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Opinion: Younger donors changing up the funding game

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National philanthropic research will tell you that individual charitable giving is in decline, and that Americans under the age of 40 are less charitable than previous generations were at that age. Locally, nonprofit leaders like Brian Fogle weren’t so sure.

What if younger Americans define charitable giving differently than their parents? And what if new definitions, motivations and technologies lead them to give in ways that aren’t being captured in traditional philanthropic research?

The Community Foundation of the Ozarks came to our team in the spring of 2023 to get localized answers to these questions.

The resulting Shaping Tomorrow study investigated the definitions, motivations and preferences that drive charitable giving among southwest Missouri residents, with a focus on understanding the differences between respondents under the age of 40 and those 41 and older.

The findings make it clear: Younger donors are changing the game. And our region’s agencies will have to adapt to connect with this demographic.

A key question driving this research was, “Do younger audiences feel different than older generations when it comes to charitable giving, and if so, how?”

The findings indicate yes, audiences under 40 do have meaningfully different charitable giving perspectives and motivations.

Respondents under 40 largely reported being less religious and less conservative than their parents and grandparents, and this shift in ideology influences their charitable behavior.

These folks are more likely to give to organizations that address specific and local community needs; more likely to donate their time and expertise as an act of serving others; and less likely to give to religious entities.

These younger audiences are also less trusting of established nonprofit organizations and dedicate a larger share of their total giving directly to individuals or families.

If younger donors do trust a nonprofit agency, it’s likely because they know someone there. Almost 80% of respondents said having a personal connection to a staff member, board member, volunteer or beneficiary increases their trust with an organization, which in turn increases the likelihood of their giving to that agency.

Broadly, younger donors are savvy digital natives who care deeply about making their local community a better place. They value personal connections, transparency and knowing their charitable gift has a direct impact.

These preferences, combined with the emergence of digital platforms like Venmo and GoFundMe, mean younger donors won’t hesitate to bypass traditional nonprofit agencies in favor of making a fast online contribution directly to an individual or  family in need.

Asserting that younger Americans are less charitable overlooks a crucial point: Much of their philanthropy occurs outside traditional 501(c)(3) entities, and thus it escapes the scope of most philanthropic research.

The data and insights gathered during this research have been compiled in a 30-plus page report that will be released to our local nonprofit community in the coming weeks. The report is extensive and highlights the many things a nonprofit agency needs to consider if they want to connect with this emerging donor base. We know, at least regionally, that nonprofits need to evaluate how they leverage technology, how they communicate impact and how they build trust with new audiences.

The ability of our local nonprofit community to adapt to these changing donor preferences has implications that reach far beyond any one organization. Our entire community is enmeshed with our nonprofit sector. These organizations and their leaders need support as they adapt and innovate. Their long-term viability isn’t only their concern, but it’s also ours.

The comprehensive local research, titled Shaping Tomorrow: A Study of Young Donors’ Perspectives on Charitable Giving in Southwest Missouri, will debut in its entirety on Feb. 13 and will be available to download at TeamHabitat.com/shapingtomorrow.

Paige Oxendine is a consultant with Habitat Communication and Culture LLC. She can be reached at paige@teamhabitat.com.

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