more likelihood, generation X, my generation and baby boomers is that they're going to become major donors.
And so they're ability to align with what you do becomes important. And I mentioned this a few moments ago that even though they may be smaller annual fund donors, as we think about them now, many or most of them, they are values driven. Both generations. Their philanthropy, more likely than not, is going to align with what they believe in their heart.
And so certain causes are going to appeal to certain individuals differently. The key here is to talk about impact storytelling. But got to be quick, which we'll talk about in a minute. The other thing that we should really highlight in terms of the idea of becoming major donors and increasing our communication with them here today, is, is that the ability for them to connect via digital?
So, chat rooms and different types of quick hitting videos coming right to their phones? I think about the difference between the way just and we're certainly both generation X, but my wife's at the back end of it. She uses her phone for everything. I get a computer out. So if you're not making this easy from a phone perspective, think about only receiving information via phone.
If you want to interact with millennials and Generation Z.
All of this is to say, is that we've got to begin ways if we're going to solve our problem, which I've talked about many times around the decreasing number of households, individuals making gifts, then we need to invest really smartly, economically, in many cases, as our budgets are being tightened in engaging this generation. Now, while we may not see the ROI with these dollars today, these are going to become your 100,000, your million dollar gifts down the road.
They may be a $10 Venmo gift or a QR code gift today, but you begin that process so that you develop a pipeline down the road. And yes, it's an investment and it's not going to give you all the money you want now. But if pipeline is truly an important factor in what we do, which I talk about all the time, then we probably need to spend more time thinking about how to do this.
So what are the tactical ways that you can engage with millennials and Gen Z or Gen Z? Yes, forgetting about those of us in Gen X and certainly the baby boomers. Ten things that you can do today that will make this more effective for you and probably more efficient to be candid in outreach, in connection. So let's start with the top.
We're going to have to learn. And maybe this is I'm speaking to myself more than anybody how to fix the checkout or the ability for people to give in terms of their financial choice or vehicles. If you're not highly engaged with Apple Pay, Google Pay, PayPal, Venmo keeping these forms simple, ever present things like auto detect addresses, offering micro giving asks at low levels.
Even back to crazies. It seems the idea of monthly options $10 per month. But if you're not doing that in the mechanisms of the way in which they transact, then this idea of, of giving. And it's not through cash, not through check, and it's not even through credit card, it's through wallet options in their phones. That's how they connect financially.
Every morning, I go get my Diet Mountain Dew because I'm a ritualistic person and go get a diet Mountain Dew from QuikTrip dollar 63. They raised the prices recently. $0.10. Yes, I did notice. My fountain drink. Every morning, I walked to the checkout stand and I'm watching more and more and more people just tap their phone.
I get out a credit card. Now that is saying I'm getting old, but if we want to engage people where they're at, we need to go to where they're at. And so you have to find ways of this tap to pay in events, in activities and things that they can do incredibly quickly. If you don't, what will happen is, is they will what you want me to give.
That way I don't even carry money. I don't even carry a credit card anymore. And so that's a change. And I don't see Apple Pay, Google Pay, PayPal, Venmo at events as much as we probably should. We're still living in an environment where we are working with and dealing with too many traditional methods, and we're going to have to make that adjustment as a part of this process.
So number one, changing the payment methods. Number two is creating friction free ways of getting in and out of the conversations. And what I'm talking about is how they get this is where QR codes come in. Because if you aren't putting a QR code on everything, how they connect, how they get information, how they open up a payment method, then you are leaving an entire generation and a half and pretty soon it's going to be two because generation Z obviously still some people, some of those, individuals are students, kids.
You're going to miss them so quick. One taps QR codes. Generation Z is telling us that they make financial decisions. Is outside philanthropy based upon the ease of, of transaction. And we know that spontaneity is important. So if you don't make it easy, you're going to not engage them. So number two is this idea of friction free in and out in terms of giving.
Number three is the conversion of and for those of us who are old, this kind of hurts to say, but I think it's probably very true. The conversion of direct mail and email to mobile. While millennials may do online giving and even take mail at times, there is no question, according to the research, that the latter half of millennials and Generation Z aren't going to do this.
And so we have to create mobile communication, which means taking what we thought of as annual giving letters and even digital emails. That might be 250, 300 words and getting it down to 60, 50, 40. A quick video, which we'll talk about in a moment. We have to figure out mechanisms that shorten the messaging into bite sized pieces that can be looked at, viewed at, understood, done quickly on a phone.
