Young donors bring new ideas to giving

A local effort is providing insight into a national phenomenon: the change in giving behaviors among charitable donors under the age of 40.

A study commissioned by the Community Foundation of the Ozarks Inc. and conducted by Habitat Communication and Culture LLC drills down on a 2023 finding published by Giving USA that said people under the age of 40 were giving at a lesser rate than same-aged donors had given in years past.

The report conducted by Habitat is titled “Shaping Tomorrow: A Study of Young Donors’ Perspectives on Charitable Giving in Southwest Missouri.” In his introduction, Brian Fogle, past president of CFO, said the observation required some scrutiny.

“Given the engagement and activism we have witnessed with that group, we probed a bit deeper and found the study did not include most crowdfunding platforms like GoFundMe because those didn’t meet the traditional definition allowed by the IRS,” Fogle wrote.

The goal of the CFO study, Fogle said, is to prepare for the next generation of donors by endeavoring to understand why they give, what causes and who they support and what motivates their giving. Insights were provided by 431 respondents to a digital survey, plus more than 75 area residents who participated in focus group conversations and eight nonprofit development professionals with experience in southwest Missouri.

Survey respondents mostly came from the under-40 demographic, with about 17% of respondents ages 41-50 and about 20% ages 51 and over.

Among the notable findings from all respondents were the following:

• Spur-of-the-moment decisions to give are made by 65% of donors, and only 35% of respondents say they follow a budget for giving.
• Nearly half of respondents said their definition of charitable giving was not the same as their parents’, and most reported being less religious and less politically conservative than their parents or grandparents.
• Nearly half say they prefer to make a one-time contribution instead of monthly or periodic giving.
• Donors ages 23-60 like to give online, while younger donors prefer event-based giving and older donors prefer to write a check.
• Some 72% of respondents say they generally or strongly trust online payment options.
• Of those who have given through GoFundMe and similar platforms, 58% are 40 or younger.

The study’s findings were presented Feb. 13 at the CFO office by Habitat co-founder Spencer Harris and consultant Paige Oxendine. Representatives of some two dozen area nonprofits were present in person to hear the report, while others joined in via Zoom.

Giving down, expenses up
Oxendine said most organizations are experiencing a double-whammy when it comes to budgeting, with a Giving USA study reporting that charitable donations were down by more than 13% in 2022 when adjusted for inflation, but with expenses on the rise.

“Almost 50% of nonprofits say that that sense of rising operational costs is their most significant challenge that they’re facing today,” Oxendine said.

Compounding the problem is a decline in trust of nonprofits. Citing Giving USA statistics, Oxendine said almost 70% of baby boomers indicate they trust nonprofits, compared with only 46% of members of Gen Z.

A further monkey wrench: Giving on certain key days through the year is experiencing a marked decline, Oxendine said, noting there was a double-digit decline in donor participation in 2023 compared with 2022.

Charity is changing
Many younger donors like the convenience and immediacy of giving through emerging platforms like GoFundMe, the study found. Through an instrument like the crowdfunding platform, they can read an appeal and respond immediately with a few clicks.

Oxendine said donors have given some $30 billion on GoFundMe since 2010 and $1.6 billion on DonorsChoose, a platform that allows direct donations to public school classroom projects, since 2000. On Meta – the parent company of Facebook and Instagram – $7 billion was donated in 2022 alone.

“What this tells us is that giving is still happening,” she said. “There’s still a lot of activity in this space, but it’s not necessarily being captured in the way in which we think about traditional philanthropic research.”

What is charitable giving?
Harris said part of the study was to define charitable giving itself – and definitions appear to be in flux.

When respondents were asked if certain activities qualify as charitable giving, some surprising results emerged, according to Harris. Respondents indicated whether they participated in the following activities:

• Financial contributions to a nonprofit organization, 82%.
• Contributing time or money to a disaster relief organization, 73%.
• Volunteering time, 73%.
• Attending an event for a charitable cause, 55%.
• Contributing through an employer-sponsored program, 52%.
• Contributing professional expertise to an organization, 50%.
• Financial contributions (such as tithing) to a religious entity, 48%.
• Contributing to a GoFundMe campaign, 48%.
• Buying from companies that make a donation with purchase, 28%.

Harris added that only 30% of respondents saw charitable giving as an act that necessarily includes an established nonprofit.

“Maybe another way of saying that is only 30% of our respondents describe charitable giving as an act that necessarily includes an establishment,” he said. “That’s important, because what it suggests is now I don’t have to go directly to an agency, an institution or an organization.”

The study revealed that many donors get a high level of satisfaction out of giving directly to a person or family who is experiencing a need, such as a medical bill.

“For the most part, the folks that we talked to do not think that a nonprofit agency is a requisite for a charitable act,” Harris said.

Takeaways
Releasing the results of the study was the first step in helping local organizations contend with the changing donor environment, according to Holly Beadle, CFO’s director of philanthropic services. CFO has planned three educational events for nonprofit leaders: a Feb. 21 information session on the capacity-building platform Jumpstart, a Feb. 27 session by Network for Strong Communities on messaging and storytelling for the donor base, and a March 5 session on donor database essentials.

Additionally, through a $50,000 gift from David and Stacey O’Reilly, agencies can apply for grants of up to $5,000 to implement programs or strategies to attract younger donors and develop online giving platforms.

Colby Wallace, community development coordinator for Good Samaritan Boys Ranch, said he found the report informative and noted nonprofits have always lagged behind private industry in some of its solutions.

“If private companies have figured out that humans trust each other more than they trust corporations, nonprofits should also learn that,” he said. “If each nonprofit could find the people in their communities that already support them and find ways to empower their voice and their social network, that might provide that more authentic donor experience that the whole presentation was telling us people want.”

Melisabeth Johnston, communications and program director for PFLAG Springfield/SWMO, said the study resonated with her.

“I’ve always believed that relationships are the basis of the change that we can create as nonprofits, but it’s validating to see that played out in the qualitative data from the focus groups that Habitat put together,” she said. “The absolute best thing we can do is bridge the gap and make sure that all of our organizations are sustainable into the future with this new generation of donors.”

CFO officials declined to disclose the cost of the study, which was funded in part by the Patterson Family Foundation.