Now, this may mean a bifurcated effort because you may have generation X or baby boomers here. We're still giving. How do you create different messaging mobilized in mobile forms. And this is not my expertise, but I do when I sit on an airplane and look around or I'm at a restaurant, which isn't all that often. Everybody's on their phones, you know, I'm still the guy, more likely than not to have a book in his hand.
But I'm not the norm anymore. I'm the minority. If we look back at the numbers mobilize. How do you create your messages in much shorter, tighter frameworks? Number four is the idea of immediate and the word here is immediate impact reporting. So and we'll talk about this here in a few minutes around how quickly it should be done.
But what you're going to have to do is in some way, shape or form, kind of a cadence of short blurbs of impact pictures, quick videos, and they may stack on top of each other, meaning you may do one and then do a second one for 15 to 30 days later, and a third 145 days later. Quick bite size.
So traditionally when we looked at annual giving and again, I would defer to the experts that we need 5 to 7 touches at a minimum to engage new donors in the traditional model. I think the same is generally true, but you're going to have to do it in bite size pieces, and it's going to have to be mobilized, as we talked about.
So these generations, he's telling us at the top motivation is clear evidence that their engagement meant something. That means volunteers. If 92% of generation Z has volunteered, you have to find a way to show here's what the volunteering meant and what it did. So these bite size impact reporting cadences that are regular are regularly implemented in a digital slash mobile form formatter, or focus.
Number five, which we have not talked a lot about, is an idea of peer to peer, but it's not based on what we might think of as peer to peer for generation X and Baby boomers. Peer to peer in kind of the thought process of micro campaigns is critical because these two generations tell us they follow, which is when we think about a pretty normal thought process, they follow people.
I think about my eight year old daughter and how she wants to follow Taylor Swift, amongst probably 150 million other kids around the world.
They're influenced by people that they look up to. Now, I'm not saying everyone go running out for a Taylor Swift if you can get her, great, but that's not what we're talking about. How do you take 10 to 20 young ambassadors? Give them a link, a 32nd script so they can do one of those TikToks or Instagram videos, highlight or put a spotlight on what you do and have them send it out to people that they know.
That's a different methodology than what we do when we say, well, you're going to mail to everybody. You may have one series of messages for this, 20 or 30 or 10 to 20 versus another, or you've got them in these groups. Which kind of reminds me of how I talk about boards, about where do the social connections of our community, where the people that we want to engage, where are they in churches, country clubs, yacht clubs, wine tastings?
We don't look at talent. We look at connection. Well, this is that same premise, but on a micro level. Well, this takes a lot more work because you may have ten groups of 10 to 20 that are all in different social circumstances or places. That means you're going to have to work a little bit harder to do this.
So this idea of peer to peer in the planning is really important. Number six, as we mentioned, workplace becomes really important. I have a client that I have spent a lot of time with this last year, who really puts an immense amount of effort into new employee orientation about giving, and they're giving for their organization is close to somewhere about 60 to 70%.
But when you look at the numbers and I asked this of them here recently is what's the average age of their employees, their health care organization, lots of young nurses, young OT specialists. What ends up happening is most of their people are young. So this idea of younger people tying into their employment is really important. How do you create an environment where you, you partner with the business and have them use you as their choice, chosen cause celeb.
We engage in philanthropy with this organization because they make such a difference in our community, and that's how we look at our charitable dollars. An interesting way of spending it, because that means you're building partnerships with the corporations, not for them to give, although it would be great if they did their individual corporate dollars. But you're talking about how do you take the messaging you have and put it inside a company that says, this is one of our chosen, aligned nonprofits, because that's where the younger populations might be thinking of giving, where they naturally connect.
Seven creating those employment corporate relationships to allow employees to give. Number seven is what I would call smart, smaller starter subscriptions. Not easy to say. And we're back to something that I did early on in my career when I began working. Just because, number one, I'm in this industry. But number two, the way I was raised, the easiest way for me to make a gift was five, $10 a month.
So these smaller monthly tiers around instant connection to certain causes really are important. But we're back to where we started with the tactics. You got to make it easy, simple. And actually there are studies out there that say this, these two generations, you have to find easy ways, making it simple for them to cancel as well. They get angry.
And this I can understand with some of the subscriptions I have, they get really angry and actually resentful when they can't make the decision to opt in easily. As easy as it should be to opt out. And so giving them those easy ways to do entry and exit is really important. Generation Z, particularly because of the fact they don't have as much money.
This idea of micro friendly on ramps is really important. So how do you do really small, smaller beginning bites that you can show impact?
Number eight is using video to your advantage 20 to second, 20 to 30 second vignettes that might go out once or twice a month about it. Maybe they're stacked and maybe they're in this. The thought process of what's the problem? What's our solution and what's the outcome? But these are really small vignette and bytes going out. You too can be a part of this, that QR codes are part of it.
You can join. So you're stacking the messaging when we think about, you know, what's our problem. What's that? What are we doing about it. What's our outcome in various vignettes. And you're doing this over and over and over and over for different parts of the organization that talk about what your mission is and what the organization does to solve the community problem.
Number nine is texting that certainly Generation Z's probably a little less going to be engaged with texting. But millennials use of texting is ever present, ever engaged. And that is something that's not going to change in their lifetime. They're going to keep using that as a major communication. You have to find a way to increase texting, using pictures, using short vignettes, using short verbiage to get people's attention.
In particular, millennials, the first part of generation Z to get them to engage. And in doing so, you'll start building that relationship. And then you pair that with maybe the short form storytelling. We're talking about those building of those kind of pieces of the of the problem, what we do in outcomes, in the stories. You start texting those as well.
You want to put those on TikTok, you want those on Instagram. Different platforms that this these generations use the last tactical pieces. Is that the length of time that we need to thank our donors in these generations has to shrink. They actually want it under 24-hours, which may mean you have to have multiple ways of thinking. There may be an automated authentic.
This is where I and certain platforms can be used to create an authentic. Thank you. That's quite immediate, followed by the more traditional human driven note or letter or outreach. But the key here is, is that even postal thank you's, if done right, are still appreciated, if they're sincere. Authenticity is the key. I believe that when we look at artificial intelligence, one of the things that even smaller organizations can utilize is authentic, automated thank you's that are digital, that can be powerful and could be implemented quite quickly.
But the key here is, is that the generations of millennials and Gen Z say they want a thank you. Now, did you appreciate me? It's about me. If you're waiting, well, we're going to wait a week or ten days. You are way off on this generation, or at least two generations. Ten tactical things that you can do that will cause, create and engage philanthropy with these generations.
And again, this is not going to be a high ROI. This is a long term investment. And our pipelines. But it's going to we're going to change the way we do this. And the days of my beginnings about annual giving and mailings and newsletters. And yes, there are those of us that are old and still want them. But this isn't where the next generations are going to be.
You have to make changes. The last tactical piece that I'll recommend, sit down and go through this list or things that are listed and say, can we do any of them? Why not do all of them? Can we sit down and figure out how we're going to change what we do so we can reach that next generation, create, engage, build, find, connect to their philanthropy and allow them to be a part of our organizations for many, many years to come.
That builds the kind of relationships that leads to major gifts, estate gifts, transformational gifts down the road. That's a great investment can be done economically with technology, but you have to plan for it.
Really appreciate those that spend a few minutes, a couple times a week reading the blogs. I hear more and more commentary about philanthropy. Dot com backslash blogs. You get RSS feed, more and more people reading them, they are 90-second reads on nonprofit work, on leadership, on philanthropy, on just life. Not meant to be political. Certainly they're not. They're just ways of people to get people to think about what's going on in their world and the kind of the world that we all live in.
I hope you'll check those out, and if you'd like to contact me, as I've had recently, a couple of suggestions on podcasts which were great. That's Podcast at Hallettphilanthropy.com. We're living in a world that's changing, and I'm the one who doesn't like change, as does my kids. But we're going to have to change if we want to engage in the way that we have in the past.
But the people who we're trying to engage with are doing it in different ways. We have to change. They're not going to. Which brings me to my all-time favorite saying. Some people are individuals who engage, who are changing, people who want to make things happen. Then there are those who wondered what happened, and then the middle group, the ones in the middle are watching.
What happens if we're going to be people that make things happen, then we have to change what we do to meet the people who also want to make things happen, who communicate in a different way. That's how we're going to help the organizations, the people, the causes that are wondering what happened.
It's hard for me. I'm old school, gray hair gives me away, but I realize we're going to have to adjust what we do. Today's episode is about the willingness to change, to be somebody who makes things happen, to partner with those who are, people, who make things happen, to take care of the people and the things in our community that are wondering what happened and that's worthy of your attention.
Frankly, it's a great way to spend a career as well. And I hope you realize that just a little bit every day about the value you bring. Now look to your non profit, but to the community as a whole. I'll look forward to seeing you the next time. Right back here on the next edition of around with Randall.
Don't forget, make it a great day.